Wednesday, October 22, 2014
   
Text Size

Search our Site or Google

Where is the Four-Day Work Week?

Articles & Blogs - Canadian Commentary

User Rating: / 25
PoorBest 

There are no shortage of universal truths in economics for people, like myself, who like to study “the big picture”. As I see discussions of current unemployment, and speculation about future employment prospects, it is clear that no other commentators understand the long-term dynamics of employment.


Let me begin with one of the “universal truths” to which I referred. Since the dawn of the Industrial Revolution, more than 200 years ago, new technological advances have eliminated jobs faster than they create new employment opportunities. There are no exceptions. Indeed, the most commonly heard attribute of any new invention is that it is a “labour-saving device”.


Given this basic, mathematical truth, it is a matter of simple arithmetic that the only way in which economies can maintain full-employment over time is through regular reductions in the length of the work week. To illustrate this, it need only be pointed out the original “work week” was roughly seven days a week, twelve hours a day. This amounts to over eighty hours a week – or more than double the current length of the work week.

 

Another “universal truth” in economics is that every time that societies/governments moved toward a shorter work-week, the entire corporate community banded together and 'predicted' that any reduction in the work-week would result in nothing less than economic Armageddon. This ignorance goes all the way back to the early 1800's, a time when workers literally fought for a reduction in the length of the work-day – down to 'only' ten hours a day. This is not especially surprising, since greed is simply a form of stupidity – and the resultant short-sightedness of corporations blinded them to the numerous economic advantages associated with a shorter work week.


It would take many chapters to discuss and describe the numerous ways in which shortening the work week revitalizes an economy, so I will focus on merely one of those attributes: increased productivity. Economics is as much of a “behavioral science” as it is a study of numbers, and it has been a long-established truth that having employees work an excessive number of hours dramatically reduces their productivity.


In modern times, such research is usually confined to the analyses of whether companies are better off in adding workers, or in simply forcing their existing employees to work overtime. An exception to this occurred in Canada during the 1970's and early 1980's. That time is typically described as a period of “stagflation”. However, it also represents the “tipping point” - where technological advances had made it impossible to continue to maintain “full employment” with a forty-hour work week.


Due to the severe economic hardship of those times, the Canadian government instituted mandatory “job-sharing” for many classes of government employees. Thus, at a time of record inflation, a large percentage of government workers saw their paycheques substantially reduced, due to the government forcing them to work less hours.

 

 


Given these factors, it would be only natural to assume that employee morale would be poor – a consequence of falling wages in conjunction with soaring prices. To the surprise of researchers, they discovered that productivity increased among these discouraged workers – simply from reducing their total number of hours-worked below 40 hours per week.


Skipping ahead a generation, “job-sharing” is now a permanent reality for many corporations. However, the reason why companies engage in such behavior today is not to respond to some current employment “crisis” (despite the fact that unemployment is now in a state of permanent crisis). Instead employers are widely engaging in job-sharing because introducing this added flexibility into their work environment has made employees happier and more productive.

 

The most important point to be made here is that there is nothing “magical” or “optimal” about the five-day, forty-hour work week (just as there was nothing optimal about the seven-day, 84-hour work week; or the six-day, sixty-hour work week of previous eras). This raises the obvious question: if working less means working better, and with “structural employment” worse than at any time in history, why are we still maintaining this totally archaic work week?


The answer is very simple: governments and employers have formed an unholy alliance to permanently maintain high unemployment – since in the eyes of both this “solves” many of their perceived problems.


For governments and employers alike, the 1970's were a real eye-opener – in that Western economies simultaneously began a “wage/price spiral” certainly worse than anything in the modern era (a consequence of the first big spike in crude oil prices). For those unfamiliar with the term, a wage/price spiral describes a business cycle where prices rise rapidly, and as a result, workers have the audacity to demand wage-increases high enough to offset those higher prices – so they don't get poorer by the day.


Because reckless, greedy Western bankers insist on always creating too much debt and too much new “money”, high-inflation is also a permanent reality of our modern economy. What governments and employers discovered, alike, during the worst of the stagflation era is that high unemployment blunts the wage/price spiral – because workers become so concerned about keeping their jobs that they accept soaring inflation (and falling, real wages) without demanding compensatory wage increases.


This caused former Bank of Canada Governor Gerald Bouey to (foolishly) blurt-out the new “game plan” of Western governments (and corporations) in the 1980's: “we are fighting inflation with high unemployment.” As truly one of the most evil doctrines of my lifetime, those words have stuck with me to this day.


Since high-unemployment is the one factor which is most likely to get politicians thrown out of office, lying about unemployment has also become a way of life for Western governments. To engage in such lies, all they have had to do is refuse to change the definition of unemployment.


