Proposals for anti-meltdown policies, partially inspired by the New Deal in the 1930’s

Jan Hively:

“To create a commons-based society, people need more than exposure to new ideas. They need tangible ways of practicing and living out these bright possibilities. Old habits about how we organize and pay for work maintain the sharp divisions between rich and poor and tie us to the consumer values of the market-based society. At this time when unemployment due to layoffs is growing, we should try out some new ways to share the work and spread the wealth.

Here are three examples:

1. Shared Work

New York State’s Department of Labor (DOL) generated most of the innovative ideas for the New Deal in 1933, and today it is still a source of innovative new programs. One of them, the Shared Work program, helps employers survive recessions and seasonal business adjustments by providing an alternative to laying off full-time workers. Instead of cutting staff, an employer can reduce by 20% to 60% the number of hours of all workers, or those of a select work group. Under an approved plan, employees may collect partial Unemployment Insurance (UI) benefits. To qualify, an employer must have at least five full-time employees and have paid UI tax contributions for at least four consecutive calendar quarters before applying.

Through the Shared Work program, employers demonstrate that they appreciate valued employees and want to keep them on despite tough times. It is costly to find, hire and train new workers. It is also costly to pay overtime to employees who work longer hours to make up for people who were laid off. Most important, it provides stability and hope for valued workers who would otherwise be laid off.

The Shared Work approach could make a huge difference as a federal policy. It would also be useful to brainstorm other ideas of spreading the workload so that more people can be employed and earn enough to meet basic needs in this period of recession.

2. Reduced Hours

In 1930, the world’s leading producer of ready-to-eat cereal, the Kellogg Company, announced that all of its nearly 1,500 workers would move from an eight-hour to a six-hour workday. The company president, Lewis Brown, and owner W.K. Kellogg noted that if the company ran, “four six-hour shifts…instead of three eight-hour shifts, this will give work and paychecks to the heads of 300 more families in Battle Creek.” At a time when the country was sliding into the Great Depression, this was welcome news to workers.

As Benjamin Hunnicutt describes in his book Kellogg’s Six-Hour Day, Brown and Kellogg wanted to do more than save jobs. They hoped to show that the “free exchange of goods, services, and labor to the free market would not have to mean mindless consumerism or eternal exploitation of people and natural resources.” Instead, “workers would be liberated by increasingly higher wages and shorter hours for the final freedom promised by the Declaration of Independence – the pursuit of happiness.”

The company leaders argued that men and women would work more efficiently on shorter shifts. With more people employed, the overall purchasing power of the community would increase, thus allowing for more purchases of goods, including cereals. Kellogg’s vision was of a commons-based society from a business perspective.

Frances Perkins, New York’s Secretary of Labor, was interested in cutting working hours when she was named the U.S. Secretary of Labor by President Roosevelt in 1933. She and her friend, Senator Hugo Black, both influenced by the Dahlberg book and the Kellogg example, drafted legislation requiring a 30-hour workweek. Although Roosevelt at first appeared to support Black’s bill, he was heavily lobbied by the business leaders and backed down. Later, he and Perkins gained approval of the 40-hour week that is still the standard seventy years later.

Several Western European nations with strong unions, have legislated shorter workweeks. Here in the U.S, a growing number of workers seek out part-time rather than full-time employment for an assortment of reasons: older adults seek bridge jobs, young adults seek jobs to support their education, parents seek jobs that complement their children’s school schedules, adult children seek jobs that complement caregiving for their parents, and so forth. Rather than focusing on a standard for workweek hours, Americans would benefit by removing barriers to fully flexible work schedules, which could be adapted to productivity outcomes and employee needs.

3.Universal Benefits

First and foremost for any shared work plan, neither health care nor retirement benefits should be tied to employment. In Western Europe, both are provided by the government from tax payments. The U.S. should adopt similar policies. Small business owners are now restrained from hiring more workers by regulations requiring payment for benefits that should be universal. Stipends for Young and Old. In comparison to the 20th century, there are limited opportunities in the 21st century for adolescents to be employed. Too many lack work experience with the supervision that teaches lifelong skills, habits and attitudes related to productivity. Similarly, there are limited opportunities for older adults to find employment. Many millions of older adults are finding it hard to live on Social Security now that they have lost much of the supplementary savings they had counted on. They need employment to supplement their retirement incomes.

Older adults receiving Social Security payments and adolescents who are still family dependents should receive minimum wage stipends for providing hours of part-time service employment through public and non-profit agencies. Some of the older adults receiving stipends could coordinate primarily intergenerational programs that will teach skills by assuring training and coaching, performance feedback, etc.

In the process of shifting from a market-based to a commons-based society, it’s important to develop and harness the full potential of human capital. Whatever the age of the worker, every position in a stipend program should be structured to match jobs with participant strengths and interests, teach 21st century work skills, and document performance outcomes so that stipend work will build bridges to ongoing employment.

Here is another useful parallel between now and the ‘30s. Between 1936 and 1939, the Works Progress Administration (WPA) paid over $7 billion to more than three million jobless citizens for “work relief to restore human dignity.” Harry Hopkins, the WPA Director, insisted that the work provided should match the skills of the unemployed. Artists were employed to paint murals in public buildings, sculptors created park and battlefield monuments, and actors and musicians were paid to perform. Critics created the word “boondoggling” to describe some of these “white-collar” WPA projects. But the artists’ projects merged with more utilitarian schools and roads, stadiums and parks as a humanist legacy for future generations.

Those of us who seek tangible ways to shift from a market-based to a commons-based society need to get involved in shaping implementation of the stipend volunteer service programs approved through the Serve America Act as well as the stimulus jobs created through the Economic Recovery Act. If properly managed, the federal funds will stimulate human resource development that fits the social and economic needs of this 21st century society.”

(via On the Commons)