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The Progressive Economics Forum

The case for working less

A guest post from Tom Walker:

The economic case for shorter working time was made 100 years ago this August in Winnipeg by Sydney J. Chapman. It was the standard model accepted by the elite academic establishment – Alfred Marshall, A.C. Pigou, Lionel Robbins and J.R. Hicks cited it as authoritative. This was not some obscure “debate among scholars from eons ago whom no one knows.” No debate was needed. It was an open and shut case. One hundred years later, the theory stands undisputed… and ignored.

The case can be summarized as follows…

Technological advance makes the labour process more intensive and, as a consequence, more stressful and fatiguing. Meanwhile, the increased productivity of industry makes leisure time more valuable. A reduction in the hours of work is required if the gain in the value of leisure time is to be realized but also to establish a new baseline for further technological progress that could benefit society and the mass of working people. The competitive market for labour does not automatically lead to the establishment of optimal working time arrangements; rather it contains a systematic bias toward overly long hours.

This established theory was expunged from economic discourse by a technical gimmick with dubious empirical or theoretical merit but considerable mathematical convenience. By sheer coincidence, this methodological quirk also happens to please and appease “the free-market orthodoxy which dominates both economics instruction and economic policy-making in Canada.” But I digress…

There is a story about a drunk stumbling around under a lamp post looking for his keys. A passer-by offers to help and asks, “where did you drop them?”

“Over there in the bushes.” the drunk replies.

“Then why are you looking for them here?”

“Because the light is better here.”

The case for shorter working time was expunged from post-war economic thought because “the math was better” under the light of an assumption that the given hours of work are optimal, rather than that the ideal was a dynamic and progressively declining number of hours.

The radical implications of Chapman’s theory can be hinted at by juxtaposing Chapman’s observation about the ideal working day of the future with Karl Marx’s approving citation in his Economic Manuscript of 1861-63 of the argument from an obscure 1821 pamphlet.

Chapman wrote:

It is my purpose to demonstrate that the non-physiological value of leisure, as well as its physiological value, must rise with progress, and, therefore, that in all probability, the hours which should be worked per day will become steadily less. The ideal working day of the future cannot be eight hours, for it must be essentially a progressive ideal. As a community advances agitation for shorter hours will be constantly breaking out anew [emphasis added].

Marx quoted and then rhapsodized upon the following passage from the 1821 pamphlet, “A nation is really rich if the working day is 6 hours rather than twelve. Wealth is disposable time, and nothing more.” The obscure pamphlet turns out to have been, in Friedrich Engels’ words, “the most advanced outpost of a whole group of writings of the 1820s, which turned the Ricardian theory of value and surplus-value against capitalist production in the interest of the proletariat, and fought the bourgeoisie with its own weapons.” It was also the inspiration for Marx’s own, more famous, analysis of surplus value. What united Chapman, Marx and the anonymous pamphleteer, besides reverence for disposable time, was the notion that collective struggle, rather than individual choice, was the medium through which shorter hours and a better life would be achieved. As a resolution of the First International proclaimed, “the limitation of the working-day is a preliminary condition without which all further attempts at improvement and emancipation must prove abortive…”

Before calling in the red squad, though, Canadian humorist and political economist – and Conservative Party campaigner – Stephen Leacock also promoted shorter hours of work as the key component of his proposed solution to the Unsolved Riddle of Social Justice while John Maynard Keynes hailed working less as the “ultimate solution” to the long-term problem of full employment. The movement for an eight-hour day was the cornerstone of Samuel Gompers’s “pure and simple unionism,” which is to say the American Federation of Labor. Ira Steward pioneered the philosophy of eight-hours, which in major respects anticipated and prepared the ground for the Roosevelt New Deal of the 1930s. Even Henry Ford touted the advantages of an eight-hour day and a five-day week back when it was heresy to the more respectable spokesmen for business. Strange bedfellows.

It is crucial to understand that “the economic case for shorter hours” has been made many, many times before. It is, perhaps, even more important to realize that the case, or cases, and the making of them, dwell at the core of some of the most profound upheavals in the history of economic thought and in the social history of the last 200 years. It would be presumptuous of me to “make the case” without somehow acknowledging that history. Furthermore, my own field of scholarship bears a peculiarly tangential relationship to that case. What I have studied primarily over the past 14 years has been the economic case against shorter hours, or perhaps I should say more accurately: the economists’ case against the economic case for shorter hours. Opposition research.

My guiding question has not been “what would the benefits be?” I have a shelf full of plausible answers from Arthur Donner, Andrew Jackson, Frank Reid, the Atkinson Foundation, Julie White of the CEP, Francois Aubry of the CSN in Quebec, Bruce O’Hara, Anders Hayden, Conrad Schmidt and Peter Victor – just to mention a few of my Canadian contemporaries and comrades.

Instead, my question has been “what’s the big hold up?” It has been a remarkably fruitful research question. I have two published articles on the alleged economic fallacy of the case for shorter working time and a conference paper documenting the scandalous suppression by mainstream economic discourse of the neoclassical theory of the hours of labour. Economists lied; people died. In the course of my research, I’ve also examined dozens of the cases argued for shorter working time and have been careful to note their similarities and differences. Those cases range, chronologically, from a brief commentary in Thomas Jefferson’s friend, the Marquis de Chastellux’s 1772 Essay on Public Happiness (as in “life, liberty and the pursuit of…”) to a short section in the United Nations Environmental Programme’s 2008 report on Green Jobs: Towards Decent Work in a Sustainable, Low Carbon World.

My synthesis of the economic case for shorter work time from the multitude of economic cases for shorter working time arrives at a qualitatively different perspective than the standard economic view. Rather than the dwelling on the material benefits of more free time, higher wages, lower unemployment, improved productivity, better health or reduced greenhouse gas emissions, my synthesis emphasizes the differences between the economic subject implied by or constituted in the body of shorter work time texts and the infamous utility-maximizing homo economicus constituted in the text of mainstream economics. The economic subject of the shorter working time literature is human, whether acting as a collective or as a social individual.

Homo economicus chooses from a cafeteria of ready-made commodities, one of which is labeled “leisure”. Real individuals and collectives struggle for a better standard of living, including free time to become fully developed as human beings. Historical consciousness is a key part of that ongoing struggle. “Wealth is disposable time… and nothing more.”

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Comments

Comment from Marc Lee
Time: March 8, 2009, 3:46 am

Tom requested that I go with this cleaner version of his work. Alas, in doing so I have lost comments made on the previous post. My apologies.

My two cents on this is that we need to be clearer about the economic case for working less, and more importantly we need to outline a policy program to that end. Discuss.

Comment from Stephen Gordon
Time: March 8, 2009, 8:58 am

The competitive market for labour does not automatically lead to the establishment of optimal working time arrangements; rather it contains a systematic bias toward overly long hours.

What is ‘overly long’? And just what is the coordination problem that generates this bias?

There are significant cross-country variations in hours worked, and there’s a lot of work being done trying to explain why (a quick search of the OECD site kicked up this survey (pdf).

