As we approach the August bank holiday and a three-day weekend, it is worth reassessing the amount of time we devote to work. What if all weekends could last for three or even four days? What if the majority of the week could be given over to activities other than work? What if most of our time could be devoted to non-work activities of our own choosing? To even pose these questions is to invite the criticism of Utopian thinking. While a fine idea in principle, working fewer hours is not feasible in practice. Indeed, its achievement would come at the expense of lower consumption and increased economic hardship.
For some advocates of the work ethic, the route to health and happiness lies with the perpetuation of work, not with its reduction. Work makes us healthier and happier. Such pro-work ideology is used to legitimate welfare reforms that seek to coerce the non-employed into work, whatever its rates of pay and qualitative features. It also offers an ideological barrier to the case for spending less time at work. Working less is presented as a threat to our health and happiness, not a means to improve it.
Yet, the idea of working less is not only feasible, it is also the basis for a better standard of life. It is a mark of how we have come to accept work and its dominant influence in our lives that we do not grasp this idea more readily.
By working most of the time, we also lose time with family and friends. And more than this we lose the ability to be and do things that make life valuable and worth living. Our lives are often too much tied up in the work we do that we have little time and energy to find alternative ways of living – in short, our capacity to realise our talents and potential is curtailed by the work we do. Work does not set us free, rather it hems us in and makes it more difficult to realise ourselves.
All this speaks to the need to work less. We should challenge the work ethic and promote alternative ways of living that are less work centred. And, if this reduction of time spent at work is focused on eliminating drudge work then we can also better realise the internal benefits of work itself. Working less may be a means not only to work better but also to enjoy life more.
Barriers to less work
Technological progress has advanced continuously over the past century, pushing up productivity. But not all the gains in productivity have fed through to shorter work hours. At least in modern times, these gains have been used to increase the returns of the owners of capital, often at the cost of flatlining pay for workers.
The lack of progress in reducing time spent at work in modern capitalist economies reflects instead the influence of ideology as well as of power. On the one hand, the effects of consumerism have created powerful forces in favour of longer working hours. Workers are constantly persuaded to buy more and in turn are drawn into working more, to keep up with the latest fad or fashion and to stay ahead of their peers.
On the other hand, the weakened power of labour relative to capital has created an environment that has suited the extension of work time. The recent expose of work practices at Amazon speaks to the power of capital in imposing poor working conditions, including excessive work hours, on workers. The effects of rising inequality has also fed a long work hours culture by increasing the economic necessity to work more.
David Graeber makes the provocative claim that technology has advanced at the same time as what he calls “bullshit” or pointless jobs have multiplied. This is why we have not realised Keynes' prediction that we’d all be working 15-hour weeks in the 21st century, as a result of technological progress.
Instead, we are living in a society where work gets created that is of no social value. The reason for this, according to Graeber, is the need of the ruling class to keep workers in work. While technology with the potential to reduce work time exists, the political challenge of a working population with time on its hands makes the ruling class unwilling to realise this potential. Working less, while feasible and desirable, is blocked by political factors.
Working for change
The costs of long work hours, as mentioned above, are poorer health and lower well-being for workers. But for employers too there are costs in terms of lower productivity and lower profitability. Yet these costs seem to go unnoticed despite evidence pointing to their existence. Here again politics may explain why shorter work time has not been embraced by many employers.
Experiments in shorter working exist, to be sure. Uniqlo, a Japanese clothing retailer, is to allow its employees to work a four day week. This has been widely reported in a positive way. Workers will benefit from a better work-life balance, while the firm will reap the benefits of lower labour costs due to lower turnover costs.
Yet, on closer inspection, the new scheme to be introduced by Uniqlo has its downsides. In return for a four-day working week, workers will be expected to work ten-hour shifts during the days they work (a 40-hour working week will be squeezed into four days).
This is not only an extension to the normal length of the working day; it also puts at risk the potential rewards of working four days in the week. Workers may be so exhausted after working a four-day work week they need a full day to recover from their previous exertions. In this case, their quality of work and life may not be enhanced at all; indeed it may be diminished, if they suffer the ill-effects of overwork.
Ironically, schemes such as the one to be introduced by Uniqlo illustrate the obstacles that remain in achieving less work. Only a reduction in the working week to 30 hours or less can be seen as genuine progress in the achievement of shorter work time.
