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Monday, August 23, 2010

Is It Time for the Shorter Workweek?

There is no lack of rhetoric expounded on the need to dramatically reduce unemployment. Using the most revealing government figures, nearly 17% of the US workforce is unemployed. That figure means that nearly one in five US citizens working before the economic crisis, or joining the workforce since, is, at this moment, idle or under-employed. Counting the involuntary part-time workers and discouraged workers, the total number of US workers seeking work totals nearly twenty million. Though the media and the governing cabal have shown little more than token interest in the staggering human tragedy facing these workers and their families, nearly everyone voices a determination to see unemployment reduced. And while it’s easy to procrastinate on a solution, it must be remembered that the economy needs to generate at least 150,000 jobs a month to keep up with population growth. And therein is the problem: while everyone may want full employment, few have an honest, real plan to achieve it.

Instead, we get lots of talk about “green” jobs, retraining, tax incentives, etc – the usual malarkey that constitutes a stump speech for Democratic Party candidates. Historically, most Democratic leaders and unimaginative, class-collaborationist labor leaders have sought to prompt – “incentivize,” to use the fashionable term – business to hire more workers. This thinking accepts the primacy of the corporate class and seeks to motivate that class by appealing to its selfish motive: profits. For decades, local, state and federal governments have poured billions of taxpayer dollars into the pockets of developers, contractors, service providers and factory owners to entice and cajole them into hiring more workers. Tax incentives to businesses and entrepreneurs have substantially absented the corporate world from its place as fellow taxpayers, leaving the burden on the rest of us.

Despite the persistent execution of this strategy, all economists agree that we have lived through a “jobless” decade. Since the dot.com recession, job creation has lagged far behind population growth and the demand for good-paying jobs. That is a fact. The crisis beginning in 2007/2008 only exacerbated this development by shedding millions of jobs. And since the false recovery, job growth has been non-existent, despite the dramatic rise in profits. That, too, is a fact. Only those ideologically wedded to capitalist dogma fail to see this. The strategy is completely bankrupt.

Responding to the crisis, the Obama administration crafted a hybrid plan that sought to both generate recovery and spur job creation with an $862 billion stimulus program. Commendably, the Administration devoted nearly $300 billion for aid to states, unemployment benefits, and food stamps. Offsetting this was a $336 billion financial incentive package of tax cuts, one-time payments, etc., meant as an expensive bone to those economic Neanderthals who still believed that the recovery would come when folks had a few extra bucks in their pockets. This was merely another example of Obama’s oft-repeated desire to appease the flesh-eaters of the right, a useless political gesture that will be paid for by future taxpayers.

Remaining in the package was a total of $230 billion, a not-insubstantial sum, despite the squawking of well-meaning liberal economists who thought the package inadequate. But simple arithmetic would show that this allocation would support over 5-6 million public sector jobs at $35,000 for a year, even with a modest factor for overhead costs. Moreover, including a conservative application of the economic multiplier effect would add thousands of additional jobs and growth in the private sector. Of course, that would amount to direct federal employment, an approach comparable to that adopted during the Roosevelt administration in response to the Great Depression. But from slavish worship of the supremacy of the private sector and the overpowering influence of that sector on the campaign accounts of our leaders, that solution was ruled out of hand by all but the fringes of government and the labor movement.

Instead, the Obama Administration chose to follow the same path that has proven bankrupt for so painfully long: dangle projects with risk-free public subsidies in front of private contractors. While there still are substantial funds unspent, the results have been disappointing by everyone’s account. At the time the program was initiated, few asked how the funds would be dispersed (I did, on my blog. See How Not to Create Jobs). Would the funds simply go into the pockets of contractors who would complete the work with an existing work force? Would much of the effective stimulus be absorbed by profits and not employment? Indeed, the results were disappointing, but only to those who naively believed that contractors or project managers were in the business of creating jobs. They were happy to rake in profits from infrastructure projects or accept subsidies for new enterprises outside the conventional market, provided the government guaranteed the funding and assumed the risk. In this regard, the Administration merely created a duplicate of the wasteful, profit-bloated defense industry --- no new ideas here, but an additional debt on the shoulders of the taxpayer.