Clearly, there are cases where there are potential welfare gains in policies that make switching away from labour and towards leisure less costly. (For example, in my blog-sized analysis of the welfare gains associated with a GAI, much of the welfare gains occur because low-skilled workers are not obliged to work at low-pay jobs. Total (and average) income goes down, but welfare increases.

But it’s also not hard to imagine cases where imposing an upper limit on hours worked could be welfare-decreasing. For example, in a life-cycle model, you might expect that people will want to work more when they are young and less as they approach retirement.

Comment from Todd
Time: March 8, 2009, 12:30 pm

Stephen Gordon said:

“And just what is the coordination problem”

What do you mean by “coordination problem”? I’m not sure I understand the term in this context.

Comment from Stephen Gordon
Time: March 8, 2009, 12:46 pm

Market failure, then.

Comment from Tom Walker
Time: March 8, 2009, 2:14 pm

Stephen Gordon asked, “just what is the coordination problem that generates this bias?”

Chapman presented a diagrammatic summary of his argument in a footnote to his “Hours of Labour” article published in the September 1909 Economic Journal. I transcribed that footnote and broken down his single diagram into four at the following URL:

http://www.worklessparty.org/timework/chapman.htm

The Government of the State of Queensland summarized Chapman’s analysis (based on my account of Chapman’s theory) in their submission to the Australian Industrial Relations Commission on the “Reasonable Hours Test Case.” I included a scan of the pages from the Queensland submission as an appendix to my submission to the White House Task Force on Middle Class Working Families, available at the following URL:

http://www.scribd.com/doc/12657821/WHTFMCWF

Finally, here is the argument as reproduced in the Wikipedia entry on Sydney Chapman:

The main points of this argument can be summarised as follows:

* a mass of evidence indicating that reductions in hours of work had not led to proportionate declines in output;
* modern industry fatigue was less physical in nature and more a combination of psychological and physiological as a result of specialisation and increased need for mental concentration;
* the reduction of hours allowed better-rested workers to produce as much or more in the shorter hours;
* the total value of the output would initially rise as the working day increased but eventually the total output as well as the output per hour would decline as the working day became so long that it prevented adequate recovery from fatigue for workers;
* this is the case because, beyond a certain point, each additional hour of work would be contributing to the output of the current day’s total output but at the expense of the following day’s output capacity; and
* the intensity of the work involved would dictate the point at which total output begins to fall and thus the length of the ‘optimal’ working day.

The second half of this argument explores whether the free market can arrive at the ‘optimal’ length of day, and can be summarised as follows:

* the maintenance of a long-term optimum by employers would require short-term restraint;
* each individual employer could never be certain of reaping the benefit of their restraint as another firm could potentially entice the employer’s well-rested workers away with a wage premium;
* therefore the optimal output work time is a form of investment without equity;
* simultaneously, Chapman (1909) assumed that workers would choose a longer working day than was prudent (although not as long as the working day preferred by employers), primarily because of a general short-sightedness that would mean workers would consider their immediate earning capacity more than their longterm earning capacity1; and
* the outcome in a free market situation would therefore be one where employers and employees acting in self-interest would each tend to select a working day that was longer than the ‘optimal’ hours.

Chapman (1909) considered three elements in gauging the optimal day for the worker;

1. the wage,
2. the marginal value of leisure and
3. the disutility of work.

Comment from Tom Walker
Time: March 8, 2009, 3:08 pm

Marc Lee asked: “The big issue is how we get there, or what this means in terms of policy. I was hoping Tom would address this… So Tom, what’s the action plan? Is there any public opinion research that points to where people themselves would like to go in terms of hours of work?”

This is indeed a big, big issue. As Gerhard Bosch has pointed out, the design and implementation of work time reduction policies are critically to their effectiveness. Marc Linder has written comprehensively on the problems inherent in the traditional overtime penalty/premium approach. I’ll defer discussion of that angle to his thorough volumes.

In my view, there isn’t one “silver bullet” policy that slays this vampire. I have argued vigorously, in the past, for a review and modification of existing policies that create perverse incentives for longer hours of work. The February 1998 issue of the CCPA Monitor includes an article by me on “closing the overtime loophole.” Lars Osberg in his contributions to the Federal government’s 1998 “Collective Reflections on the Changing Workplace” consultation responded to these concerns:

The design of payroll tax-based programs such as Employment Insurance and the Canada Pension Plan now encourages firms, when they need more labour, to increase overtime hours rather than hire new employees. Employer premiums for EI are payable only until workers reach maximum insurable earnings, and employer premiums for CPP are payable only until maximum yearly pensionable earnings are reached. Above those thresholds, each additional hour of work costs the employer nothing in payroll taxation. Payroll taxes, like employer-paid fringe benefits (e.g., supplementary health insurance) are then a lump-sum cost per employee, which can be spread over more hours of employment, hence the benefit to the employer of a longer work-week for covered employees. Government also implicitly encourages businesses to pay part of employee compensation in the form of such fringe benefits by exempting their value from income taxation.

On both equity and efficiency grounds, it would be desirable to level the playing field. We do not allow, much less encourage, employers to pay different compensation packages to individuals of different ages, and we should not create government policy incentives that encourage different packages for full-time and part-time workers.

In response to this issue, recommendation #3 of the consultation stated:

Public policy should not create artificial incentives for a longer work week or for creating part-time jobs at the expense of full-time ones.

Currently, public policy sometimes creates artificial incentives for employers to hire part-time instead of full-time workers, and to increase significantly the weekly number of hours worked by existing employees.

In the decade since that recommendation was made, I don’t reckon a lot has been done to remove those artificial incentives from existing policy and certainly nothing comprehensive.

It would be naive to rely entirely on government action to address working time and there are approaches that unions could take. For example, instead of simply having wages go up by annual or semi-annual increments in a pay grid, wage increments could be matched by work-time reductions. That proposal was outlined in a 1998 “World’s Greatest Ideas” submission that received honourable mention and can be viewed here:

http://www.globalideasbank.org/site/bank/idea.php?ideaId=691

But let’s face it, the big issue today is the collapse of the economy, followed by the prospect of human activity induced climate change. Or maybe it’s the other way around.

As long as we’re talking “stimulus packages,” why shouldn’t we be talking about measures that reduce working time as the same time that they protect incomes, especially of the most vulnerable? My own proposal, offered half tongue in cheek simply because of its magnitude, was to establish a kind of guaranteed annual leisure income. In essence the government would pay everyone, at the median wage, to take a day off every week. People could work longer hours if they chose, but the supplemental payment would be clawed back in proportion to the number of hours they worked above an annual ceiling. That proposal was posted here:

http://econospeak.blogspot.com/2008/12/sandwichmans-keynesian-stimulus-plan.html

Soon after that Dean Baker suggested in the Guardian a somewhat more modest but similar proposal. Dean’s idea is to give employers a tax credit if they reduce the work week or grant vacations with no loss in pay:

http://www.guardian.co.uk/commentisfree/cifamerica/2009/jan/26/business-us-economy-worker-benefits

That’s enough for now. I’ll go into the 1994 Donner task force recommendations in a later comment. I want to finish off with a final observation that Dean’s proposal and others like it are routinely pooh-poohed on the basis of objections that, for example, assume that fixed per-employee costs are a natural fact of the world rather than being policy-induced perverse incentives (see the Lars Osberg quote above). Or they assume that output and thus wages vary proportionately with hours worked, contrary to the Chapman theory discussed in the post and my previous comment.