For us to reach – and enjoy – a three or ideally a four-day weekend, we need to reimagine society in ways that subvert the prevailing work ethic. We need to embrace the idea of working less as a means to a life well lived. We need to reject the way of living that sees work as the be all and end all of life.
So enjoy the bank holiday while you can. See it as a reminder of a life that could be – a life that we should seek to achieve, by resolving to overcome the barriers, economic as well as ideological and political, to working less.
This article was originally published at the Conversation: see here
The latest research, co-commissioned by Public Health England, looked at the health effects of prolonged periods of sitting in offices. It found that workers who sit at their desks for long periods are at increased risk of various physical illnesses, including cardiovascular disease, diabetes, and certain types of cancer. Sitting down for long hours can potentially lead to premature death.
The solution? Get a standing desk and get out of your chair more by working standing up and taking short active breaks. The research recommends at least two to four hours a day of standing-based activity and highlights the health costs of modern office work and the need to resolve them. The findings go as far as suggesting the need for a “revolution” in the way that offices are designed and organised.
Novelty value
Stories such as these catch the eye for their novelty, but there are some far broader questions about work-related health that they fail to address. Beyond the question of office ergonomics, there are some other crucial factors that influence our health at work. Though their novelty value is far less, they are likely to persist, even with the wider availability of stand-up desks and active breaks.
Workers who are given a stand-up desk won’t experience better health outcomes if they are also exposed to a heavy workload, intensive and long work hours, restricted work duties, and job insecurity. Indeed, in the face of these conditions, workers may view the encouragement of stand-up working as some kind of sop from managers – a hollow gesture that fails to address the real problems they face at work.
Work-related mental ill-health – including stress, depression and anxiety – remains a significant problem in UK workplaces. It is induced not just by the pressure of high workloads and high work intensity but also by the lack of control over work. Workers who lack autonomy at work find it more stressful. They also face greater physical ill-health and are more likely to die early.
The problems of limited autonomy and its negative impacts on health illustrate the wider changes needed in the workplace – beyond redesigning office furniture and extending active stand-up breaks. It indicates the need for broader changes in the governance and structure of organisations. Workers need to have greater say over how they work and when. This would improve both their physical and mental health.
Democratising the workplace
Standing up at work, in short, cannot resolve the ill-health effects of low autonomy work. Nor can it make workers appreciate and enjoy work more, where it is imposed on them, without their direct input.
If they are to improve their health as well as well-being, workers ultimately need to stand up for their rights at work. They need to demand not just stand-up desks and more frequent active breaks but also more control over their work. They need to push for, and secure, access to more democratic forms of workplace governance, in which their voice is heard more loudly and more frequently acted upon.
A more democratic workplace would have a flatter management structure and would allow greater worker participation in decision-making. In practice, work would be managed cooperatively and would be arranged in a way that gives workers the freedom to decide the scope and performance of the tasks they are allocated. Such an environment would not only be more pleasant to work in but would also help to support better health outcomes. Indeed evidence supports the health-improving effects of a more democratic work environment.
Employers, of course, are much more likely to change the type of desks available in offices than change the management structure in organisations. But if they are serious about raising employee health and well-being they need to take these more radical steps.
“We need an environment where people feel much more liberated to do desk standing”, it has been argued. In fact, what we need is an environment in which workers have the autonomy to take genuine decisions over the way they work. In other words, we need workplaces that value workers not just as instruments of production but also as real human beings with rights and needs of their own.
Only by creating more democratic structures at work can the health and well-being of workers be significantly and decisively improved.
***The above blog post was originally published at the Conversation: see here
The state of the economy has already proven to be a key battleground in the build up to the UK election. The problem is that the country’s economic performance can be spun in different ways. Positive signs of recovery can mask real underlying weaknesses that current policy is failing to address. And the rhetoric of recovery can prevent us from identifying different policies that are urgently needed to secure a more sustainable and fairer economy.
All the main political parties in the UK have bought into the idea of continued austerity. A narrative has been carefully cultivated by the coalition government – and subsequently supported by Labour – that the deficit must be quickly reduced and the books balanced. This narrative has crowded out alternative policy discussion around the merits and necessity of continued government spending in the UK.
