ECONOMIC TRENDS & Outlook
CREATING JOBS THROUGH SHORTER HOURS
The Government’s Role
The government could encourage bargaining to reduce hours, set an example by adjusting hours on government work and/or enact new workweek legislation. A positive policy would require specific announcement that the Administration would not discourage reductions in hours and would welcome this, at least in particular industries, as one of the variety of measures individual industries might use to bolster employment security.
Setting an example, in its role as an employer as it has done in the past. would require establishment of new reduced workweeks for employees to serve as an experiment and broad guide for private industry. It is worth noting that about a third of U.S. municipal governments already have fulltime workweek schedules shorter than 40 hours for their administrative and clerical employees.
New workweek legislation could of course take many forms. The principal approaches suggested have called for a reduction in the 40-hour standard established by the Fair Labor Standards Act, either immediately or in several steps spread over a period of time and either uniformly for all covered industries or through a special industry committee procedure functioning on an industry-by-industry basis. Each of these alternatives has some past legislative precedent.
Another major suggested legislative approach is a flexible workweek to be adjusted according to changes in the unemployment rate. A federal fund financed by a tax on employers could be established to help maintain weekly pay and national consumer purchasing power upon such reduction in hours. If the payments from the fund were scaled according to whether the employer hired more workers when he reduced hours, there would be an additional incentive for increased employment.
3 comments:
I am convinced that you are right in your push for sorter hours as a way of reducing the privatization of economic rent and increasing utility for the productive people. But until the health insurance problem is resolved there is no way to make this happen here in the Unites States.
Your posts on this subject do much good in illustrating the adverse effects of employer paid health insurance and retirement whether you intend that or not. The problems in the American auto industry clearly illustrates the inability of private industry in providing for health and retirement needs.
I wish one of the, so called, economists (I am not one) that post here would devote an article or two to labor mobility and include also the immobility of illegal immigrants.
Labor immobility is, in the USA, probably the most crippling handicap for increased wages. And to my way of thinking it is increased (hourly) wages that allow the producers to have choice between leisure and lip gloss.
until the health insurance problem is resolved...
I don't think a "first one thing, then the other" solution is feasible. Government health insurance and shorter work time go hand in hand. Historically, employer-paid health insurance became widespread as a way of getting around war-time wage controls. Thus, it was a way of compensating the pervasive overtime work during the second world war. So the two issues are not at all isolated from each other.
Further to the connections between employer-paid health insurance and working time...
There was a grassroots campaign for "30 for 40" in the UAW during the 1950s and 1960s, with wavering commitment to it from the union leadership. Part of the political maneuvering around the demand had to do with appeals to retired workers as a voting block. So there was an element of bargaining away shorter work time demands in return for enhancements to the pension package (the infamous legacy costs). See Jonathan Cutler's Labor's Time: Shorter Hours, the UAW and the Struggle for American Unionism.
"The older members who managed to hang on to their jobs were either retired or near retirement and they ultimately outnumbered the actively employed element of the membership. Among retirees, the attention shifted from shorter hours to early retirement. Local union officials discovered that they could ignore the shorter hours demands of actively employed workers with impunity so long as they carried the vote of the retirees."
The advantage to the companies of loading contract gains on retirement benefits is that they could offer something they didn't have to pay for up front.
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