In previous eras, when “full employment” was not only possible, but considered a basic human right, anyone who was unemployed, but not actively looking for work was excluded from the official “unemployment” statistic. At that time, this was a perfectly reasonable definition – since anyone/everyone who steadily looked for a job would find one. However, in our current era where millions of people will never find employment – no matter how many weeks, or months, or years that they look, it can obviously not be justified to refuse to count someone as “unemployed” simply because they won't look for jobs which don't exist.


In the real world, there is somewhere in the vicinity of 50 million people (in Western industrialized societies alone) who are no longer allowed to work by our governments – simply because it makes life easier for politicians, bankers, and corporations. Clearly, these actors have all earned our hatred for their despicable roles in steadily lowering the standard of living for over 80% of the people in our societies.


However, the people I personally condemn – even more than those other selfish, amoral individuals – are the so-called “economists” who remain in such a state of total ignorance (in their ivory towers, far removed from the real world) that they have all been oblivious to these developments (or else intentionally covering up for the despicable behavior or politicians/bankers/corporations).


Frankly, I find it hard to believe that most of these “economists” have ever even studied economics – given their total inability to understand the most-obvious of trends, and the simplest of principals. The most recent example of their complete detachment from the real world was the fact that almost all of these “experts” were “surprised” at the bursting of the U.S. housing bubble (the largest asset-bubble in history) and the subsequent collapse of the U.S. economy – the obvious and inevitable consequence of the bursting of that bubble.


Proving that these ivory-tower elites have still learned nothing, they remain in a state of near-total ignorance. Totally absurd government statistics are still accepted as the “gospel” - despite the continual efforts of myself, and a small army of non-mainstream commentators, who attempt to pierce the thick veil of ignorance which continues to blind these “experts”.


Another area of mass-deceit, where the (so-called) economists remain oblivious to reality is regarding the myth of “rising productivity”. These economic charlatans are continually crowing about “rising productivity” without the slightest understanding of what they are really describing: falling, real wages.


A simple numerical example will illustrate this point. An employee making $10/hour produces a given level of output. Contrary to economic mythology, such employees do not tend to work harder and harder over time. Thus, in the real world “rising productivity” is represented by only two possible changes. Either the employer cuts the wages of workers, or introduces new technology – which eliminates jobs, thus allowing less workers to produce the same amount of goods (and illustrating my point about new technology being a job-killer).


In the first example, falling wages are obvious: the employer cuts wages from $10/hour to $9/hour – equal to an 11% “rise in productivity”, or from $10/hour to $5/hour – a 100% “rise in productivity”. In the second example, falling wages are indirect. When the new technology throws more people out of work, this rising unemployment depresses all wages. If this were not true, then when new technology increased “productivity” worker wages would be automatically increased – since they are now generating more profit per worker than before. Can anyone name even one employer who automatically raises wages whenever it introduces new “labour-saving” technology?


More than two hundred years of economic history and evolution provides conclusive evidence of how and why we are currently experiencing the worst structural employment in history – as well as the only solution known to our society: shortening the work week.


Unless and until this inevitable evolution is allowed to continue, it will never be possible to bring real unemployment below 10% again (more than double the unemployment rate of an economy with full employment). Obviously, since the current lies perfectly serve the interests of politicians, bankers, and corporations these entities will never admit the problem – since admission would require instant action.


Thus, it is up to those outside of the current power structure to first educate our societies about what is being done to them and, second, to mobilize public opinion to the degree necessary to force change. In our ignorance, we have already abandoned an entire generation to the relentless, insidious oppression of our “masters”. It is time for this social atrocity to end.

Trackback(0)
Comments (2)Add Comment
Jeff Nielson
...
written by Jeff Nielson, November 17, 2009
Hi JsJ. Yes Canadian employers play that game too - although the monetary incentive isn't as great. It would be a simple thing for governments to close that loophole and require "semi-fulltime" workers to get the same benefits.
JsJ
...
written by JsJ, November 16, 2009
In the U.S., companies like to hire people at less than 32 hours per week -- your four-day, eight-hour week -- because at less than 32 hours they are not required to provide health benefits. If the new hire is a spouse, and can get benefits from their spouse's employer, then that's fine, but if both spouses are not "fully-employed" so to speak, then that family may need to purchase health insurance themselves. Needless to say, the subsidy of an employer-provided health plan is a powerful incentive to stay at your job and full-time at your job whether or not you are happy or productive.

Restructuring our health costs down here, South of the border, would go a long way towards allowing us to shorten our work weeks.

Write comment
You must be logged in to post a comment. Please register if you do not have an account yet.

busy

Latest Commentary

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12

Latest Comments

Disclaimer:

BullionBullsCanada.com is not a registered investment advisor - Stock information is for educational purposes ONLY. Bullion Bulls Canada does not make "buy" or "sell" recommendations for any company. Rather, we seek to find and identify Canadian companies who we see as having good growth potential. It is up to individual investors to do their own "due diligence" or to consult with their financial advisor - to determine whether any particular company is a suitable investment for themselves.

Login Form