Comment from Nick Rowe
Time: March 8, 2009, 4:33 pm

I can think of models where there’s a market failure that causes people to work longer than optimal hours; and also models where there’s a market failure causing people to work shorter than optimal hours.

But I can’t see an argument in Chapman for the former. He seems to make a basic mistake here: “Meanwhile, the increased productivity of industry makes leisure time more valuable.” But if something is more valuable, in the sense of having a higher opportunity cost (and increased [marginal] productivity of labour would increase the opportunity cost of leisure), that means, by itself, that we should consume less of it.

Of course, the increased total product of labour makes us richer, so we ought to consume more of everything, including leisure (assuming leisure is a normal good, which it seems to be).

Income effect (total product) vs. substitution effect (marginal product) go in opposite directions.

Take the extreme example, where labour was totally unproductive, and everything we wanted to consume just grew on trees and fell into our laps, regardless of whether we worked or not. That would be an example where we should not work at all, and should spend all our time in leisure. (Unless of course we enjoyed work, for it’s own sake).

Comment from Tom Walker
Time: March 8, 2009, 4:48 pm

Nick,

I have comment containing links “awaiting moderation” that fleshes out the Chapman argument. In the meanwhile, I just want to ask: do you really mean to say that if I earn enough income to buy a sailboat that having that sailboat has no effect on the value of my leisure time?

Comment from Stephen Gordon
Time: March 8, 2009, 5:02 pm

The income and substitution effects are not necessarily independent of the levels of income: cf the backward-bending labour supply curve.

Comment from Peggy Dobbins
Time: March 8, 2009, 5:43 pm

I read “Meanwhile, the increased productivity of industry makes leisure time more valuable” and thought, “Humpf, the increased productivity since that was written makes valuing leisure time essential if we are to sustain anything resembling civility, local and/or global. What could be more ironic than our great and splendid species taking refuge in caves with fanatics welding machine guns into kidney dialysis machines watching Blade Runner when the way out of the cave to full employment and a world wide minimum standard of living at the median level of that enjoyed by a U.S. family of 4 in 1950 requires no more than embracing leisure. I actually do understand this. And I actually believe Americans will rally and march and whatever we can do nowadays that our ancestors who won the 10 hour day and the 8 hour day couldn’t dream of FOR a slogan and a simply worded bill/referendum/ordinance/law/mandate/trade
stipulation to “make it so.” Right now for me I’m happy to claim my “right to work,” understood as a guaranteed 20 hours at poverty wage as long as health, education, and retirement at 65 is covered. Unemployment checks can be translated into guaranteed maximum hours at a livable wage for every job applicant, including the long term unemployed.
Creativity can shift from creating “packages” in the financial “industry” that disappeared in the smoke and mirrors, to creating 20 a week jobs.

Comment from Tom Walker
Time: March 8, 2009, 6:05 pm

Stephen,

Please see “Revising the labor supply curve” by Robert E. Prasch:

What percentage of the population can live off the bounty of the land, or depend upon savings or inheritance? While this is the implication behind the standard presentation of the labor supply curve, it is not a plausible representation of the dilemma faced by the overwhelming majority of people in the workforce.”

Implications for Economic Theory:

…the conventional depiction of the labor market is fragile, in the sense that a small and highly plausible modification of one of its premises dramatically changes our understanding of labor market dynamics.

Comment from Nick Rowe
Time: March 8, 2009, 6:16 pm

Tom: I will await the link.

The income that enables you to buy the sailboat increases the value of your leisure time. But the higher income per hour (wage) increases the cost of one hour’s leisure time.

The (opportunity) cost of something is what you have to give up to get it. If my wage is $20 per hour, if I buy one extra hour’s leisure (if I work one less hour) I lose $20. My leisure costs me $20 per hour.

Put it this way: who would spend more time sailing? A person who won $100,000 per year in a lottery (and bought a sailboat), or a person who could earn a high wage per hour (enough to buy a sailboat)?

The sailboat is a neat example of a consumer good which is highly complementary in leisure. But other consumer goods (labour-saving home appliances) are substitutes for “leisure” (i.e. not working for a wage).

Comment from Jehu
Time: March 8, 2009, 7:38 pm

Tom,

Thank you for a serious treatment of a subject that has more than passing intellectual interest among we non-economists who will have to grapple with rapidly expanding unemployment in the coming months, just as it appears mainstream economic policy has reached its outer limits of effectiveness.

Would that we too could debate this issue with dispassionate interest. However, it is clear that the effectiveness of the monetary and fiscal tools which have been wielded by policy makers in the United States have, so far, lagged well behind the rising tide of unemployment.

It seems that monetary policy has decisively failed to halt the slide, and fiscal policy – already weakened by decades of deficits – now hinges on the continued willingness of US’s creditors to extend still more credit on an even greater scale, even as their own domestic economic difficulties call for their own stimulus packages at home.

In relation to these policy concerns, shorter working time has two keys features which might be of interest to policy makers:

1. It does not cost a dime’s worth of Treasury and/or taxpayers funds.

2. It does not add a single dime to the accumulated debt of the US Treasury.

Thanks again, Tom, for making the case.

–Jehu

Comment from Darwin O’Connor
Time: March 8, 2009, 7:53 pm

Here are the comments from the original post recovered from the archive of the rss feed in Google Reader. I didn’t want to miss an opportunity to make someone appalled.

[Note: Thanks for this, Darwin. I have tried to clean up this long dump of comments as the order was off and there was some repetition from the reposted comments. M]

by Paul Tulloch

I hate to be a nay sayer, but the green revolution is going to require more working time and not less.

Leisure time for me is not defined as spending time on tasks to ensure ones habitual daily routine is green friendly. And that is the center of my argument. Therefore it is contrary to just about every historical thinker you mention, because not many of them had such a constraint on their thoughts. (and I don;t say this with disrespect, as I have read a good many of these authors)

While I agree with the concept of reduced working time, as yes being human is highly negatively correlated with work hours. I still think it is a far off goal.

The only current space I see for it is to help ration the existing reduction in demand for labour However, as a cyclical rationing tool, I do not think many of these authors would agree that is what they were talking about, with its essential features.

I think a much more productive debate would be to focus on generating more work. The progressives need to open up some new space in innovation and more progressive goals of work then somehow getting on this “end of work” fascination.

We need to be talking about generating employment and more work, not the magic that somehow might make work go away.

