‘In Praise of Idleness’: the shorter working week is so much more than just a business fix

The January blues are a harsh reminder of the value of doing nothing. Bertrand Russell’s wistful paean to the redundancy of work shows that while this radical thinking is not new, it carries fresh challenges for today’s proponents a shorter working week.

By Robert Magowan

A four day week is back on the political menu. It’s about time. Despite global advances in technology and productivity, most countries have seen the overall number of hours worked go up, not down. It’s been over sixty years since most countries introduced a full weekend and we ‘gained a day’.

Among this current renewed chatter, one thinker above all tends to receive the deferent nod to history. John Maynard Keynes predicted in his 1932 Economic Possibilities for our Grandchildren that the march of technology would reduce the necessary working week to just 15 hours – and even that would only be to “satisfy the old Adam in most of us”.

It is worth remembering though, that Keynes was far from alone. Bertrand Russell’s In Praise of Idleness from two years earlier mounts in a few short pages a resolute defence of idleness and an ambitious course for progress: “I think that there is far too much work done in the world, that immense harm is caused by the belief that work is virtuous, and that what needs to be preached in modern industrial countries is quite different to what has always been preached.”

Our attachment to work, Russell argues, stems originally and naturally from the necessity for sustenance that pre-industrial society entailed. Modern technology has severed the need for such an attachment, yet it sustains itself in a sense of morality – “the morality of slaves”. “The conception of duty, speaking historically, has been used by the holders of power to induce others to live for the interests of their masters rather than for their own”.

Thus Russell fumes at the reverence of labour, or as he calls it, “moving matter about” (hardly a conception that needs much revision in the service economy of cursor and email). For him, the work ethic is an instrument of the aristocratic class to help maintain their own avoidance of work. Like Keynes’ Economic Possibilities, which lamented the “growing-pains of over-rapid changes” of the time, the piece is in many ways embarrassingly relevant today. The line, “that the poor should have leisure has always been shocking to the rich”, for example, rings too true in a political environment almost totally eclipsed by the ‘strivers’ vs ‘skivers’ debate just a few years ago. Modern methods of production should be sufficient to provide the “necessities and elementary comforts of life”, argues Russell, and the rest of our time to do with as we see fit.

To recall these utopian predictions is to recall just how far we have failed to realise what was once a central element of progress, indeed, how we fail now to even recognise it as such. Even major policy advances in the area, such as the EU’s Working Time Directive (with its focus on safety and productivity), have neglected any radical element of change. Idleness remains a vice, feared not just economically in terms of lost productive potential but even on the political left as a “lonely and unfulfilling vision”.

In this context, radical proposals for a four day week risk being reduced to little more than a business fix. Can employee motivation and concentration be improved sufficiently to increase marginal output? The boss of one of the most publicised recent trials, at an insurance firm in New Zealand, articulated this approach neatly in laying out his focus: “it’s productivity, productivity, productivity!”. Whilst this thinking may be helpful in establishing a sense of existing economic viability for the policy, it excludes its most crucial aspect – what we gain in our newfound free time.

Because of course, at this time of year more than ever, we know that doing nothing never means doing nothing. To recognise the true value of leisure and idleness means subverting material ideas about what it means to be productive. Most of us will have just returned from a Christmas break where jokes were made, opinions discussed, housework shared, books read, games invented, ideas pondered, friendships rejuvenated, attachments forged. No doubt for a brave few muscles were exercised and sports contested. This output isn’t the product of the invisible hand. This is the natural fruit of a shared indulgence in idleness safe in the knowledge that one’s security is guaranteed and one’s basic needs are met. As Bobby Kennedy argued in his critique of GDP as a measure of progress, it is this mass of economically ignored value that makes life worthwhile.

