by Trudy Goldberg, Chair, National Jobs for All Coalition
Another strategy to reduce unemployment is to reduce work time. This can be done by decreasing the length of the work day or increasing the number of vacation days. This strategy has been proposed as a means of dealing with chronic unemployment or of reducing mass unemployment during a. downturn such as the Great Recession. In the mid-1960s, when unemployment was relatively low by today s standards 5.7% in 1963 and 5.2% in 1964–the eminent manpower expert, Sar Levitan, evaluated reduced work time as a means of coping with what he referred to as the persistent [sic] high level of unemployment which has prevailed for nearly seven years (1964, p. 1).
In 2009, during the Great Recession, work sharing, made possible by a number of state unemployment insurance plans that paid benefits to workers whose hours were reduced, saved an estimated 166,000 jobsÂ (National Association of State Workforce Agencies, cited by Schor, 2010). With official unemployment in the 14-million range and hidden unemployment taking a similar toll, (table 1), the number of jobs saved by this means of work sharing seems miniscule. Nonetheless, the economist Juliet Schor (2010), a major current advocate of reduced work time who sees it as a means of dealing with a number of problems overwork, environmental degradation and unemployment considers this as a promising development, an exit ramp to a new and saner economy. This seems unduly optimistic.
Reduction of work time was a major demand of labor. Over the years, the rationale for reduced work time has varied. In the 19th century, improving citizenship was one of the reasons given: that industrial workers would have the time to improve themselves and consequently exercise their rights as citizens more effectively (Levitan, 1964). However, the principal considerations in cutting the 60-hour workweek were social in nature. Health and fatigue factors and a desire for leisure were key considerations (ibid., p. 1). Reducing unemployment has also been a consistent rationale for shorter work time. Samuel Gompers, founder of the American Federation of Labor (AFL), put the case powerfully: so long as there is one man who seeks employment and cannot obtain it, the hours of work are too long (1887, cited by Schnapper, 1972, p.250). In a similar vein, a century later, social worker and social policy professor David Gil, wrote that what we ought to do instead of arguing endlessly over job-creation, is to redistribute all presently undertaken work in a manner that assures everyone s inclusion by varying the legal length of the workday whenever necessary, so as to ensure a continuous match between the number of available workers and the changing scope of production (1983, p. 8).
Due in large part to workers struggles, the work week was dramatically reduced between 1860 and 1960–from 68 to 41 hoursÂ (Levitan, 1964). In the next decade or so, hours per week and the number of weeks worked per year fell somewhat. However, after 1973, average weekly hours fell slightly and the number of weeks per year increased to a greater extent (by 8% between 1973 and 2000) (Mishel et al., 2005, table 2.2). According to the Bureau of Labor Statistics, the average work week of full-time workers has been around the 40-hour mark from 2003 through 2010 (U.S. Bureau. of Labor Statistics, 2003, 2009, 2011a). In 1999 annual work hours were 4% higher than in 1980 and were higher than in any other industrialized country (Golden & Jorgensen, 2002; see also Gornick, 2010). Productivity growth or output per worker slowed after 1973, but in the next 20 years nonetheless grew significantly more than wages or compensation (Mishel et al., 2005). Productivity growth could have been used to reduce work time or increase workers pay. Instead, wages fell and hours of work rose. The decline of the labor movement no doubt contributed to this reversal of a century-long process.
While the average work week is 40 hours, many work more than that. A decade or so ago, almost one-third of the workforce regularly worked more than the standard 40-hour week, and one-fifth,worked more than 50 hours (Golden & Jorgensen, 2002). The Fair Labor Standards Act of 1938, an important New Deal measure, penalizes overtime by requiring that workers covered by the Act be paid an overtime premium of at least one-half the regular rate of pay for each hour over 40 during the work week. However, around the turn of this century about one-third of the work force was not covered by this requirement (Golden & Jorgensen, 2002, citing Department of Labor estimates). Moreover, despite the penalty, many employers prefer to pay overtime rather than to hire and train new workers. Another reason for eschewing new hires is that overtime does not increase the cost of some fringe benefits whereas these would have to be paid to new workers. Stiffer penalties and wider coverage of the law would seem an obvious means of reducing overtime. Further, the disincentive to shorter hours would be reduced by removing the cap on employers payment for workers benefits as well as shifting responsibility for benefits such as health care away fromÂ employers, for example to the government (Schor, 2005).
With more time on the job and particularly with the increase in two-worker families, many Americans are over-worked. Although it means more money in the paycheck, overwork poses clear drawbacks for workers–stress, workplace accidents, sleep deprivation, less family time, including child care, and little left over for recreation, leisure, adult education and community participation (Schor, 1991; Golden & Jorgensen, 2002; Bianchi & Wight, 2010). Thus, overwork creates many problems for individuals, family and society. In the long run, workplace accidents, absenteeism and workers health and mental health problems are detrimental to employers, but many favor short-time advantages.
At the same time that some employed Americans are overworked, many others, as discussed earlier in this chapter, are unemployed, not only in bad times but in better ones as well. The sociologist Herbert Gans (2011, p.A35 ) has pointed out that the jobless recovery from the Great Recession is increasing the number of superfluous workers. Among other policies, Gans has called for work sharing: reducing working time perhaps to as low as 30 hours a week, with the lost income made up by unemployment compensation& . .
How effective is reduced work time in lowering unemployment? Several European countries have pursued the policy, and in general it does create jobs but not in direct proportion to the amount of work time reduction (Askenazy, 2007; LaJeunesse, 2009). For example, if the 40-hour week were reduced to 35, a five-hour reduction for seven people would not make room for one full-time, 35-hour-a-week job. Based on review of an econometric analysis of the 7% reduction in work time in France between 1999 and 2001, economist Robert LaJeunesse concluded that half of the job-creating potential of work time reduction can be viewed as being offset by greater labor productivity (2009, p. 216). Just as recent work-time reduction in the United States has been underwritten by public subsidy, that is, unemployment benefits, the French experience depended on contributions from the state. According to economist Philippe Askenzy (2007), the effort to achieve a 35-hour work week in France was not carried out fully, and if it had been, the cost per job to the government would have been about the same as that of compensating a nurse or police officer. Askenazy asks whether the money would be better spent in developing public services in other words, direct job creation. Insofar as public monies would be used, it may be preferable to choose what kinds of jobs to subsidize.
One might apply this reasoning to the assumed, yet unproven effects of reduced worktime on the environment. Direct creation of jobs that would make residential and commercial building more energy efficient might be a more certain approach to sustainability. Job creation in the social infrastrcuture such as education and child, elder and health care is compatible with sustainability. Moreover, work sharing might well preserve jobs that contribute to environmental degradation. Since there are compelling social reasons to reduce overwork, it seems important to pursue both worktime reduction and direct job creation. Why not creation of 35-hour-a-week jobs. This, of course, is unlikely to occur without significant political change.