With all due respect, I am fundamentally in disagreement to considering this as a legitimate progressive economic objective. As I stated, it is a a rationing tool at best to sooth the masses of unemployed, and you might even see it prop up in the labour movement, but again only as a temporary measure. I think the BCGEU was pushing it recently to save jobs in the public sector.

A far better approach would be to focus on how can we turn the green movement into generating more economically sustainable employment, in both a waged and non-waged fashion (preferably the former) to get the work that needs to be done, done.

paul

by Darwin O’Connor

“I hate to be a nay sayer, but the green revolution is going to require more working time and not less.”

What kind of work is going to be required to be more green? Certainly there will be many capital projects large (green electricity generating stations) and small (caulking windows) but many of these will reduce work in the long term because they save money in the long term.

by Tom Walker

For my part, I, too, see challenges. That’s why I try to identify and catalog them. One of those challenges is the hostility of mainstream economics to the rationale for working less. That hostility has found expression in the repeated claim that advocates of shorter working time commit a “lump-of-labor fallacy.” My response to that challenge was to research the supposed fallacy. Here’s what I found (the abstract of my Review of Social Economy article, “Why economists dislike a lump of labor”:

The lump-of-labor fallacy has been called one of the “best known fallacies in economics.” It is widely cited in disparagement of policies for reducing the standard hours of work, yet the authenticity of the fallacy claim is questionable, and explanations of it are inconsistent and contradictory. This article discusses recent occurrences of the fallacy claim and investigates anomalies in the claim and its history. S.J. Chapman’s coherent and formerly highly regarded theory of the hours of labor is reviewed, and it is shown how that theory could lend credence to the job-creating potentiality of shorter working time policies. It concludes that substituting a dubious fallacy claim for an authentic economic theory may have obstructed fruitful dialogue about working time and the appropriate policies for regulating it.

by Stephen Gordon

The case for shorter working time does not fit snugly into the prefabricated containers of mainstream economics…

Are you sure? It seems to me as though it fits snugly into the standard story of the tradeoff between labour and leisure and the backward-bending labour supply curve.

To continue on this point, here is a quick-and-dirty analysis of the benefits of a Guaranteed Annual Income that uses standard undergraduate mainstream economics. Much of gain in welfare comes from the fact that people work less.

by Tom Walker

Stephen,

Am I sure? Yes, I am convinced. If you mean am I certain, then I can only say that the notion of certainty is inappropriate to the analysis of this issue. In my article, “Missing: The Strange Disappearance of S. J. Chapman’s Theory of the Hours of Labour,” I discuss the empirical, theoretical and historical discrepancies of the standard model. Click on my name for the website link.

As to what seems to you a snug fit, would you care to elaborate? Are you saying that the standard model is unimpeachable on this issue? If you are saying that, have you read the literature criticizing that model empirically, theoretically and in terms of its historical pedigree? Again, see my article. What do you say about those criticisms?

But, hey, if you’re saying you’ve got a case for shorter work time that fits snugly into the standard model. Bring it on, brother, bring it on. (And I don’t mean “as productivity improves and peoples’ incomes increase, they can choose to take more of their consumption in the form of leisure.” woo! hoo!)

by Tom Walker

Quick, What’s Wrong With a Tax Cut that Shortens Work Hours?

By Dean Baker

February 16, 2009, TPMCafé (Talking Points Memo)

Everyone knows that a policy that makes sense has no chance in Washington, but let’s try. As we sit here with an economy that is throwing 20,000 people out of work every day, there may be some interest in trying policies that the geniuses running things had not previously considered.

Just to get our bearings, we are in a recession caused by lack of demand. People are not unemployed because we lack food, oil, computers, skilled labor, or anything else. People are out of work because we are not spending enough money.

This should make the public furious because it is not hard to spend money. The suffering that the public is experiencing right now is entirely because of a combination of ideology and ineptitude. If we increase demand (yes, we can print money), then there will be jobs, and the unemployment rate will tumble.

The tax credit for shorter work hours is so simple that even an economist can understand it.

The deal is that if an employer reduces work hours by providing paid time off in some form (e.g. paid parental leave, paid sick days, paid vacation, or shorter standard workweeks), then they will get a tax credit from the government to compensate for the reduced time, up to 10 percent of annual pay, not to exceed $2,500 per worker.

The logic is that companies will still be seeing just as much demand as before the tax break goes into effect. Workers’ pay will not have changed; therefore they will be able to buy just as much as they did before the tax break took effect. If demand is the same, but the average worker is putting in fewer hours, then firms will want to hire more workers.

For example, if employers of 50 million workers cut hours by 10 percent, and then seek to replace the lost hours with additional workers, they would need to hire 5 million workers. If they got a $2,500 credit per worker, this would cost the government $125 billion a year.

There seems to be many benefits to going this route, and no obvious disadvantages. First, it can be put into place immediately. The day Congress passes the legislation, employers can begin adjusting work schedules to benefit from the tax cut. In other words, this proposal is as shovel ready as it gets.

Second, there is no risk of wasted spending, firms will offer paid time off in contexts where it makes sense for them and their employees. Companies will make adjustments that make sense given the structure of their workplace. In some cases, the best route could be shorter workweeks, in other cases, paid parental leave or sick days may offer the best route. The companies will decide for themselves which method, if any, works best.

Third, there is little risk of fraud. Companies would be getting the tax break for cutting back work time through some specific mechanism. The condition of getting the credit is that they post the work time reduction on the Internet. Workers will know whether or not they are getting paid family leave or whether or not they get overtime pay for working more than 36 hours a week. This should provide a very good check on efforts by employers to fraudulently claim the tax credit.

It is very difficult to see a downside risk in this story. The plan would be that the government would provide these credits for two years with the expectation that the economy is on a path to recovery by 2011. At that point, if workers and employers like the new work schedules then they may opt to keep them in place even without the tax credit, but that would be their choice. They would always the have option to return to the prior system.

If there is an obvious flaw in the working of this sort of tax credit, it would be interesting to see someone identify it. The fact is that millions of people are now unemployed because of the incredible blunders of the folks determining the country’s economic policy. This tragedy will be intensified if these workers remain unemployed simply because the current crew of economic policymakers can’t think beyond their standard game plan.

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy. He also has a blog on the American Prospect, “Beat the Press,” where he discusses the media’s coverage of economic issues.

by travis fast

Baker:

“we are in a recession caused by lack of demand.”

What the $%?*? We most certainly are not in an recession caused by lack of effective demand.

by Todd

Paul said:

“The only current space I see for it is to help ration the existing reduction in demand for labour However, as a cyclical rationing tool, I do not think many of these authors would agree that is what they were talking about, with its essential features.”

Of course they wouldn’t: many of them were radicals.

What you’re proposing is to use this concept in a very pwogwessive capacity, like welfare or EI: keep the masses fed with just enough work to keep them content and clean-looking (instead of having those nasty beggars all over the place),then, as soon as business starts booming again, take the teat away. You’re talking about smoothing out business-cycles, not freeing people from exploitation.