The electorate is ultimately presented with a confusing and confused picture of the past, present, and future state of the UK economy. They are also presented with a limited and partial range of policy options – ultimately, continued austerity is the only option on the table. The need to present real alternatives to the pro-austerity agenda is more important now than ever before. But such alternatives remain sorely lacking at present.
So how has the UK economy been doing and how has it impacted the lives and living standards of the electorate? Here, is a whistlestop review of the coalition government’s economic record.
1. The recovery
Starting with the recovery, national income (GDP) is back to where it was before the 2007-08 crisis. But the recovery in GDP has been the slowest on record.
This is partly the product of policy mistakes. The commitment to extreme austerity in the early years of its term of office took demand out of the economy just at a time when a demand injection from the government was urgently needed. Targeting the deficit ultimately delayed the recovery in the economy. GDP has returned to pre-crisis levels, but growth was stunted by austerity.Office for National Statistics, CC BY
Ironically, it was by not sticking to his targets for deficit reduction that George Osborne has helped to create more favourable conditions for recovery.
2. Living standards
But the recovery has done a poor job at raising living standards. The recent trumpeting of living standards returning to 2010 levels does not change the fact that the past five years have coincided with real hardship for many. The latest ONS figures show that household disposable incomes at the end of 2014 were up 0.2% on 2010’s numbers. This is an extremely modest increase and reflects the effects of lower inflation rather than higher money wages.
Other evidence suggests that the real wages of the typical (median) worker have declined by almost 10% since 2008 and real incomes for families of working age by nearly the same. This is a dismal record. It shows how talk of recovery has a hollow ring for many millions of people in the UK. This must be one of the first recoveries in living memory where hardship has multiplied in society.
3. Growth
The drivers of growth have also been unbalanced in nature. Recovery has been secured for the most part by the increase in household consumption. The same old model of consumer-led growth has restored the level of GDP. But, given the decline in real wages, consumption has increased only because of households spending beyond their means and borrowing more. This is hardly a recipe for sustainable recovery. Indeed, the latest OBR forecasts expect the gross household debt to income ratio to rise back to pre-crisis levels by 2019. We could be set to repeat the crisis all over again.
Other parts of the economy that might have contributed to growth have been constrained. First, austerity and the rhetoric about reducing the deficit have ruled out expansionary fiscal policy. Cuts in government spending have often been presented as eliminating waste and unnecessary bureaucracy. But in practice they have included retrenchment in important public services as well as in infrastructure projects that meet vital human needs.
Growth has also been restricted by corporations holding back from investing in areas that would make them more productive. Lower real wages has increased the incentive to hire more labour as opposed to investing in new capital. The demands of shareholders for higher short-term profits have also tended to divert internal funds away from investment and towards higher dividend payments. The trade deficit has widened. Higher consumption, as in the past, has fed through to higher imports. Although the focus has been on the budget deficit, arguably the bigger problem facing the UK economy is the trade deficit which acts as a major constraint on present and future growth prospects.
When the public and corporate sectors are net savers and the country is a net importer, the government must spend and run a deficit or the economy will shrink. Rapid deficit reduction therefore requires a corresponding drop in net imports and increases in private spending relative to savings if the economy is not to falter. This basic truth has been missed under the coalition.
At present the main reason why the economy is growing is because of consumers spending beyond their means. The likelihood of growth being sustained very much depends on a recovery in real wages. The deeper issue for the UK is to find a more sustainable route to prosperity that does not rely – again – on debt-fuelled consumption growth.
4. Employment
The employment situation in the UK presents a mixed picture. On the one hand, the employment rate has reached a record level. Unemployment has also fallen to pre-crisis levels. On the other hand, employment has tended to be created in low paid sectors, including an increase in zero-hours contracts and self-employment.
Plus, the growth in self-employment seems to reflect the lack of alternative well-paid employment opportunities rather than a new spirit of entrepreneurship. Generally, workers have had to accept lower real wages in return for higher employment.
5. Productivity
Another bleak spot is productivity. Historically, productivity in the UK has lagged behind other nations. But this gap has tended to become more pronounced in recent years. This reflects in part weak investment as well as changes in the composition of jobs in the economy (particularly the rise of low productivity jobs in the service sector). The persistence of low productivity means that real wages are unlikely to rise any time soon – a fact that is likely to make the recovery even more uncertain.