The modern economic challenges of working less

In Praise of Idleness also points to two major societal changes which make the task of delivering a shorter working week, if it is to be accepted, all the more challenging. Firstly, the remnants of a leisure class have largely disappeared. It is no longer just America whose “men work long hours even when they are well off” as Russell writes. Britain’s highest earners today work very long hours. Secondly, in Russell’s 1930s Britain, while earning is morally laudable, spending is deemed “frivolous”. Today, on the other hand, consumption – when based on ‘earned’ income – is not only culturally acceptable, but economically virtuous. Indeed the potential for material consumption to increase under a four day week is a convincing argument for it for some. Henry Ford, of course, was an early pioneer of this mantra, unilaterally granting workers a five day week in 1914 in the knowledge it would allow more time for weekend ‘leisure driving’.

The combined lesson of these two crucial differences is that long working hours are today more than just a moral kink underpinned by historical power. They have been fundamentally subsumed into our economic system.

Sixty years before Keynes and Russell, economist William Stanley Jevons discovered that the Watt steam engine, which greatly improved the efficiency of coal use, had actually increased overall coal consumption, as a result of heightened demand. The widespread tendency of the efficiency gains of technological progress to increase resource use rather than reduce it became known as the Jevons Paradox – and to this day it refuses to go away. The same has occurred with work. The slickest offices have delivered not shorter weeks but both higher output and bored staff. And perhaps worst of all, we are all in on the act. No longer can we simply decide to wrench the moral lauding of work from Russell’s leisure class who sustained it for their own benefit. As Aeron Davis has written, today’s elites are increasingly mere reckless opportunists, lacking the coherence and control to operate this system for theirs or anyone else’s benefit. Russell’s “morality of slaves” is preserved not in service to a dominant people but to the sovereign blob that is ‘the economy’. Hegemony – cultural and economic – is what now sustains the work ethic. This is why it is so hard to imagine a world with less of it.

In Praise of Idleness is, therefore, a timely reminder that a shorter working week is a much more fundamental challenge than simply delivering the same for less – just another efficiency gain, another productivity drive. It is part of a wider reckoning, a revaluation of the purpose of work and progress – the makings of an ideological basis for a post-capitalist economy.

At this time of year In Praise of Idleness is also a reminder of something more obvious. Leisure – “its ease and security”, and the indulgence in learning, good nature and “active energies” that it allows for – was once among the ultimate goals of civilisation. Reading Russell, it seems only right it should return.

About the author
Robert Magowan is an MSc Economics and Governance student at Leiden University in The Netherlands. He is active in the Green Party of England and Wales and is currently researching the socioeconomic implications of a shorter working week.

Why You’re Not Getting a Raise

By Nikos Bourtzis.

 

Much of the developed world has experienced stubbornly low real wage growth since the financial crisis of 2007. Currently, the British people are seeing their earnings decline in real terms. Even in Germany, where unemployment keeps falling to record lows, wage growth is stagnating. This phenomenon has squeezed living standards and has been one of the main culprits behind the rise of anti-establishment movements. Faster pay rises are desperately needed for the global recovery to accelerate and for ordinary people to actually be a part of it. This piece explains why rising labor compensation has been relatively minuscule during the current economic upturn and how this phenomenon could be remedied.

A bit of history

The lack of meaningful pay rises is not a phenomenon that started with the financial crisis of 2007. It can be traced back to the 1970s and 1980s, when monetarism started sweeping into academia and politics. The stagflation of the 1970s, the simultaneous rise of inflation and unemployment, led some governments to abandon the Keynesian policies of the past because apparently these policies could not deal with the stagflation. Monetary policy became the preferred tool to control inflation, together with a revived notion that markets, if left to their own devices, would bring the best social outcomes. The Thatcher and Reagan governments are some of the most famous examples of States adopting and implementing these beliefs. The first institution targeted for deregulation was the labor market. Wages increases were frozen and employment protection was scaled back, because it was believed that demand and supply forces would restore full employment. However, unemployment in the UK exploded after Thatcher came into office in 1980, increasing  to over 10% and never returning to its post-World War II lows of between 1% and 2%.