(And I’d be really interested in what the business community would have to say about even the weak tea you propose: they’d go bananas because that reserve army of labour would shrink and start to lose the sting workers have learned to fear from it again in the past forty-some-odd year.)

If I don’t miss my guess, The Sandwichman’s talking about something much more revolutionary and meaningful, like reducing the amount of surplus value we furiously hand over to our employers and keeping it for ourselves.

Then, if we really do need to have more work for something like the “Green Project”, we can have the option of taking that free time and using it productively in that manner.

by travis fast

It is curious,

My mother’s father managed a shoe store and his wife did not work outside of the house. On that single salary they managed to own a house, new car every 10 years, a two week vacation every year, and her mother even managed a trip to the salon once a month.

This most certainly does not describe what a shoe store manager could afford today. And I am sure we could find other more blue collar equivalent comparative cases.

So where did all those productivity increases go? Why does it take two middling class incomes to afford what one middling class income once provided? Why given all the productivity increases since WWII are households providing more paid labour and not less to consume pretty much the same bundle?

by Paul Tulloch

Actually Todd, I am not promoting the notion of using reduced worktime as a rationing mechanism in the near term. However I think the BCGEU was last week as a possible means to reduce the coming public sector layoffs in BC.

Darwin, I am quite appalled at your (mis)interpretation of what greening the economy will mean. There is a fundamental wave of transformation coming and it will be systemically ingrained into the fabric of he economic landscape.

I am sorry that you don;t see this coming, as it is quite a huge oversight on your part. What do you think the whole green job movement that is starting to take hold is all about? That is a lot of windows to caulk!

It is quite irresponsible for a progressive to define the green economy in such a manner.

by travis fast

“People ultimately need to work, and are happier if they are employed.”

I will agree with the first but not the second. That is I take tremendous joy from some aspects of my paid work and some tremendous joy from some of my unpaid work. I, however, take no particular joy from being “employed.”

Technically we should be able to enjoy a stable standard of living along side decreased hours. Why then are paid hours supplied by households going up and not down? Why did unions change from bargaining over work time reduction for productivity increases to bargaining for increased benefits? And why is there not an option in most standard labour contracts to either take more leisure or more compensation?

And specifically to Mark,

Why do you think people would use their *leisure* to become more active in democratic deliberation?

by Marc Lee

I’d like to see people who are working too much work less, so that they can spend more time enjoying leisure and ideally more time engaged in democratic processes (that still need to be created). But there is a distribution of work that needs to be addressed: some people arguably work too much, other people cannot get enough work. Flexibility of work arrangements is perhaps more important for families with children, in particular as it relates to work options for mothers.

The big issue is how we get there, or what this means in terms of policy. I was hoping Tom would address this. I have more questions than answers: Should we regulate a lesser hours of work or bring in tax incentives to work less? What does this mean in agriculture where seasonal work demands periods of long hours of work? Or should this just happen through collective bargaining (where there are unions)? Could this be a consequence of a basic income, as SG suggests? Will higher incomes lead to people choosing to work less (if they can)?

Seems to me that the danger is coersion, that we restrict people’s choices in trying to impose shorter work weeks because “we know better”. What if people want to work a lot in the 20s and 30s then retire early? What if people want to work 60 hour weeks but have two months of holidays per year?

People ultimately need to work, and are happier if they are employed. Families also have budget constraints and are probably not be willing to take a proportionate reduction in pay in exchange for fewer hours (though some might).

So Tom, what’s the action plan? Is there any public opinion research that points to where people themselves would like to go in terms of hours of work?

by Marc Lee

Armine Yalnizyan points to the Advisory Group on Working Time and the Distribution of Work, from 1994, of which she and Andrew Jackson were both part of it. Back then, “jobless growth” meant a lot of people were concerned about the issue (remember Rifken’s The End of Work). Alas, the report is not available in pdf format online, so the policy advice I am looking for will require a visit to the library.

Tom, I’m sure you have read this report. Could you summarize its recommendations for us? This seems a more useful basis for moving the discussion forward than killing a strawman neoclassical model or referring to debates that happened before we developed employment standards.

by travis fast

Marc,

There is a differences between being engaged in a collective project (work) and being an “employee.” I do not think we disagree here I am just trying to get you to probe a little deeper into what being “employed” means, i.e., the significance of what it signifies to the signified.

I think you tacitly understand this given your belief that people working less as employees would work more as democratic citizens. It suggests that participation in society–whether in the form of paid employment, democratic deliberation or other civic activities–is inherently important to an individuals sense of satisfaction and definition of the good life. Why in capitalist societies does “being” an “employee” become the most prevalent and socially recognized form of collective participation?

And you still have not attempted to answer the vexatious question about living standards, productivity growth and work hours.

Comment from jsalvati
Time: March 9, 2009, 1:08 am

I echo Stephen Gordon’s request. You have stated many times that there are reasons why labor markets generally produce overly long working hours. This seems plausible to me, but I haven’t seen a solid paper/book/article that makes this argument. At one point you recommended “Working Harder Isn’t Working” by Bruce O’Hara, but I’ve read sections of this book and as far as I can tell he does not discuss this. Can you make any other suggestions? If not, then I suggest you would do a lot to help your cause by writing up a solid argument for this point.

Comment from jsalvati
Time: March 9, 2009, 1:32 am

I see you have already responded to Gordon. I’ll check that stuff out.

Comment from Paul Tulloch
Time: March 9, 2009, 5:53 am

Darwin, we have agreed on many things, but I guess not everything. So I apologize for being upfront on my thoughts of the green. I hope you are wrong is how I should have phrased your thoughst about work and the greening of the economy.

I could be wrong but I like to think not, as it promotes optimism that we will all get much busier with all the time we seemingly will have on the horizon.

So again my argument is this-

If we have somehow created a lot of slack in the production process, maybe we can point the productive forces at the green revolution instead of taking it in a leisure, which to me is the only responsible thing to do.

Yes it is dictatorial, but so to is the environment- it will be our next great feat of modernity. Read some Ulrich Beck on this one, as his “Risk Society” is the one that sticks out in my mind.

Sorry Darwin and thanks for posting all the above.

Comment from Darwin O’Connor
Time: March 9, 2009, 7:39 am

“Darwin, we have agreed on many things, but I guess not everything. So I apologize for being upfront on my thoughts of the green. I hope you are wrong is how I should have phrased your thoughst about work and the greening of the economy.”

I’m not sure why anyone would hope I was wrong. What I was saying that greening the economy would result in the a net reduction of work in the long run. This would result from technological improvements that save on energy and work, switching to modes of transportation that require less energy and work (transit for people, rail for products), reduction of demand for physical products replaced with increase consumption of non-physical products, like entertainment which may or may not be less work, but is certainly more enjoyable work.

“If we have somehow created a lot of slack in the production process, maybe we can point the productive forces at the green revolution instead of taking it in a leisure, which to me is the only responsible thing to do.”

I hope there is enough slack for both. Besides leisure is, in general, less polluting then work, so promoting leisure lets you be green for free.