6. Inflation
The rate of inflation is now at 0%. This has been heralded as “good news” by the Coalition government. Yet, in truth, it marks a sign of policy failure.
The inflation target is 2% – not 0% – and for good reason. The target of 2% allows room for price rises that help to stimulate demand and if below-target inflation turns into prolonged deflation then demand could be curtailed through a combination of delayed consumer spending and a rise in the real value of debt. Low inflation also provides an excuse for firms not to pay higher wages and in that sense it may prevent the required increase in real wages from materialising.
The dismal state of the UK economy exists and persists because of current policies. Five years of austerity, in short, have resulted in an economy that is just as unbalanced and unsustainable as immediately prior to the 2007-08 crisis.
Promoting real alternatives
The problems that beset the UK economy, in truth, are deep-rooted. They reflect the broader political economy of the UK – the dominance of financial interests (particularly the City of London), the relative weakness of industry and organised labour, and the hostility of the main political parties to any kind of interventionist policy agenda based on government spending. Yet, these problems need to be tackled if the UK is to achieve prosperity in ways that benefit all in society.
For a start, there needs to be a clear recognition that the state has an active and positive role to play in the economy not just as a provider of first aid when the economy is in a slump but also as a driver of long-term prosperity via its capacity to tackle deep-seated weaknesses in the economy – from low investment to high inequality. The issue of creating an active state that challenges the power of finance and instead looks to promote a more inclusive and fairer route to prosperity remains more urgent now than ever before.
Unfortunately, none of the main political parties in the UK are offering anything other than continued austerity. But the government’s finances are not like those of a household. The budget deficit has propped up the UK economy – without it, the UK would still be mired in recession.
The state’s role
The state has a positive role to play in creating and sustaining an economy that meets the needs of all, not just an elite few. The state can also help tackle the so-called “productivity puzzle”, in part by addressing the entrenched power of shareholders that has blocked long-term investment.
The general election ideally should be a time to debate real alternatives to the way the economy is currently governed. Sadly, it mostly offers more stale debate over the amount of austerity that the UK economy (allegedly) needs to bear. The thirst for alternatives persists nonetheless – including the growth in support for the Green party and the positive reception to the SNP’s own anti-austerity agenda.
But real change that promotes real alternatives requires a radical change in the terms and content of debate about the state of the UK economy. Given the present situation, it may be some years before we obtain the radical change that is needed.
Two things stand out about the economic recovery in Britain. One is the sluggish growth in real wages. The other is the sluggish growth in productivity.
That the two phenomena have coincided is no accident. Low real wages, by eroding the incentive to work and the morale of workers, have fed low productivity. At least we can cling to the thought that the solution to this might offer a genuine recovery with sturdy roots.
Despite falling unemployment levels, real wages have registered a continued period of decline never before witnessed in the past half-century. Recent headlines about a reversal in this trend are due to falling price inflation – partly a reflection of weak domestic and world demand – rather than to accelerating pay settlements.
At the same time, rises in output have been matched by rises in hours worked; workers in Britain have not been producing any more per hour. It seems clear in this scenario that the key to resolving the productivity puzzle is to increase real wages. A pay rise for hard-pressed British workers would mark a big step forward in raising productivity. It would also help to sustain a recovery by underpinning higher levels of demand. In short, a high wage economy is a precondition for a return to sustainable prosperity.
On the shop floor
Some others have linked lower real wages and lower productivity. One argument is that lower real wages have encouraged firms to hire more labour which has ultimately eroded productivity. This argument presupposes certain things. For example, it implies fairly rapid adjustment in capital-labour ratios – in other words, firms investing in people rather than building up cash on their balance sheet or buying new equipment. But such adjustment is not necessarily feasible.
For the manufacturing sector, where large investments have been made in plant and machinery, hiring cheaper labour is far from straightforward. Firms cannot simply dispose of capital that they have invested in and switch to labour intensive methods of production without facing significant losses. For the service sector, there may be scope for hiring more labour if the relative cost falls, but it is a fallacy of supply-side economics to expect that firms will hire more labour unless aggregate demand also increases. Any appeal to firms hiring more labour must take this into account.