Labor unions are one of the most important institutions regarding pay rises. In most industrial countries, they are responsible for wage and working conditions negotiations between employers and employees. Union membership in OECD countries grew until the mid-1970s but then started dropping. With the rise of neoliberal governments in the West, organized labor came under attack. Under the free-market ideology, unions disrupt economic activity with strikes and demand higher-than-optimal wages. Thus, their power needed to be kept in check. What is more important, though, is the shifting of ideas in what the goals of the State should be. In the post-War period, an expressed purpose of governments was to keep aggregate demand at full employment levels. The UK government, for example, stated full employment as its purpose after the War in its Economic Policy White Paper in 1944. That goal changed with the rise of neoliberalism.

When the commitment to keep employment levels high and stable was abandoned, and labor markets were deregulated, unemployment spiked in most countries and has never fallen at levels where it can be stated that full employment exists. Even during strong upturns unemployment levels in most countries did not dip below 4%. As a result, labor unions, and workers in general have lost their biggest bargaining chip. When there is full employment, and thus jobs are abundant, workers have more power to demand higher wages and better working conditions. With the neoliberal policies of the Reagan administration, real wages in the US got decoupled from productivity, meaning that workers stopped receiving their fair share of the output produced. The same phenomenon has been observed in many other industrialized countries, such as the UK. The policies introduced in the 1980s were pretty much sustained and expanded up until 2008.

 

The Financial Crisis: A turn for the worse

The situation became even worse after the financial crisis erupted. For example, in both the US and the UK the growth of wages slowed even more, as shown in the following figure, even as the headline unemployment returned to pre-crisis levels.

Moving towards a low headline unemployment rate, though, does not mean full employment is being achieved. In the US, the U-6 measure of the unemployment rate, which adds the underemployed to the headline rate, shows that the real unemployment rate is at 8.6%. Far from full employment! In the UK, it has been reported by the Office for National Statistics that the number of people employed in zero-hour contracts has risen by 400% since 2000 but most of the rise happened after the financial crisis. Thus, the employment situation is worse than before the crisis which leads to a further decline in wage growth.

 

Why is high wage growth important for the recovery?

It is essential to point out that one of the main reasons the current economic recovery has been weak is low wage growth. Wage income is the main propeller of consumer spending, which accounts for more than 60% of GDP in industrialized countries. Low wage growth means low consumer spending, thus low GDP growth and employment. Currently, households are borrowing to keep their living standards stable and that is what’s keeping consumer spending going. This process, though, is unsustainable and will not last long. When households cannot afford to borrow anymore another financial crisis will almost certainly occur. That’s why governments need to do everything in their power to restore wage growth.

What can be done?

The power of organized labor has been decimated since the 1980s. If workers cannot actually have a say in what happens in the workplace then they cannot fight for fair wages. This is why unions need to be strengthened and supported by governments. Employers should be forced to negotiate wages through collective bargaining and union coverage should be expanded above the current 50% OECD average. This will level the playing field between powerful employers and the currently weak labor class.

As mentioned before, productivity and real wages have been delinked since the 1980s. That’s where the minimum wage could potentially help. In the US, the real minimum wage fell after 1980 and has stayed relatively flat since then. With the liberalization “mania” sweeping the western world, governments are freezing public sector pay rises and Greece even cut the minimum wage in the name of restoring public finances and growth. That’s the exact opposite of what should be done to restore growth. Wages drive consumption and growth, cutting them can only depress the economy. Hiking the minimum wage will help sustain consumption based on wages, employment growth and, thus, wage growth.

A sure way to speed up wage growth again is fiscal stimulus. Government spending lifts aggregate demand directly and effectively. If enough spending is injected into the economy, it will create enough jobs to bring full employment. The momentum and labor scarcity created by the stimulus will force wages up and give workers and labor unions more bargaining power. A Job Guarantee Program, if ever implemented, would effectively set a wage floor in the economy, since any person working at a lower wage than the Job Guarantee offers will be given work in the public sector.

