Saturday, December 6, 2008

"Lunatic Scheme" a Qualified Success

by the Sandwichman

In the wake of Friday's dismal employment report, New York Times editor Adam Cohen is channeling the Sandwichman:
One way to reduce the need for layoffs would be to cut back on hours, spreading the available work among more employees. This was an idea that had considerable currency in the Great Depression. In 1933, the Senate passed a “30 Hour Bill” that would have barred from interstate commerce goods made by workers employed more than 30 hours a week. Its sponsor, Senator Hugo Black of Alabama, said the bill would create six million new jobs. It made no sense, he insisted, for some employees to work 70 hours a week "while others are driven into poverty and misery from unemployment."

But didn't they try this in France and wasn't it a fiasco -- a "lunatic scheme" that brought "seven years of rising unemployment, economic stagnation, and general malaise"?

Well, no. The 35-hour policy was a "qualified success." But you wouldn't have known that from reading the English speaking press. Sandwichpal Anders Hayden tells the story:
France’s 35-hour workweek is one of the boldest progressive reforms in recent years. Drawing on existing survey and economic data, supplemented by interviews with French informants, this article examines the 35-hour week’s evolution and impacts. Although commonly dismissed as economically uncompetitive, the policy package succeeded in avoiding significant labor-cost increases for business. Most 35-hour employees cite quality-of-life improvements despite the fact that wage moderation, greater variability in schedules, and intensification of work negatively impacted some—mostly lower-paid and less-skilled—workers. Taking into account employment gains, the initiative can be considered a qualified success in meeting its main aims.


Eleanor said...

As part of my campaign to do everything I can to help the economy, I am going down to a 24 hour work week. However, I am taking a cut in pay, and the hours I lose will not go to anyone else. On the other hand, I will now have four days a week to spend on living my life; and my employer -- a small nonprofit -- has a better chance of surviving, which means my co-workers may keep their jobs.

I like the idea of a 35 hour work week, though it's still too long, it seems to me. Maybe we can see it as a start. It's a 13% decrease in hours worked, which -- in theory -- would increase employment by 13%, if employers hired new workers rather than paying overtime. Raise overtime to double time, and institute national health, so employers don't have to worry about paying health insurance for new workers.

Daro said...

If you reduce people's hours (and therefore their income) the percentage of income they spend each month goes up. Firing people just cuts off consumption. That reveals one of the big lies of the Republicans: "poor people don't create jobs, rich people do". Poor people spend every dime they have into the economy in as efficient a manner as they can. The rich don't make more factories just because they get tax breaks. There's no extra demand to justify it. All that happens is their gold pile in the Cayman Islands rises a few inches and sales of Lamborghinis does an uptick.