Accounts of the productivity puzzle that focus on changing those capital-labour ratios tend to omit both the relative fixity of capital and the importance of demand side forces in influencing the hiring of labour. Therefore, real wages may fall by a significant amount, but this will not prompt firms to hire more labour unless and until aggregate demand also rises.
Motivation
The lack of any rise in real wages despite falling unemployment levels suggests that there are other causes of the productivity puzzle in the UK. One such cause is likely to be linked to the effects of lower real wages on recorded productivity.
What I want to suggest is that the erosion of real wages has affected adversely the motivation and morale of workers. By allowing real wages to be eroded firms have effectively made their workforce less productive. The productivity puzzle is in part the creation of employers’ own inaction to address the fall in real wages.
This line of argument is not a new one. It can be found in the writings of Adam Smith. For Smith, real wages and productivity were positively related. He wrote in Wealth of Nations:
Where wages are high, we shall always find the workmen more active, diligent, and expeditious, than where they are low.
Adam Smith was as much a moral philosopher as he was a political economist and his concern for the plight of the working poor led him to back a high wage economy.
Win-win efficiency
In modern economics, the same argument is captured in the theory of efficiency wages. Here, higher real wages induce greater productivity through more dedication, effort, commitment, and quality.
The point is that it may pay for firms to raise the wages of their workforce. Not only do higher real wages raise productivity but they also induce the demand needed to absorb the extra output created by the rise in productivity. A high wage economy, in short, can benefit both firms and workers.
Referring back to the UK case, lower real wages have made it harder for firms to induce their existing workforce to put in the work required to improve productivity. We can certainly see in survey evidence low levels of morale among UK workers.
The prospect of working more for no additional pay (or even lower pay) has certainly demoralised workers and has created inefficiencies which might have otherwise been avoided. Lower real wages have also held back demand hindering recovery in output. Demand and output have risen because of workers’ borrowing more and running down savings – this is hardly a sustainable route to recovery.
The pay-off to firms of paying workers more is higher productivity that could more than offset the higher wage costs incurred and induce higher demand for the extra output created. But this win-win scenario requires consensus between firms and workers. It is not clear in the present climate – with trade unions relatively weak and firms still in the grip of the shareholder value model – that there is scope to reach any kind of compromise.
The relative weakness of workers is a barrier not just to higher real pay but also to the increase in productivity and ultimately sustainable prosperity. The grim truth is that we face low productivity and low real wages reinforcing one another in a vicious cycle that ultimately helps neither firms nor workers.
This article was originally published at the Conversation, see here
*** This article originally appeared at the Conversation. I want to reiterate here that the article does not represent a direct attack on the work of Jean Tirole. Rather, as stated below, it reflects some broader concerns with the way in which the academic economics profession is currently structured. It reflects in particular a concern with the continued exclusion of alternative perspectives within academic economics. Academic economics continues to evolve, but not in a way that allows for consideration of ideas from heterodox economics. We are all poorer, academic economists included, for this. Now to the article...
It’s that time of year again – when academic economics, thanks to the Nobel Prize announcements, is thrust into the public gaze.
That the economics Nobel is mistitled and has quite a different
status to the other Nobel Prizes is neither here nor there (the proper
and rather unwieldy title of the economics Nobel is the “Sveriges
Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”). The
award of the 2014 prize, in the eyes of the academic economics
profession and the wider public, still confers great kudos and status.
This year there is just one winner, Jean Tirole.
The French economist has earned his reputation and the prize for his
work on industrial organisation, which uses ideas from contract theory
as well as game theory to further research in this branch of economics.
His work is technical and based around the development of formal models.
Building from these models, Tirole has tackled different policy
questions including those relating to the regulation of large firms or
monopolists. The entry into the policy realm has come about despite –
rather than because of – the theory and method to which Tirole adheres, a
theory and method which is highly abstract and captures reality largely
as an afterthought.
Here I want to make two broad reflections. These relate to the
general state of academic economics and the context in which the
economics Nobel is awarded on a yearly basis. The below comments do not
intend to criticise directly the award of this year’s prize to Jean
Tirole. Rather I hope to provoke a wider debate on academic economics
that the economics Nobel seeks to honour.
An intellectual and ideological rut
Academic economics is still stuck in an intellectual and ideological
rut. Despite the global financial crisis – the worst in a lifetime –
academic economists are more likely to win awards and the respect of
their peers by producing abstruse models than by tackling and resolving
real-world problems.