The “curse” of low wage growth is not something new and it definitely got exacerbated with the financial crisis. Even though unemployment is currently falling in many countries, it is still way above full employment levels. With workers’ rights under attack for some time now, unions do not have the power they once did to promote strong pay growth. If the current recovery is to accelerate, and for ordinary people to participate in it, wage growth has to rise substantially. The only way to do this is for labor unions to be strengthened and governments to once again commit to full employment.

About the Author
Nikos Bourtzis is from Greece and recently graduated with a Bachelor in Economics from Tilburg University in the Netherlands. He will be pursuing a Master in Economics and Economic analysis at Groningen University. Research interests are heterodox macroeconomics, anti-cyclical policies, income inequality, and financial instability.

State of the Unions in the US Economy

Debates about the disappearance of the middle class and the lack of opportunities for the majority of Americans have been at the forefront of the 2016 presidential election. However, discourse surrounding unions and ways to increase the bargaining power of workers are often overlooked in these discussions.

Illustration: Heske van Doornen

These are integral components of the issue that could enhance the current economic climate for the middle class, and especially benefit low-wage, minority, and immigrant workers. Without unions, employees can be fired at-will in most states and have no collective leverage to negotiate with employers over their most basic terms and conditions. There are almost 15 million union workers across the country who have these rights, and therefore benefit considerably from better wages and working conditions. Here are four ways unions make a difference.

1. Unions benefit workers—especially women and minorities—through the union wage premium,according to data from the Current Population Survey.

  • Collective bargaining gives union members wage advantages over nonunion workers, despite holding the same jobs and sharing similar characteristics (e.g. education level, age, race, gender). This is called a union wage premium. On average, union members commanded a 26 percent wage premium in 2015.
  • Women tend to have considerably higher union wage premiums than men. In 2015, they made about 33 percent more than their nonunion counterparts, on average, while the union wage premium for men was approximately 17 percent. Unions are also offering another advantage through helping to close the gender pay gap.
  • Minorities have also shown to have better economic outcomes when they belong to unions. As of 2015, average Hispanic full-time workers’ weekly earnings were 47 percent higher when they were part of a union. The typical African-American worker received a 30 percent union wage premium.

2. Unions not only push for higher wages, but their members also tend to obtain more comprehensive benefits. According to the U.S. Bureau of Labor Statistics, union workers are more likely to have access to health insurance, as well as have retirement plans and paid sick leave.

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  •  This is especially important for immigrant workers and employees in low-wage jobs. The Center for Economic Policy Research (CEPR) finds that immigrant workers who are union members have close to a 50 percent higher chance of having employer-provided health insurance, and twice the probability of having a retirement plan. Union workers in low-paying jobs have a 25 percent higher probability of having these benefits.

3. Unions fight to maintain an equitable distribution of income among employers and workers.

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  • It is no coincidence that the percent of income going to the top percent of earners has increased while union membership has declined. The erosion of collective bargain reduces the share of income going to American families in the middle of the income distribution—not only union members. That is because unions pull millions of non-union Americans into the middle class by setting higher compensation standards that push everyone’s wages up. The decline of the middle class is, therefore, directly related to the decline in the density of unions.
  • The shrinking middle class has resulted in less spending money for many American families. Considering that household consumption is the main engine of our economy—accounting for around 70 percent of GDP—when the majority of workers can’t afford to spend the economy stagnates. Thus, contrary to popular opinion, unions do not impede economic growth when they fight for labor to receive its fair share of income, they are actually necessary to maintain a strong economy.

4. Unions are crucial for democracy.

  • As a recent Century Foundation report explains, unions serve as counterbalancing influences to arbitrary government powers. They function as “schools of democracy” for workers and help maintain a public education system that fosters democratic values. For example, the Milwaukee Teachers’ Education Associationsuccessfully advocated to revitalize the school curriculum to include issues surrounding civic engagement. Unions also represent one of the largest forms of an organized voice for low and moderate income Americans. In short, strong unions could ensure that society does not become governed by a small number of wealthy individuals.