Comment from Paul Tulloch
Time: March 9, 2009, 8:14 am

Your optimistism really gives me a chuckle. We finally have chewed off a small bit of leisure time, begotten form a bit of tech diffused into the industrial infrastructure and have succumbed the population to a technical rationality based upon the mass produced satisfied needs, all at the expense of a disposable planet.

You make a huge leap in logic that the tech will magically transform so that modernity can now satisfy the masses in the same fashion (keep them fasley happy) by some mere tweaks and tunrs of some latent tech.

I think this optimism is what has gotten us here. Without understanding the dimensions of change needed, we willnot getthere. I do not see this magic kingdom of unfettered ecofriendly modernity. Damn we cannot even feed and keep the population happy for a mere quarter of the worlds population given the current tech, and somehow we are going to have this transformation so that we can all lazily mow our lawn with a push mower on a Monday afternoon.

Seriously, I have my doubts even with a huge cultural transformation in the economics means of the now. So I am very far away form this whole reduced work time situation for some elite group of workers in the world.

pt

tyears that ev time for the masses, has created all new areas of work, much of what many have labeled useless production.

Comment from Andrew Jackson
Time: March 9, 2009, 10:10 am

One thing I recall from my reading on this topic many years ago is that changes in working time arrangements tend to come in big changes to the social norm eg. cuts to hours in the day in the Victorian era, followed by the change in weekly hours with the demise of regular Saturday working after WWII, followed by cuts to the working lifetime with the growth in private pension coverage and extension of post secondary education. Most of these changes were consciously championed by unions. We arguably took a wrong turn after the 1930s, when the focus shifted from shorter hours (which was a major Depression era demand) to increased consumption (the norm of the 1950s and 1960s).

I think part of the obstacle to hours reductions today is the fact that there is no consensus re what new norm would be most desirable. Many would opt to cut hours through extended leaves (eg for traning, travel or care giving) as opposed to reduced weekly or daily hours. We have indeed managed to increase paid time off for caring even in recent years. Also, many don’t want to cut hours if that means a cut to consumption – though there is stronger support for taking part of the gains of productivity in the form of reduced hours along with higher consumption (assuming productivty gains are shared with labour, which has gnerally ceased to be the case.) Another complication is that the rise of the two earner family means that workign time is often planned in family rather than individual terms (eg overtime is often justified by reference to reduced work hours for a partner.)

In short, the major obstacle to futher working time reduction is the lack of a common shared vision about what new norms shoudl be the focus of our demands.

Comment from Martin Langeland
Time: March 9, 2009, 5:06 pm

With diffidence, I offer two books to add, I hope, another set of layers to the discussion.
The first is by Marjorie Kelly and William Greider:
“The Divine Right of Capital: Dethroning the Corporate Aristocracy”
It discusses the effect of the assertion by CEOS, capitalists (aka the rich) of privilege. Few share owners contribute, except in new share issues, to the capitalization of a particular company. Rather they are gamblers betting the stock they trade will go up or down the next time it turns over. Yet they claim the right to extract dividends from the company, and demand the CEO make it his top priority. Economic freedom should be part of “Life, liberty, and the pursuit of happiness”. It should be demanded as a condition of work. Only then will the commonweal, as well as the worker, receive the due they create.
The second is:
“Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights” by Thom Hartmann
Hartman details the history of the corporation which includes consideration of the misinterpretation of law which created the legal fiction that a corporation has the rights of a person.
I think these two books offer perspectives that reconcile some of the questions here: How do we go green? How do we make it possiple for work hours to be flexible? How do we insure that the world has a sufficiency, rather than most having far too little.
The world is a closed system. It is more than past time to build that awareness as the foundation of all our activity. (/soapbox) Which is to say: Your turn.
–ml

Comment from Mike B)
Time: March 10, 2009, 6:43 am

If you’re one of the people who (along with the rest of your class) is producing all the wealth in the world which isn’t already found in Nature, then shorter work time makes sense. Why work eight, ten, twelve hours a day producing wealth for others to appropriate when, as a class, you produce enough to pay your wages (what your employer buys your time and skills for) in the first hour or two?

There’s a reason why 10% of the people in the USA own 90% of the wealth. It’s the wages system or as someone once said in more obscurantist language, “It’s the economy, Stupid.”

Comment from Tom Walker
Time: March 10, 2009, 9:08 pm

Here is from the first two pages of Chapter 8, WORKING TIME: REDUCE AND DISTRIBUTE, from the CAW’s 2005
20th Anniversary Collective Bargaining Convention

From the earliest days of the labour movement, the regulation of working time has been a central union concern. We have demanded sufficient regular hours to ensure an adequate income, humane shift structures, limits on the arbitrary use of overtime, and an ongoing expectation that hours of work would be gradually reduced. Before the turn of the last century, unions were demanding a shorter workday. Initially the goal was to reduce daily hours from 12 to 10. Later, in the 1870s, thousands of workers marched throughout Ontario and Quebec in support of the 9-hour day. In the 1930s with the birth of industrial unions, workers were demanding regular hours, a stable work week, and a reduction in overall hours. The UAW’s first constitution drafted in 1935 reflects this expectation: “…(The worker) asks that hours of labour be progressively reduced in proportion as modern machinery increases his productivity.”

The issue of working time was a priority for the CAW from our birth. Our first collective bargaining convention acknowledged that “advance has been slow in terms of reducing the average week in spite of the liberating potentials of new technologies.” The convention urged our members to take their time off, and called on government to reduce annual hours. The convention also argued that overtime should be voluntary and be restricted whenever there were layoffs. At every collective bargaining convention since then, the duration of work time has been identified as a priority issue. From the start, our union adopted the twin strategies of legislative reform and collective bargaining to obtain shorter work time. At the bargaining table the strategy has been eclectic, involving a variety of approaches: reducing hours of work in the day or the week, increasing vacations and holidays, negotiating personal absences, and reducing lifetime hours through early retirement. On the legislative front we have argued for better parental and family leave entitlements, more vacation time, limits on overtime and daily hours, a shorter work week, additional holidays, and as training and educational leave.

Throughout the 1970s and much of the 1980s, business and governments told us that more leisure time would be the pay-off for the introduction of new labour-shedding technologies and work methods. This promise was hollow: hours of work did not decline. Then, in the late 1980s, the Ontario government set up the Task Force On Hours of Work and Overtime (1987), which included the then-Director of Research for the CAW, Sam Gindin. Among its key recommendations, the Task Force concluded that the standard work week be reduced to 40 hours after which overtime would be paid, that there be annual limits on overtime hours, and that all overtime beyond 8 hours per day be voluntary.

A number of years later the federal government established the Federal Advisory Group on Working Time and the Distribution of Work. The advisory group was chaired by Arthur Donner, and included Bob White, past president of the CAW and at the time, President of the CLC. Its final report called for a new emphasis in public policy to make the reduction and redistribution of working time a national priority. It recommended a legislated standard week of 40 hours, limits on overtime and the introduction of compensating time-off. The advisory group supported a series of worktime innovations that ranged from phased-in retirement to educational leave. The report concluded that these worktime measures would contribute to the country’s economic health and would address the problem of Canadians being either unemployed or overworked.