The economics Nobel awards advances in economic analysis – meaning
the development of formal models and the application of particular
mathematical and statistical techniques. In essence, solving puzzles
within economics matters more than dealing with grand societal
challenges.
Thomas Piketty,
who has done more than anyone else in the last year to bring academic
economics to the public attention, had no real prospect of winning the
prize, given his concern with the real-world issue of inequality. The
non-award of the prize to Tony Atkinson
– pioneer of inequality and poverty studies – can also be explained in
the same way. But it should be a cause of concern, not least for members
of the public tuning in to learn who has won the economics Nobel, that
acute economic and social issues are not high on the agenda of academic
economics.
Neoclassical focus
My second reflection is that academic economics is still all of a type – it stands for some variant of neo-classical economics.
Cosmetic differences aside, research in academic economics applies
concepts and methods found in this narrow school of thought.
It has dominated economic thinking since the late 19th century and
has marginalised all challengers. The award of the economics Nobel is,
in fact, an award for conformity to neo-classical economics. Other
schools of economic thought do not get a look in.
And this is in spite of the fact that neo-classical economic thinking
failed to foresee the global financial crisis and advocates the kind of
austerity policies that prevent recovery. It is alternative thinking –
whether from Keynesian, Marxian or ecological economics – that can help
us to understand how to build a fairer and more equal economy.
A prize for thinking differently and building a better economics
would be a great thing, but sadly it is not one that is awarded by the
committee of the economics Nobel. Indeed, given the acute problems that
exist in academic economics, it may even be time to call an end to the
economics Nobel. The world certainly would not be a worse place without
it.
Rejoice. The UK economy is back to where it was
before the crisis. The depression is over and sunny economic uplands lie in the
future. Feel good, damn it, the economy is growing again.
There is a reason why the positive growth
statistics are treated sceptically. That reason relates to the fact that real
incomes have fallen in the UK. Despite the restoration of growth, workers in
the UK have continued to suffer cuts in their real pay. One of the arguments
for growth is that it raises real incomes – in the UK at least, the reverse is proving to be true.
From a growth perspective, the grim facts of the
recovery provide cause for concern. The UK economy has only been able to grow
by workers spending beyond their means. Workers have run down savings and borrowed more to increase
their consumption and this has driven growth. But workers can only
go on behaving like this for so long. Without a rise in real pay, the spending
must come to an end and with it the recovery.
There is no sign yet of net exports recovering to support
consumption and any rises in
business investment will need to continually confound expectations to offset
the further fiscal tightening to come. Again as in the
past the UK economy is relying on workers spending more than they earn to
support the economy. This is a growth model that cannot be sustained and will
ultimately end in disaster.
Even the most ardent backers of the government’s current policy
stance must harbour some concerns about the prospects for growth in the
economy. Lower real wages may help firms keep a lid on their costs but from the
perspective of raising demand on a sustainable basis they place restrictions on
the ability of firms to grow output. Demand side barriers will bite in the end
and terminate the recovery.
But beyond growth there are deeper issues here
relating to work and its relation to poverty. Work has long been heralded as
the best form of welfare and the route to economic success. This view – summed
up in the mantra ‘work always
pays’ – has been exposed as a miserable lie. Now it
seems that work for many is no
escape from poverty. Working hard for a living often
means struggling to keep one’s head above water.
Evidence shows that in-work poverty is on the rise in the UK.
Among working age adults in low income households, the number in working families has
been growing and is now greater than the number in workless families. It used
to be that
worklessness was the prime determinant of poverty. Now it is more likely to be low
waged work.
How did we get into this situation? The
underlying causes are complex and multifaceted. They include the decline of
unions, the deregulation of the labour market, an inadequate training system and the rise of
the service sector at the expense of manufacturing. The UK has lacked the
necessary modernising forces that would have otherwise led it towards a high
wage economy. Instead, it has evolved an institutional structure that has
favoured and entrenched low wages.
What can be done? In the short term, policies to
raise real wages in the UK would help not only to sustain the recovery if that
is the concern but also to address the problem of in-work poverty. The national
minimum wage, although a welcome development, has not managed to address the
problem of low pay and this is where calls for a living wage come in. Raising
the minimum wage to the level of the living wage would be a bold but
economically sensible step to take. Critics may say that this will lead to
unemployment. Yet evidence shows that minimum wage hikes have not had
adverse employment effects. Indeed, their effect has been to
increase productivity via higher levels of worker morale and to reduce welfare
spending.
