Thursday, February 19, 2009

5,000 Characters

by the Sandwichman

The White House Task Force on Middle Class Working Families has increased their comment submission length from 500 to 5000 characters. The Sandwichman submitted the following 4,994 character summary, along with a link to a longer version:

The key to addressing the issues of work and family balance, labor standards, equitable distribution of the fruits of economic progress and protection of the environment lies in regulating and limiting the hours of work. In the absence of countervailing union pressure or government policy, there is a structural bias that leads to the prevalence of socially and environmentally harmful long hours of work. This summary outlines the case for work time reduction and draws attention to a promising policy innovation to redress the current imbalance. A full, hyperlinked version of this submission is available [at the end of this post].

American families have changed substantially since the 1960s but many policies aimed at assuring income security have remained unchanged since the New Deal of the 1930s. Today, two-thirds of all families with children are either single-parent or dual-earner families. Between 1979 and 2000, the hours worked per year by married couples with children increased by 16 percent, or nearly 500 hours. Bernstein and Kornbluh noted that without that increase in hours worked, the incomes of middle- and lower-income families would have stagnated or declined. That conclusion, however, overlooks the possibility that the increased supply of hours may itself have contributed, through a feedback effect, to wage stagnation.

Most work-family advocates in the U.S. focus on the need for family-friendly policies such as child-care, paid family leave and flexible scheduling that mitigate the effects of a seemingly immutable working time regime. "The challenge," though, Kornbluh has noted, "is to frame work-life balance as a broader political economy issue."

Historically, work-life balance was framed as a broader political economy issue in labor agitation for shorter working time. For nearly a century, from the 1860s to the 1950s, American labor unions also put forward the reduction of working time as their focal strategy for combating unemployment. After the Second World War, though, the unions' enthusiasm for shorter hours waned. Instead, the AFL-CIO primarily focused its efforts on urging government spending to foster economic growth and only sought shorter hours as a "last resort."

What changed between the 1930s and the 1960s was the acceptance of the idea that government spending could stimulate economic growth. Although popularly referred to as "Keynesianism," Keynes himself did not accept the idea that boundless expansion of production and consumption was worthwhile for its own sake. Instead, he specified working less as the "ultimate cure" for unemployment. The imperative for growth was a notion added by later economists.

Continued economic growth, fostered by government fiscal and monetary strategies, has led to an increase in effective demand for what Hirsch called positional goods. Competition for these socially or physically scarce or congested goods draws resources away from the output of final consumption goods and also exacts a personal cost in terms of time pressure. Individuals are compelled to spend more time in market activities and thus have less time to spend in non-commercial pursuits such as production for home consumption, leisure and sociability. "This has helped to upset a long-held expectation about the potential fruits of economic growth – namely, that they will be taken increasingly in the form of relief from material pursuits."

Rosnick and Weisbrot
estimated that if European countries adopted the long working hours prevailing in the U.S., they would consume 25 percent more energy. Conversely, if the U.S. adopted working times closer to the European average, it would consume 20 percent less energy. Assuming that the intensity of greenhouse gas emissions per unit of GDP continues to decline at a rate consistent with the historical trend, economic growth averaging 2.5 percent annually would increase emissions by around 75 percent over the next 30 years. Meanwhile, poverty and unemployment will creep steadily upward. The alternative to continual economic growth and a resulting environmental and/or social catastrophe is to reduce the average hours of work for the bulk of the working population and increase employment opportunities for the unemployed and the underemployed.

Dean Baker has proposed government subsidies for shorter hours and vacation pay as part of the economic stimulus plan.
The government could give employers an incentive to provide paid time off now by giving tax breaks to cover all or most of the paid time off…

This is a neat form of stimulus because it directly gives employers an incentive to hire more workers, as can be easily shown…

If employers of 50 million workers took up the deal, then this 6 percent would translate into 3 million jobs…

There would undoubtedly be technical challenges to implementing a scheme such as that outlined by Baker. But there are challenges to implementing any stimulus package or policy reform.


TheTrucker said...

I am convinced that shorter hours are the proper medicine for our current economy. And I am also convinced that the separation of health care from employment is not the golden fleece that will make the issue of long hours disappear. But the politics will ever trump the economics, and health care is in my opinion the key that will unleash the shorter hours genie.

I say this because the iron is hot right here and right now. The point that without the "legacy cost" of retired inion members GM would not be in such dire straights is a very easily understood position to take for any politician. And that is unfortunately how things happen and how things get done. It is a very small step from the legacy problem to lowering the Medicare eligibility to 55 and thereby relieving a large chunk of that legacy cost. It isn't much but it opens the discussions and debates and provides a lot of those three word sound bites that the politicians love so much.

Being right about the economics doesn't do a lot of good unless you can find ways to move forward politically. And until we can separate health insurance from employers AND unions we will continue to meet maximum resistance to shorter hours. We have been through this many times. The employers do not want to give up that major hook in the pants they have on the employees because it keeps the employees working extras hours for free.

We seem to be addressing the problem on the bottom (the kids) and now we need to do it on the top (retired people) in order to make the point and prove the efficacy. Can the full deal meal be far behind?

Shag from Brookline said...

Maybe shorter hours will provide many with time to study economics. On the other hand, ...."