Monday, January 19, 2009

Britain needs a shorter-hours culture

by the Sandwichman

David Spencer in the Guardian
this morning echoes two of the Sandwichman's favorite talking points:
In a letter to the poet TS Eliot in 1945, he [Keynes] suggested that unemployment could be lowered by the reduction in working time. Indeed for Keynes this was the "ultimate solution" to the unemployment problem. Reducing work time not only extended the time during which workers could spend income and hence generate employment, but it also allowed jobs to be spread out more evenly across the available workforce, thereby reducing unemployment.
and...
Orthodox economic theory teaches that those who argue for shorter working time succumb to the "lump of labour fallacy". This is the idea that there is a fixed amount of work to be done in society, so any reduction in work hours must increase the number of available jobs. It is argued by orthodox economists that the amount of work is not fixed and that reductions in work time will simply add to firms' costs. But the above fallacy is not wholly persuasive. If reduced hours encourage people to work more efficiently, then the effect may be to lower prices and to increase the demand for goods and services and in turn the demand for labour.

1 comment:

Ted Seeber said...

One thing I've noticed in my own life- I've had time to earn, time to spend, but never both at the same time. Makes my personal bank account graph like a roller coaster- including a few times in the negative.

Shorter working hours for the same pay means more time to consume- which yields more work to do, not less.