Time to think differently about work?

What should you do when the economy is in recession, when unemployment is on the increase, and when there is little sign of recovery on the horizon?

Work longer and more productively, right?

As an individual, this makes intuitive sense. When the cost of living is spiralling upwards, future labour market conditions are uncertain, and job security is under threat, putting your head down and working harder would seem to be the natural thing to do. Likewise when it comes to spending less and saving more.

This may be so, but the same logic does not necessarily apply at the national level. If people work longer hours, the market in which they are offering their labour requires less of it from elsewhere with the likely result of an increase in unemployment.

Similarly, conventional economic thinking suggests that in times of stagnation saving more will lower interest rates, spur investment and create more jobs and growth. Yet as both Keynes argued, and evidence from current practice illustrates, higher saving in the absence of sufficient demand can actually lead to weak aggregate demand, undermine investment, and result in an overall contraction in output. Even more so when the overriding political and economic imperative is to take money out of the economy to reduce budget deficits.

‘You do not have to look far to identify the fallacies which are littered throughout much of our conventional economic thinking
to realise this is perhaps another example of “economic logic”
which is starting to come undone.’ Rather than simply focus on driving up productivity and encouraging everyone to work longer hours now is the time to examine the case for a shorter and more flexible working week in the UK, where paid work is redistributed as part of a wider drive towards tackling inequalities. This would not only offer us advantages in the short term, by helping to kick-start a recovery from economic recession, but would also arguably support a much needed transition towards a less carbon intensive, fairer and higher wellbeing economy over the longer term.

Unsurprisingly there would be some big hurdles to overcome. Most of us don’t currently have a choice about the hours of paid work we do. Findings from the Labour Force Survey show a gap exists between the hours people want to work and the hours they actually work. Millions of people are under-employed. That is, they want to work more but cannot. This accounted for 9.1 % of the employed population in the UK in quarter 2 of 2011. But a similar number of people (9.2% of the population) are over-employed. That is, they want to work less (for a corresponding reduction in pay) but struggle to do so.

Simply substituting and transferring hours from one group to the other is not an option. Indeed this is clearly not a policy area where the solutions are simple or the transition pathways straightforward. However, it does raise interesting questions – and the need for further debate – about how any redistribution of paid work and movement towards a shorter working week in the UK might take place.

• Firstly, this agenda should not be about penalising those who are already feeling the pinch but should instead be about tackling inequalities to achieve a fairer society. Why not therefore first start with those who want to work reduced hours but struggle to do so (i.e. the over-employed)?
• Secondly, to support any form of transition we have to make it feasible to achieve in practice. One of the leading academic thinkers on the issue of working time, Professor Juliet Schor, argues that there is a lack of a free market in working hours, with limited choice in hours worked across many organisations and companies. Ensuring reforms to UK employment law make shorter and more flexible hours more, not less, feasible for those who choose to do so is a particular area in need of action.
• Finally, examples from elsewhere are often a useful starting point for transition and there are many we can learn from in this context. We might look to the Netherlands, for instance, which has successfully moved towards a shorter working week by focusing on new entrants to the labour market. Establishing a three or four day working week as ‘normal’ for school and university leavers was rightly deemed to be a more realistic policy intervention than asking existing employees to make a potentially difficult adjustment. In Germany, the introduction of reduced working hours within companies – known as ‘Kurzarbeit’ – has helped ensure its unemployment rate actually decreased in the recent recession. In the US, many companies are experimenting with Results Only Work Environment (Rowe) where employees have control over their time and hours worked, and are assessed on what they get done rather than on the hours they clock on and off

It may seem counter-intuitive to be encouraging people to work less rather than more given the current state of the national economy. However, you do not have to look far to identify the fallacies which are littered throughout much of our conventional economic thinking to realise this is perhaps another example of ‘economic logic’ which is starting to come undone. When it comes to hours of work, perhaps the logic we now ought to be adhering to is less equals more.