Hours of Work: Moving Beyond Gridlock

 Further steps towards a reformation of society can never be carried out with any hope of success, unless the hours of labour be limited, and the prescribed limit strictly enforced.

R.J. Saunders, English factory inspector, 1848
To expand on Frank Schiff's cryptic comment about removing the institutional biases, I've mapped out tentative public policy responses and collective bargaining strategies to address the dilemma of work time distribution. These suggestions are not quite as simple and intuitive seeming as "time and a half for overtime" (or double-time or triple-time). In fact, the problem with any overtime premium is that it's too simple a solution -- a non-solution, really -- to deal with a complex decision situation.

The difficulty of solving the dilemma of work time is that "it" is several different problems from the perspectives of the workers, unions, governments and employers. From the perspective of the worker, the goal is to hold on to an expected level of income and benefits and obtain increases where possible. From the perspective of the union, the goal is to achieve an agreement that the worker will accept as worthwhile -- which is not exactly the same as the worker's goal. From the perspective of the employer, the goal is to minimize unit labour costs and retain as much control as possible over the quantity of labour power purchased during any particular period. From the perspective of the government (assuming the government is acting responsibly -- perhaps a questionable assumption), the goal is to maintain full employment so as to promote the public welfare, maintain social peace and generate healthy tax revenues.

The full solution would require both public policy changes and changes in collective agreements. But the strength of the strategies outlined below is that incremental progress can be made on either front without waiting for the other. There is also an educational component, which is presented after outlining the public policy and collective bargaining approaches.

There is little point to fleshing out the sketchy proposals below until a public discussion can begin about the need for reducing work time and redistributing work. Furthermore the suggested options are self-consciously moderate -- there is little point imagining a maximum program without at least the beginnings of a social movement. In short, the suggestions below are intended more to start the next discussion, not conclude this one. As Andre Gorz wrote at the end of Critique of Economic Reason, Here then is the reasoning behind my proposals. They are not the only proposals. You could make other ones based on other reasoning . . .

On the public policy front:

  1. Remove ceilings on employer contributions to statutory government programs, such as unemployment insurance, pensions and workers' compensation. In the States, the ceiling on OASDI is already high enough that it isn't a factor, but unemployment insurance has a low ceiling and is a problem. In Canada, unemployment insurance, the Canada pension plan and workers' compensation all have ceilings that give employers an incentive for overtime work, especially for higher paid workers.

  2. Re-examine tax exemptions for employer paid fringe benefits. If such exemptions are to be retained, they should stipulate that the benefits must be prorated as a percentage of earnings or accrued on an hourly basis. This would convert them from fixed to variable costs.

  3. Amend regulations for statutory holidays and breaks so that they include additional paid time off entitlement for hours worked beyond the stipulated minimum and include pro-rated entitlement for holiday pay for temporary and on-call workers. Vacation time already works this way (at least in British Columbia), there is no reason statutory holidays can't also work this way.

  4. Close the time and a half loophole in the legislation limiting the hours of work. Exceptions should be made only for emergency work and to meet bona fide non-economic requirements of an industry. Exceptions to the limit on hours of work should require permits, public hearings and a process that allows for challenges from the public against abuses. Extend the protection of hours of work legislation to salaried workers. People who moan about loving their work so much can still work long hours, they just shouldn't be allowed to do it for an employer and thus violate other people's right to not work long hours.

On the collective bargaining front:

  1. Negotiate changes in fringe benefits so that they are prorated as a percentage of earnings or accrued on an hourly basis. This would convert them from fixed to variable costs. (This is a direct complement of policy proposal number two. The needed change thus could be achieved either legislatively or through collective bargaining.)

  2. Where appropriate, (this wouldn't necessarily apply to all workplaces) negotiate a targeted -- not a fixed -- shorter work week. What this would mean is giving workers a secure base of hours and a definite cap (not to exceed 40 hours), between which the actual hours could vary from week to week. This proposal acknowledges some aspects of the current situation where 40 hours is the base, there is no cap and hours fluctuate around an average of, say, 43.

  3. Re-examine collective agreements and labour costs to identify and reclaim wages that may have been lowered to offset the costs of paying overtime premiums for regularly scheduled overtime.

On the education front:

  1. Re-examine the concept of "employer-paid" benefits. Who really pays for such benefits? In some cases, employer paid benefits may be an administrative convenience for workers. In other cases, they may represent a compulsory purchase of insurance that workers may not want or need. If workers imagine that the benefit is a gift from employers, they may be less vigilant in asking whether the coverage is what they want or need.

  2. Develop "know your paycheque" workshops and materials to investigate what happens to the illusory "time and a half" overtime premium. For example, after taxes, an hour of overtime for a worker with a good union job will yield about 85 percent of the net pay and benefits for regular time. How does 85 percent compare with 150 percent?

  3. Expand the cost/benefit analysis of overtime to include the social costs of unemployment or of the diminished community participation of people who are locked into an addictive/compulsive cycle of overwork and spending on "toys."

  4. Open a discussion of the relative importance of solidarity and seniority. For unions, seniority only makes sense as a procedural rule if it is a way of defending the fundamental principle of solidarity. Too often, unions treat seniority as the fundamental principle and solidarity as a slogan justifying that principle.

    A clear analysis of overtime makes it impossible to regard overtime as the rightful entitlement of senior workers, insuring them whatever higher incomes they may desire. It is a tax on the unemployed and on lower paid workers, only a portion of which is even retained by the worker who puts in the extra hours. If a worker wants to do cut-rate work after hours, the union shouldn't defend such block-headedness. Union members should honour the legal limit on hours of work in the same way they honour a picket line: "You don't cross."