So Why Are Union Membership Rates So Low?

Although there is overwhelming data showing the benefits of unions, they are battling to maintain their crucial foothold in the economy, especially in the private sector.

According to data from the Current Population Survey, unions remain strong in the public sector, with more than one-third of employees identifying as union members. Not surprisingly, the public sector employs more minorities and provides more equal wages than the private sector. The professions with the strongest unions include teachers, police officers, and firefighters.

However, workers in the private sector are over five times less likely to participate in unions, with membership rates down to 6.7 percent.

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The decline in union participation in the private sector has dragged down the total union membership rate. However, thanks to strong public sector unions, the rate of decline has stagnated in recent years, remaining at 11.1 percent since 2014.

Among states, New York has had the highest percent of union members with 24.7 percent in 2015. South Carolina has been on the other end of the stick, with only 2.1 percent of full-time workers belonging to a union. Examining the breakdown of union workers by state reflects the impact unions can have on lifting the wage floor for all citizens. States with higher union density tend to have a higherminimum wage for union and nonunion workers alike.

Even though polls show that close to 60 percent of workers see unions favorably, structural barriers have been holding back organizations from embracing unions.

The election process to establish a union, governed by federal law (National Labor Relations Act), puts major barriers in place for workers who want to become members. Even when workers want to be part of a union, they are typically harassed and can find themselves illegally fired. The National Labor Relations Board (NLRB) maintains that workers have the right to “form, join or assist a union.” However, the CEPR found there has been a steep rise in illegal firings of pro-union workers in the 2000s compared to the previous decade. Employers have a variety of unfair labor tactics they have used in union organizing drives—like hiring anti-union consultants (a $4 billion-a-year industry) or spying on their workers. However, minimal penalties and slow enforcement disincentivize companies from following the law. For example, two of the biggest employers in the U.S.—McDonald’s and Walmart—have been targets of such lawsuits but have rarely faced significant enough repercussions to dissuade them from continuing to employ these practices.

Another obstacle to establishing unions have been the Right-to-Work (RTW) laws, which are estimated to reduce union membership rates by 8.8-9.6 percent. With the addition of Wisconsin and West Virginia in the past two years, twenty-six states now have RTW laws. Under RTW state laws, companies can’t lawfully agree to agency shop, which allows workers to receive benefits secured by unions without contributing to cover collective bargain costs. The lack of agency shop cripples unions, and dissuades those interested in organizing drives.

Proponents of RTW argue these laws foster economic growth by raising competitiveness and attracting more business into their states. However, these laws promote economic growth by supplying their citizens labor at the cheapest price, instead of promoting and creating higher wage jobs. Workers in RTW states, which are most common in the South, are estimated to make $1,558 less per year, on average.

How Are Unions Responding?

Unions and their allies are developing new strategies to overcome these challenges and build alternative forms of workers bargaining.

A first priority has been strengthening labor laws and access to unions. Promising developments include the WAGE Act introduced last year that would extend civil rights laws to workers in unions. And, an emboldened National Labor Relations Act has put in place new rules to make elections faster and to make it easier to organize workplaces, like McDonald’s, that are jointly owned by a main company and numerous franchise.

In response to the limitations of firm-by-firm bargaining, unions are mounting cross-industry, cross-state campaigns to uplift the working conditions of all workers. The Fight for $15 movement is bringing together thousands of workers to demand a $15 minimum wage,which has already been implemented for workers in Seattle,New York, and California.

Unions are also partnering with alternative labor organizations, like workers centers, to provide support to workers—mainly people of color, immigrants, and low-wage workers but also those in the patchwork economy—that do not have access to union
representation.

By Oscar Valdes-Viera
Illustration by Heske van Doornen

This piece was originally published (here) by The Century Foundation in New York.