Rethinking the Work Week

With an unemployment rate of 25.1%, Spanish protesters have taken to the street to voice their grievances. (Albert Gea//Reuters)

Unemployment plagues today’s nations. In Europe, unemployment rate was 11.2% in June. Within those European unemployment statistics, workers under 25 face an unemployment rate of 22.4%. (As comparison, national unemployment in the US is 8.1%.)

Currently, most employment structures, the American system included, do little to “share” work. Instead, productivity growth is decoupled from hours worked, and employers pay benefits per person rather than per hour, resulting in higher unemployment.

In order to ameliorate unemployment, improve individual well-being and protect the environment, governments around the world need to restructure our collective employment regime. By encouraging the development of a new employment model, they can ensure sustainable prosperity while creating quality green jobs for all.

Currently, most employment structures, like the American system, do little to “share” work. Instead, productivity growth is decoupled from hours worked, and employers pay benefits per person rather than per hour. This model results in a society of higher unemployment and larger incomes for the over-employed because during economic downturns, employees are forced out of the labor market so employers don’t have to cover their benefits. As a result, the remaining employees are worked harder.

This employment system is no longer sustainable as people work 40 hour and 50 hour work weeks and struggle to get by.  This model must be reformed.

Shared work can reduce unemployment by allowing people to work part-time, as full time workers are required to work fewer hours. According to a report released by the European Green Foundation last year, transitioning to a work-week of fewer “working” hours will boost job creation. In France, a shift to a 35-hour working week created 350,000 jobs between 1998 and 2002. Additionally, no European country has managed to achieve an unemployment rate below 6% without having at least 25% of its workforce employed part-time, and the average working hours not exceed 21 hours per week.

In fact, Europe has been at the forefront of experimenting with different work-week models and can provide insight into how models influence development and employment.

Despite income disparity between European nations and differences in culture and history, Europeans share a similar full-time working week of around 39 to 43 hours. The difference in hours is due to the three dominant models of European employment. In Scandinavian countries, Austria, Netherlands and the UK, work is shared on the basis of three-quarters of the population working full time and one-quarter working part-time. Sweden, for example, employs this model and has the longest average part-time hours in Europe – with 23.5 hours, or nearly 3 days of part-time work per week. Another more traditional model employed by countries in Eastern and Southern Europe, does not commonly use part-time employment due to lagging economies and the legacy of recession and the sovereign debt crisis. The third model rejects widespread part-time work, and therefore bears higher costs of unemployment. Yet, countries like France, Belgium and Finland, which use this model, have managed to kept productivity high.

If a part-time work model is rejected and government seeks to reduce unemployment, the only solution to share employment is by reducing full-time working hours.

It is vital that work hours and productivity be understood as distinct from one another. Nations with the most work hours are not necessarily the most productive.

It is vital that work hours and productivity be understood as distinct from one another. Nations with the most work hours are not necessarily the most productive. Therefore, decreasing work hours doesn’t mean that production will be diminished.

Furthermore, modifying employment structure will benefit society by promoting gender equality, as women are more able to enter the work force to fill part-time positions. Sharing of work hours will also help to erode barriers by distributing work between new employees and older generations, and insiders and outsiders.

Reforming the employment structure will additionally benefit the environment. A recent study revealed that reducing working hours by 10% could diminish individual carbon footprints by 15% due to decreased consumption of goods and energy. Also, the US emits 50 to 70% more greenhouse gas emissions than European nations, and the US has a longer work-week.

In order for successful transformation of the employment structure and therefore society, individuals and communities will need to cooperate in negotiations of new employment models. The systems must be tested in order to understand how the flow of capital will be affected, and to realize all the benefits of a modified working regime.

Though the concept of shared working hours seems radical at first, in the current global economy of low growth and high productivity and a surging world population, the decoupling of productivity and hours worked must be addressed by political and business leaders alike. By implementing systemic change, more individuals will be able to work, instead of some working more and others less— helping people make ends meet, encouraging healthier lifestyles and ensuring a sustainable future.

Antonia Sohns | Sustainable Prosperity | October 02, 2012

Homepage image: In the U.S. and around the world, the employment structure can exacerbate unemployment in times of financial distress. (yadontunderstand)

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