Unfortunately, instead of the progress envisioned by these commissions, workers have actually lost ground. The idea that workers should have greater workplace protections, more time off and greater work time flexibility was pretty much turned on its head. “Flexibility” became code for fewer work time choices for workers, more intensified work, and cheaper labour through the shift to part time jobs. Employers began to insist on a regressive definition of flexibility that would help them compete in the new era of free trade, footloose capital, and social program cutbacks.

The CAW has been a leader in the fight to reduce working time – which is crucial for attaining better living standards, and building stronger families and communities. Our willingness to keep our demands for work time reduction on the table, even as the strike deadline looms, sets us apart from other unions. We commit ourselves to continuing this historical tradition, and making further progress in the tough bargaining that lies ahead.

There are compelling reasons why we need to reduce working time. First, it is an important element in any job creation strategy. Even though the unemployment rate is at a 30 year low, some 1.2 million remain officially unemployed and we are still losing good paying, full time jobs. Underemployment is also a persistent feature of the labour market and opportunities for youth remain restricted. These issues require a solidaristic strategy on working time.

Second, dealing with working time is important to restore what is increasingly referred to as ‘work-life balance’. Workers are facing new demands around shared parenting and many face the combined pressures of caring for children as well as elderly parents. But time is also a basic democratic ingredient. Without time for family and friends, without the time for involvement in our unions, our communities or the political process, our public and private lives will continue to deteriorate.

Third, we are developing a better understanding of the effects of long hours on our health and well being. Research is stacking up, compiling the impacts of excessive work in terms of sleep disorders, hypertension, cardiovascular problems, substance abuse and unhealthy lifestyles.

For these reasons and others, reducing working time is now more important than ever. But a strategy on working time needs to be broader than reducing regular hours at work. For our members in service sector workplaces – from hospitality and gaming to retail stores – a strategy on working time also needs to be about maximizing and regularizing hours for part-time workers. Our working time strategy also includes demands for the regulation of shift schedules.

Comment from Tom Walker
Time: March 10, 2009, 9:11 pm

And here are the Recommendations of the 1994 Advisory Group on Working Time and the Distribution of Work (“Donner task force”):

General

1. The Advisory Group endorses a new public policy priority that emphasizes redistribution and reduction of working time.
2. The Advisory Group urges employers, trade unions, and employees to place more emphasis on working time issues and their implications in collective bargaining and workplace decision making.
3. The Advisory Group recommends that the Minister of Human Resources Development initiate energetic and broadly-based public discussions on the Report. We urge the provincial ministers of labour to participate in these post-report consultations, as part of a national dialogue, and/or that they undertake their own consultations.

Worktime Innovations

1. The Advisory Group calls on governments, as the largest employers in Canada, and on their collective bargaining agents to review the recommendations of this Report and to support innovative (workplace) practices to facilitate the reduction, reorganization, and redistribution of work in the public service.
2. The Advisory Group urges the federal and provincial ministers of labour to give priority to the issues of worktime in their deliberations and to examine the policies in their jurisdictions which would support new arrangements in the public and private sectors with the potential for additional job creation.

The Standard Workweek

1. The Advisory Group notes that marked disparities exist in the legislated standard workweek across Canada. We recommend that the legislated standard workweek be no longer than 40 hours per week in any jurisdiction.
2. The Advisory Group recommends that federal and provincial governments periodically review the legislated standard workweek to ensure that the standard moves with the normal full-time workweek in their jurisdiction.

Overtime

1. The Advisory Group recommends that employees be given the right to refuse overtime work after the legislated standard workweek of 40 hours and that this right be incorporated into employment standards legislation.
2. The Advisory Group recommends that employers and employees utilize time off in lieu of overtime pay after the standard workweek.

Annual Hours and Time-off in Lieu

1. The Advisory Group recommends that the maximum amount of overtime in excess of regular working hours for which compensation can be paid be set at 100 hours annually. Overtime in excess of the 100 hours should only be compensated on the basis of time off in lieu of overtime, at the overtime rate.
2. The Advisory Group recommends that the hours of work coverage under employment standards legislation be broadened to include salaried employees and other full-time workers who may now be excluded. Similar annual limits on overtime and the requirement for time off in lieu of overtime pay beyond 100 hours would apply to this group.

Contingent Work Force

1. The Advisory Group recommends that employment standards be vigorously enforced, especially for part-time workers and for those outside the normal workplace environment. Special attention should be paid to non-standard workers to ensure that they are fully covered and protected under employment standards, have access to collective bargaining, and receive at least the minimum hourly wage and other workplace-related social benefits.
2. The Advisory Group recommends that a registry be created in all jurisdictions to cover employees who work at home. Employers would be obliged to provide information on hours of work and pay for their home-based employees. It should include a mechanism to enable employees to register and to verify the accuracy of the information about their hours of work and their pay.

Part-time Workers

1. The Advisory Group recommends that employers be required to provide pro-rated benefits to regularly employed, part-time employees.

Retirement

1. The Advisory Group supports wider adoption of the practice of phased-in retirement, under which older employees are encouraged to work reduced regular hours or take leaves of absence as a transition to retirement.
2. The Advisory Group recognizes that a major obstacle to phased-in retirement could be the reduction of future public and private pension benefits. We recommend that governments, employers, unions, and employees consider changes and their implications to public and private pension plans, arrangements, and regulations, to ensure that phased-in retirement does not substantially reduce future pension benefits.

Family Leave

1. The Advisory Group recommends that employment standards in all jurisdictions provide a right to take an unpaid leave of absence from work after the birth or the adoption of a child at least equal to the period of entitlement to Unemployment Insurance under maternity and parental benefits (15 weeks maternity benefits and the 10 weeks of parental benefits payable to the mother of father). Serious consideration should be given to the general adoption of the Quebec standard of 34 weeks of leave.
2. The Advisory Group recommends that Canadians be entitled to five days of unpaid family leave per year, the current standard in Quebec. These leaves would be linked to the care and health of immediate family members.

Education and Training Leaves

1. The Advisory Group recommends the increased adoption of paid education and training leave plans through the joint agreement of employers and employees and unions.
2. The Advisory Group recommends that a basic entitlement to unpaid education and training leaves be entrenched in provincial and federal standards in order to expand opportunities for learning. The ability to gain access to this entitlement should be linked to the length of service with a company or organization.
3. The Advisory Group urges the federal government to support greater use of education leaves by considering changes to the tax system such as income averaging.

UI Worksharing

1. The Advisory Group recommends the continuation of the UI worksharing program for reducing short-term layoffs. However, the applications process should be reviewed to ensure that it is more accessible, particularly to small business.

