Most folks know that labor costs in Europe are high, both because of high minimum wages, high required benefits, and various government regulations that raise the cost of labor (e.g. making it impossible to fire anyone).
My observation so far is that private businesses understand this perfectly. Given higher labor costs than in the US, most service businesses have fewer employees. In restaurants in the US a waiter might cover 4-6 tables -- in most European restaurants I have been in the waiter covers the whole restaurant. In fact, two of the places we have eaten are 12 table restaurants run entirely by a couple, with one being the totality of the waitstaff and the other being the totality of the kitchen staff. In this case, the married owners of a small business might be hiring nobody.
But for reasons I don't know but I can guess, public agencies -- which presumably have higher labor costs than in the US -- are simply profligate with labor. The example I will cite is trash pickup, both in Amsterdam and Bruges. In these two lovely cities, every business and residence throws their trash on the curb in bags and boxes and even loose in piles. Here is a portion of the 9 streets district in Amsterdam, an important upscale shopping area that lives and dies by attracting tourists. Look how ugly the streets are:
In Phoenix we all put our trash into standard cans which are a heck of a lot more attractive than basically just throwing garbage on the street. These cans are then emptied by a truck with just one employee, a driver that has an arm that reaches out and grabs each can and dumps it in the truck.
In Amterdam, trash is picked up far slower and requires three people, a driver and two guys running around like crazy picking up trash and throwing it in the back. The compactor on this truck was terrible and slow and so the truck compactor could not keep up with the workers, who had to bend down and pick up the same trash two or three times to get it to stay in the truck.
It looked like a total custerf*ck