Labor history offers us a different solution, an effective solution. After the Civil War, a movement stirred in the US to shorten the working day to eight hours. Eight-Hour Leagues sprang up throughout the country. Labor embraced the eight-hour day movement and the movement strengthened and helped to organize labor. This struggle reached across the oceans and spurred similar movements around the world.

Winning the eight-hour day became the galvanizing issue of all labor struggles for almost a century. Unions were built and contracts won around achieving a shorter working day. The political landscape – from labor’s point of view – was shaped by the eight-hour struggle.

Today, a shorter workweek would offer a victory for labor against the relentless offensive mounted against workers that has stagnated or reduced benefits over decades. Many, if not most, in labor have not known a major victory for working people in their lifetime. But more urgently, a shorter workweek would offer an answer to the persistent and damaging high unemployment brought on by the economic crisis. A mandatory shorter working day and working week, with strict overtime penalties for exceeding those limits, would force employers to hire more workers to maintain the same level of production or to increase it. A federally mandated shorter workweek – a seven-hour workday/thirty-five-hour workweek – would decrease the workweek by over 14% and potentially increase employment by the same amount. Of course, employers would fight such an increase in hiring as a threat to profitability, but the pressure of the market – the shortage of existing labor – would force new employment in order to even maintain existing levels of production or service activity.

Unlike the conventional answers that place the burden of employment recovery squarely on the backs of taxpayers, the shorter-workweek strategy attacks the profits of the employer. Enabling legislation should guarantee no reduction in pay, as well as reducing hours of work. Accordingly, it is from the surplus value of the capitalist enterprise that new employment would be funded. Only a solution that solves the unemployment problem with a shift in the economic balance sheet from capitalist to worker counts as an overdue offensive in the class struggle and a real advance for working people.

Where the bankrupt, ineffective “incentive” model of employment growth is shared by both political parties and acceded to by most of organized labor, the shorter-workweek model would mark an embrace of class militancy, as well as an effective measure with a noble historic precedent. Unemployment did not come from some inexplicable quirk of nature; it came from the ruthless, conscious profit seeking of the corporate class. In a just society, they should pay for its extinction.

The Fair Labor Standards Act of 1938 governs these matters. It has been amended many times since 1938 to improve the status of labor, but never to change the length of the working day. Maybe the time is now.

Zoltan Zigedy
zoltanzigedy@gmail.com

9 comments:

Randolph said...

This article fails to take into account the reality of globalization of capital and production. A shorter workweek must be accompanied by other measures that both create jobs and support domestic manufacturing. Some of these measures are attacked in the article to no good purpose. For a more comprehensive discussion of a program for jobs please see my booklet "Its Time to Fight for Full Employment" published at www.beavercountyblue.org

Carl Davidson said...

I'm for the 6-hour day, ZZ, and we put it forward in our new CCDS 'Case for Full Employment' booklet.

But it creates no new wealth. It just spreads around existing work and, to a degree, raises prices in the longer run.

So why are you so down on 'Green Jobs'? I'm with you on tax breaks and similar incentives. What business needs from government these days are purchase orders, not tax incentives, ie, the government as consumer of last resort.

For example, why not have the feds give every county a grant to set up a wind farm as a local public-owned utility, then require the components and labor be supplied from inside the US--say by GAMESA--at union-scale.

Now GAMESA is a 'private contractor' but it's also a USW shop. So what's wrong with helping them to grow, so long as they hire more unionized workers?

Or why not form Green Jobs collaboratives in every distressed area with long-term unemployed or young men who have never been employed, at least outside the 'underground economy.' Make the collaborative a partnership between a private construction firm, union apprentice programs, youth social service agencies, and community colleges with 'green energy' courses, and city and county government. Put hundreds of the unskilled to work immediately by making every public building energy efficient for starters. You can teach someone to use a caulking gun properly in a day or two, then go up a skill path from their. Start at a living wage and work up to union scale.