Post-Report Processes

1. The Advisory Group recommends that the responsibilities of existing organizations be expanded to promote and report on worktime redistribution and flexible work arrangements over the longer term. It recommends that the Canadian Labour Market and Productivity Centre (CLMPC) focus on ongoing consultations between business and labour, while the Bureau of Labour Information (BLI) focus on disseminating information on changing worktime practices.

Information Needs

1. So that all Canadians may better understand the changing workplace, the Advisory Group recommends that Statistics Canada monitor these trends, and specifically: a) conduct periodic surveys of worktime preferences and practices of both employers and employees; b) provide more data on the non-standard workforce.

Comment from Tom Walker
Time: March 20, 2009, 10:38 pm

See the March 2009 report, “The Housing Crash Recession and the Case for a Third Stimulus,” by Dean Baker from the Center for Economic and Policy Research.

The other obvious mechanism for quickly boosting demand is employer tax credits for giving workers paid time off. The paid time off can take a variety of forms, such as paid family leave, paid sick days, paid vacation days or a shorter workweek. The idea is that the government would give an employer a tax credit of up to $2,500 per worker per year to cover the cost of a reduction in work hours of up to 10 percent of their work time.

This tax credit, like the health care tax credit, could be implemented with very little lead time and little bureaucracy. To qualify, an employer would need to post on a public website the reduction in paid work time that they have put in place. Since workers could see the work-time reduction claimed by their employer, they would be able to verify that the policy has in fact been put into place. The arithmetic on this is straightforward. Suppose that employers of 60 million workers reduce their work time through family leave, sick days, or shorter hours by an average of 5 percent, at an average cost of $2,000 per worker. Since demand will not have changed (workers are getting paid just as much as they had previously), employers will in principle want to hire an additional 3 million workers to make up for the lost labor hours. This would imply 3 million new jobs, or jobs saved (in many cases, it may prevent layoffs that would have taken place otherwise), for an expenditure of $120 billion.

The great virtue of this sort of tax credit is that it is both boosting GDP and also increasing the number of jobs for every level of GDP. If everyone in the economy worked 5 percent fewer hours, and we had the same level of output, then we would have 5 percent more people working. For this reason, it is the most efficient mechanism for bringing the economy back to full employment.

Comment from Pat
Time: March 21, 2009, 5:55 am

If the central banks would stop imposing high unemployment then labour could find its own price which would be much higher than it is now.

I don’t see where making a case for shorter working hours under the currently imposed NAWRU would be of any benefit to labour. Less hours would mean less income per person but shared over a larger number of people.

Get the creation of money back under government control, issue debt free sovereign money, and eliminate the massive increases in money supply that a debt based money supply requires. There would be no need to control wages through unemployment to keep classical inflation at bay and market forces would allow labour to find its own price AND its own working hours.

The productivity per person today is orders of magnitude higher than when the 40 hour work-week became the standard. If not for the massive drain of value that is our money system people would long ago have demanded and gotten shorter work weeks.

How much does the Federal government pay banks just in interest for renting our money supply? 30 billion a year? 40 billion a year? The debt from using this rented money supply is over three trillion dollars, if you assume an average of 10% interest thats 300 billion a year of our productivity vacuumed up by the wealthiest few percent of Canadians. How many person hours of labour do we waste simply paying for our money supply?

Comment from Gregory Wright
Time: May 20, 2009, 1:31 pm

Marc Lee, Tom Walker, and Dean Baker of the Center for Economic and Policy Research make a good “Case for Working Less.”

Marc asks, “The big issue is how we get there, or what this means in terms of policy. I was hoping Tom would address this… So Tom, what’s the action plan? Is there any public opinion research that points to where people themselves would like to go in terms of hours of work?”

Many cogent comments are made here, but no mention appears about the truly “work hours” devoted to Americans’ — and I assume Canadians’ –longest-in-the-world commuting! These enormous VMT (vehicle miles traveled) and the time they consume constitutes a massive piece of many workers’ work time. So “how we get there,” I suggest, is the adoption, at the federal level in both the U.S. and Canada, of a newly redefined standard legislated workweek of 36 hours, to enable America’s and Canada’s car-borne workers, and especially the growing legions of long-distance “extreme commuters,” to work four-day work weeks of a much more decent nine hours instead of ten, which is way too many hours when bracketed by 40-, 60-, and 80-mile one-way commutes. The prevalence of “extreme commuters” — commuters who drive more than 90 minutes to, and from, work — has skyrocketed 95 percent since 1990 in the U.S. The result will be a better quality of life, less use of gasoline, and reduced CO2 emissions.

Or, if you will, More Time, Less Carbon.

Which is the title of a short article I wrote on the Take Back Your Time website: http://www.timeday.org/news-vol5issue1.asp#03.

Also see http://www.ondayone.org/user/1444.

And Aaron Newton’s “The Four-Day Work Week: Sixteen Reasons Why This Might Be an Idea Whose Time Has Come,” at http://www.groovygreen.com/groove/?p=2223.

We need to allow as many workers as possible to hold a full-time job, and earn a full-time paycheck and full-time benefits, in four days of work a week instead of five. In the U.S. we should amend the 1938 Fair Labor Standards Act to change that 40 hours of “full-time” work, for the sake of assigning benefits, to 36.

U.S. workers are the most car-intensive commuters in the world, 88 percent of them getting to work by automobile (and SUV, and pickup truck, and Hummer), and 77 percent of these are driving solo! Which has a lot to do with the U.S.’s highest-per-capita carbon emissions, and our sad dependence on volatile and dangerous regions of the world for our liquid fuel. Fixing this is a perpetual goal of U.S. policy that is never achieved. The 36-hour workweek will reduce the amount of (usually fossil) energy devoted to this commuting by one-fifth while work hours are reduced by one-tenth. The current period of reduced employment and need for more jobs is the perfect time to push this reform, but the silence has been rather, well, quiet.

Comment from Michael Berney
Time: June 8, 2009, 6:30 pm

I am not an economist but am deeply concerned about this issue.

As I understand it generating work so as to avoid unemployment is one of the main reasons given for the desirability of economic growth as well as for the almost pathological fear of reduction in growth. Whether the production that constitutes this growth is really needed or is even destructive seems to be given secondary importance.

I believe one of the things that keeps us in this absurd situation is that working for a living has become our means to survival even if the things that that work produces contribute nothing or are destructive to our well being/survival. It seems that we have the technological and organisational knowhow to have a more than adequate lifestyle on much less work than we are doing now. I think one of the main reasons this does not happen is that we elevated an abstract concept (working to earn a living) to equal if not greater importance than the actuality of working to produce the real needs for living. Once we have produced what is needed for our level of lifestyle then it is patently absurd to go on working simply to get the means to access the things that had already been produced.

Some people advocate the guaranteed minimum income as a way of solving this problem. While I am not against that, I believe a lot can be achieved by staying with the problem for longer. Once the absurdity of what we are doing would be seen more widely, then enormous amounts of energy to find creative solutions would be released. By absurdity I mean that we are running faster and faster to stay in the same spot or even go backwards when we could just let the machines do most of the running for us.

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