The economic benefits of shorter working hours in a new ‘non-economic’ conception of time

Protecting bankers’ and creditors’ interests above all else is foolish economic policy. It enriches one group of people at the expense of nearly everyone else.

Excerpted from Juliet Schor, commons-oriented economist, author of the book Plenitude:

(Juliet’s proposals are rooted in her different conception of time, which we feature just below)

“Protecting bankers’ and creditors’ interests above all else is foolish economic policy. It enriches one group of people at the expense of nearly everyone else. But these days, it’s hard to get a hearing for the view that the wealthy countries remain wealthy, that we can solve our economic problems without making most people worse off, and that we can also do it while addressing the much larger challenge we face: climate change and growing ecological devastation.

So what’s the alternative to slashing government programs, budget cutting, and more concentrated wealth at the top? The centerpiece of a new approach is to re-structure the labor market by reducing hours of work. That may seem counter-intuitive in a period when the mainstream message is that we are poorer than ever and have to work harder. But the historical record suggests it’s a smart move that will create what economists call a triple dividend: three positive outcomes from one policy innovation.

The first benefit of hours reductions is a significant reduction in unemployment. In the wealthy countries, many of the jobs lost in the 2008 downturn will not re-appear. The revolution in information technology has made many jobs unnecessary, raised labor productivity, and undermined a good swathe of the labor market, as firms introduce radical technological and product innovation. (And some of the jobs are being created in low wage countries.) This is familiar territory, as it has been occurring since the 19th century. The buggy and barrel makers are long gone. Toll takers and the workers in DVD factories are on their way out. So too are household tax accountants and retail check-out clerks.

Historically, market economies have absorbed this displaced labor in two ways. The first is the creative of jobs in new industries making new products. The 20th century brought automobile workers, higher education administrators and medical personnel. But new jobs, spurred on by growth in GDP, are only half the story. The other mechanism for maintaining balance in the labor market has always been reductions in hours of work. Without the advances of a shorter workweek, vacation time, earlier retirement and later labor force entrance, the economies of the OECD would never have attained the “golden age” of high employment that prevailed after the1930s depression. Between 1870 and 1970, hours of work fell roughly in half. These countries have re-balanced the labor market by re-distributing work to make its allocation fairer. We need shorter hours because it is unrealistic to count on growth in GDP to absorb all this current and future “surplus” labor. Rich countries just never grow that rapidly. So the austerity economics that says work longer and retire later has it exactly wrong.

But even if GDP growth could solve the unemployment problem, it shouldn’t, because the cost in GHG emissions is prohibitive. North America and Europe have already blown their carbon budgets and until we re-structure energy systems, growth isn’t reconcilable with responsible emissions levels. Here too shorter hours of work provide a dividend. They are associated with lower ecological and carbon footprints. Countries that work more pollute more. That both because their scale of production is larger (the GDP effect) and because time-stressed households and societies do things in more carbon intensive ways than societies in which time is more abundant. Longer hours of work lead people to travel, eat, and live faster-paced lives, which in turn require more energy.

The third benefit of shorter hours is the time itself. As a growing movement of “downshifters” attests, short hour lifestyles allow people to build stronger social connections, maintain their physical and mental health, and engage in activities that are creative and meaningful. Time is especially valuable in rich countries where material needs can be met for everyone, and deprivation is caused by mal-distribution of income and wealth.

So that’s the triple dividend: reduce unemployment, cut carbon emissions, and give people quality of life. Austerity economics says we can’t afford to work less. A serious reading of our economic history suggests we can’t afford not to.”

Towards a new conception of time and life:

Excerpted from Juliet Schor:

“The core insight of my model is the need to transform how people spend their time. Its first principle is to reverse the increased in time devoted to the market that has occurred in recent decades. (The US, most of the global South and some OECD countries have experienced rising hours.) In the US, annual hours of work rose more than 200 from 1973 to 2006. Longer hours raise the ecological footprint, both because of more production, and because time-stressed households have higher-impact lifestyles. Getting to sustainability will require slowing down the pace of life, which means working less.

Shorter hours are also key to solving the unemployment crisis. In the US, it will require 11 million new jobs to return to pre-crash levels. That breaks down to 500,000 new jobs a month for almost two years. That’s an unrealistic number, unless we address hours of work. In comparison to Western European countries, where hours are much shorter, the U.S. has to generate between 6 and 20% more in Gross Domestic Production to create each new job.

The recession has gotten us started down this road. When it began the workweek stood at 34.1 hours, but by April of 2010 it was 33.3. A rising workweek is a strong desiderata of recovery for mainstream economists, but they fail to see that it makes job creation harder, contributes to stress among employees, and exacerbates ecological degradation. Declining hours could re-balance the labor market and free up time for people to engage in low-impact, self-providing activities that reduce their dependence on the market. These include growing food, generating energy, building housing, and making small-scale manufactured goods, such as apparel and household items.

This do-it-yourself activity is highly satisfying for people, because it helps them learn new skills and allows them to be creative. It also turns out to be the catalyst for start-up businesses and second careers as people take their newfound skills and passions and earn money with them. Freeing up time from the formal market is one condition for incubating a green, small business sector. Self-providing is also part of how we can construct more economic interdependence. As people begin to do more self-providing, they barter, trade, and share on a local level. This builds wealth in social capital, which enhances well-being and security.

Finally, the fourth principle of plenitude is that people will consume differently. With more time and less disposable income, they’ll shift to buying fewer new products, and prefer goods that are longer lasting and repairable. They’ll also participate more in economies of re-sale and exchange. I call that “true materialism,” a consumer practice that respects the materiality of the earth.

Perhaps the most important dimension of plenitude, in contrast to the dominant discourse on sustainability, is that it is not a techno-fix. We do need to change the technologies we use, especially in the energy sector. But this model shows us that we can move a long way toward sustainability by focusing on how we spend our time and organize our economic lives. Shifting to slow, small-scale, low impact ways of living and producing can yield dramatic reductions in footprint, even without new technological systems.”

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