Longer-term, the UK needs to break its reliance
on a low wage growth model. For this, it needs a new industrial strategy that
focuses on building things, rather than on making money. It needs to invest in
new industries via the help of the State. Challenging vested interests particularly
in the world of finance and creating a model of sustainable prosperity based
not on endless growth but on the promotion of human flourishing remain the
ultimate goals. Whether these goals are achievable under current conditions
remains a moot point. Yet they are goals that we need to keep in our sights and
agitate for.
In the end, the UK cannot afford to pay workers
less. Driving real wages down is a recipe for economic stagnation and human
misery. For all our sakes, we should seek a rise in real wages.
In a world of iPhones and drones, people are right to wonder why they
are still working so hard. The past century saw huge technological
advances and yet there hasn’t been a corresponding increase in leisure
time: people are working as hard as ever.
The Easter break lasts for four days; couldn’t every weekend be like this?
Proponents of shorter work time have received two pieces of goods news recently. One is the announcement of a new law in France
to prevent employees being required to read work emails out of office
hours. The other is the decision in Sweden to experiment with a six-hour work day for some public sector workers.
These two proposals go against the grain in several respects. The
French legislation challenges the prerogative of employers to require
workers to be on call when not at work – it recognises that modern
technology such as iPhones has extended work time, without additional
pay, and seeks to protect and promote the “free time” of workers. The
Swedish experiment challenges the norm of a 9-5 work day – it recognises
the potential economic and social value of a shorter work day and is
consistent with a broader movement to promote leisure time as a means to
a higher standard of life.
But the two proposals are also relatively limited in scope. The
French law only says that workers should not have to check their work
emails after 6pm. There is a concern that workers could still feel
pressurised to read emails out-of-hours and there is a question mark
over whether the law will be enforceable in practice.
The legislation also only covers a section of white collar workers,
leaving the rest of the workforce unprotected. The Swedish experiment is
limited only to public sector workers. There is no requirement on the
private sector to experiment with shorter work time – the quest to
deliver positive returns to shareholders is likely to mean that most
private firms will continue with normal patterns of work time.
Experiments in shorter work time, however, have proved successful,
suggesting that the private sector might benefit from their
implementation. WK Kellog – of cereals fame – famously improved
productivity at his plant by operating a six-hour work day.
The economic benefits from shorter work time stem from workers being
more refreshed and focused at work. Six productive hours can yield the
same output as a full eight-hour work day.
Evidence shows that longer work hours make us less productive.
The example of the Netherlands shows how shorter work time can be
achieved without a reduction in productivity and in living standards.
Longer work hours are also associated with poor health and higher mortality rates – we may be risking our lives by working longer.
As I have written before, the case for working less
is ultimately about promoting a higher quality of life including a
higher quality of work. It is about giving us more time to realise our
creative potential in all kinds of activities; it is about achieving a
life that uplifts us, rather than leaves us exhausted and frustrated.
But, given the benefits on offer, why are we not working less? Here are five reasons:
Employer power: The decline of unions coupled with a
more flexible labour market (meaning less job security) have granted
employers more power to maintain work hours that suit their own economic
interests.
Consumerism: Workers are swayed by mass advertising
and sophisticated marketing to demand more goods and services which in
turn requires that they work more.
Inequality: Workers are more likely to enter into
competitive forms of consumption and to feel more pressure to work
longer where levels of inequality are high. Evidence shows that
countries with higher inequality tend to have longer work hours.
Household debt: The build-up of household debt, especially in the US and the UK, has put added pressure on workers to work longer.
Technology: Gadgets such as iPhones and laptops have meant that workers can be at work even when commuting to work or at home.
Taken together, these points indicate that legislation to reduce work
time is essential.
Employers won’t voluntarily reduce work time, and
workers remain unable or unwilling to opt for shorter work time
themselves. We must gain the collective will to curb the time we spend
at work.
Other countries can learn from the example of France and Sweden. But
given the barriers to shorter work time, wider reforms will be needed if
we are to ever achieve a four or three day working week.
