The Case for Shorter Work Time

by Bruce O'Hara

The future isn't is what it used to be...
As late as 1970, futurists were predicting that a 3-day workweek would be the norm by the 1990s. Articles of the day imagined that the biggest problem we would have in the 1990s would be figuring out what to do with all that free time.

That future is now. Instead of one breadwinner working 24 hours per week, most families now have two breadwinners each working 40 hours per week. And despite extra earners, longer work hours, and higher productivity, real family incomes in Canada have been falling since 1980.

Advances in technology mean that Canadian workers can produce more wealth in less time. Why, instead, do we find ourselves working more, and earning less?

Historically, shorter work times have been our primary and most effective tool for keeping unemployment low. Over the period between 1800 and 1950, the standard workweek was reduced by an average of three hours every decade. Sharing the work insured that labour-saving technology created leisure, not unemployment. In the simple maxim of labour pioneer Samuel Gompers: "So long as there is one who seeks work and cannot find it, the hours of work are too long." It's important we understand why we abandoned that winning and proven strategy.

The Triple Failure of Growth Economics

At the end of the Second World War, the North American economy was starved for consumer goods. As fast as that pent-up demand could be filled, the baby boom created new demands. Economist Walter Rostow was swept up by the fantasy that the rapid growth caused by these very unusual circumstances was normal and could continue forever.

Rostow theorized that economic growth alone could create full employment; shorter work times were no longer necessary. Virtually the entire economics profession embraced Rostow's theories.

For politicians, the economists' vision of a spiral of ever-expanding wealth was an easy sell: we don't have to argue about how to share the pie, we'll just make the pie bigger. So governments, following economists' advice, pushed growth as the key to full employment.

By the time it became clear that the post-war baby boom was just that, a temporary boom, an entire generation of economist--and politicians--had built their careers on the ideology of permanent growth. They had invested too much in the theory of growth to abandon it just because it didn't work!

The attached graph is called The Unemployment Staircase. It charts the average unemployment rate for each economic cycle over the past 50 years. Each time there's a recession, the unemployment rate shoots way up - but it only comes part way down during the recovery that follows. As a result, Canada's baseline unemployment rate has been rising about 2 percent a decade. Most people need only to look at The Unemployment Staircase to see the points when we should have reduced work hours, and didn't.

[Unemployment Staircase Graph]

During each of the last three recessions, (at the three down arrows) our governments spent billions more than they took in in order to hold down the unemployment rate. In the next recession, (by the up arrow) we can expect instead to see the unemployment rate to be pushed way up (officially to around 16%, which translates to 25% in the real world!) as interest charges suck billions of dollars out of the economy.

With each step up the staircase, higher unemployment has pushed wages down and driven taxes up, resulting in the strange paradox that our reward for improving our productivity has been a declining standard of living.

It is only over the next generation that the third failure of 50 years of non-stop growth will become apparent. Bill McKibben's book The End of Nature catalogues the terrible price we can expect to pay over the next 50 years. Uncontrolled growth has vastly magnified the Greenhouse Effect. Scientists are predicting that half the world's ocean beaches will be flooded; half of the world's river deltas--some of our most fertile land--will be threatened with inundation; huge swathes of forest land will be destroyed by a combination of forest fires, insect plagues, and disease; weather will become more extreme and unpredictable. Uncontrolled growth is creating an environment where, in Paul Hawkins succinct phrase, every living system is in decline.

If growth is a suicide machine rather than a vehicle to full employment, how can we put Canadians back to work?

If politicians raise the work time issue at all, they tend to favour small and voluntary reductions. Economist Frank Reid has examined numerous situations where work hours have been shortened, and Reid found that if the reduction in work time was small, or affected only a few workers, little new hiring resulted. Reid found that shorter work times can be effective in creating new hiring, but only when three conditions are present:

  1. the reduction in work time is large, say a half-day or a full day each week;
  2. the reduction in hours affects many workers at once;
  3. overtime use is restricted.

The Leisure Solution

Controls on overtime work have the potential to create somewhere between 150,000 and 250,000 new jobs in Canada. A hefty tax on all overtime would motivate employers to cover peak loads with permanent relief staff, rather than overtime. Also helpful would be the conversion of all salaried positions to hourly wages. (Unpaid overtime is the biggest form of employee abuse in Canada today.)

Family-friendly schedules offer the possibility to create somewhere between 250,000 and 500,000 jobs, just by allowing the people who want to work less to do so. Employment standards legislation guaranteeing part-time workers the same hourly rates of pay, and the same job protections as full-time workers, plus a pro-rated share of benefits, will make it safer and more affordable to choose to work less. Canada should also look at what Frank Reid has dubbed Right to Not Work legislation, whereby no employee could be denied a request for reduced hours unless an independent review panel agreed that it was not feasible in that particular job.

Finally, making the move to a 32-hour standard workweek offers the opportunity to create more than one million new jobs across Canada. If done intelligently--and all at once--the shift to a 32-hour workweek could be done with only a 5% loss in take-home pay.

If statutory holidays are all placed on long weekends (i.e. they are unpaid) the actual reduction in work time will be 16% rather than 20%. Research evidence suggests that the productivity of workers on a 32-hour workweek will be about 5% higher. A 32-hour workweek will so drain the unemployment rolls that the 7% of payroll that now goes into U.I. could stay in workers' pockets.

When these savings are factored in, if employees take 5% less pay for a four-day workweek, employers' total wage bills will rise by only 5%. I would suggest that Canadian employers will be able to afford that added cost, doing business in the robust economy that will result when more than a million Canadians go back to work.

Making It Happen

If the futurists made one false assumption about the future, it was the idea that labour-saving technology would create miracles all on its own. That's like thinking you can put your car on cruise control, and then curl up for a nap!

New technology offers us a wonderful opportunity to have more time for our families, more time for friendships and hobbies, more time to be involved in our communities. But if we continue to try to combine the technology of the 1990s and the family structure of the 1990s with the workweek of the 1940s, the result will be not leisure, but more and more unemployment, and an economy which staggers from one recession to the next.

In the past, shorter work times have come not from the political or corporate elite, but from grassroots movements involving thousands of ordinary Canadians. The Shorter Work Time Network of Canada is working to create a similar coalition for change today.

To be successful, the movement will need to involve a broad cross-section of Canadians: organized labour, women's groups, church groups, anti-poverty groups, political parties, pro-family groups, academics, environmentalists, health professionals, progressive businesses, public sector workers, students, the unemployed, and the overworked.

The Network has organized chapters in nine Canadian cities, but much of the real growth in activity is in the form of informal linkages with individuals and organizations who share a similar vision of a society that works for everyone.

When almost everyone is stressed out--either by unemployment or overwork--it's necessary to create a "Psst, pass it on" movement where a great many people do a little bit each.

You too can be part of the chain reaction that will enable us reclaim the future. Ask yourself: What small step could I take to bring the work time issue to the attention of my friends, my work-mates, or my community?

Sharing the work can create full employment--and it won't cost the Earth. Pass it on.

Bruce O'Hara is the coordinator of the Shorter Work Time Network of Canada and author of Put Work In Its Place and Working Harder Isn't Working.

This article is in the public domain. Feel free to photocopy it, and to reprint it in community newspapers, newsletters, trade journals, E-mail, etc.

The Shorter Work Time Network can be reached by phone at (604)334-0998 or write Box 3483, Courtenay, BC, V9N 6Z8.

Posted as a public service by knoW Ware Communications
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