Even the CCC involved private contractors to a degree. But if there are none to come forward on acceptable terms, then you can have the feds as the hirer of last resort by drafting the unemployed into the Army Corp of Engineers, and then have them repair and modernize locks and dams, which they are in charge of.

I'd like to see Green jobs partnerships become worker-owned coops, and I'm fully behind the USW-Mondragon initiative for worker-owned factories. That's what distinguishes us from the Keynesians and the liberals.

But all of this involves some degree of partnership with high-road business. Is that what bothers you? Think of it as a Gramscian historic bloc.

zoltan zigedy said...

Randolph, supporting "domestic manufacturing" can conjure up the ugly face of economic nationalism with its attendant bashing of foreign countries, their governments and their diverse economies. That's the face of supporting "domestic industry" that we most often see.

More to the point, the six (or seven) hour day attacks the pocketbooks of the owners of domestic industry while economically forcing job creation on these same owners. Despite generous "measures" - subsidies and tax breaks - they have failed to make a dent in the unemployment problem over the last decade.

The "good purpose" of my attack is to show the utter failure of this strategy

Thanks for your comment and I promise to read your pamphlet - maybe review it.

zoltan zigedy said...

Carl, the shorter workweek is presented here as an answer to unemployment, an answer that removes the burden of creating jobs from working people as tax payers and puts the costs onto the employer. Is there a good reason why the employer should not shoulder that burden?

I can't agree that the government - rather, tax-paying workers - should be the consumer of last resort. What sense does it make to flood private enterprise with public funds with the hope - so far unwarranted - that they will create jobs? We do that with the defense industry, a bloated, over-charging, corrupt industry. Why not direct government employment instead? It certainly found some success in the '30's.

I have no quarrel with "green jobs" provided the slogan finds some foundation outside of its current rhetorical fashion. I would support federal funding of publicly run and operated wind farms, as I would public transportation expansion and modernization. Public funds for public enterprises seems to me a fine idea. But beware the the old bait and switch where all the R&D, or even the enterprises are given away to private interests.

You won't find an attack on private contractors in the article, only an attack on public welfare for private contractors. Private contractors work best in the private sector.

The green initiatives you mention seem to me to be fine ideas. Moreover, they would be most effective and efficient if the were based on a WPA basis without the waste and excessive profits of the private sector. Why is it necessary to engage a private construction firm? Would they volunteer their services free for the good of the country?

In fact, the CCC was administered and logistically supported by the military, a point of considerable contention when the act was passed.

I'm skeptical of though not unfriendly to cooperatives. I say: Fine, have a go at it. But I fear they are a retreat to the utopian Owenite fantasy. I sure hope that the USW doesn't see cooperatives as a substitute for class struggle.

I'm afraid I don't see any partnership with "high road", middle road, or low road business. I do see fruitful cooperation with small business as part of a tactical partnership against monopoly capital. Working people have more reason to support their neighbor's business than they do Walmart or the S&P 500. I believe that's Gramscian.

Carl Davidson said...

You ignored my main example, ZZ, the GAMESA wind turbine factories in PA, developed as a partnership between local government, a high-road contractor from Spain, and the USW. They've added 1000 new jobs, all unionized with USW contracts.

The PA state government could assist this project, and did so, but if you think some Harrisburg-concocted agency dominated by the present players there could come up with a public firm better than GAMESA, you're unrealistic, to say the least. That's why I think we should work with existing firms when they are capable, but we should set conditions, like unionization and open books. When and if they do fail, buy them out and lease them to the unions and their allies to run as publicly owned but worker controlled.

When the workers are loaded down with debt and the reserve army of labor is large, that's exactly when government has to write the purchase orders and be the consumer. That's also the way it can be targeted. Simply increasing workers paychecks means they pay off credit cards and spend money at Walmart, which largely creates new jobs abroad, not here. We need exactly what the USW is pushing, and aggressive green manufacturing industrial policy anchored here as best as it can be.

Segmenting capital between monopoly and non-monopoly small business is an idea whose time has passed. Far better these days to segment between speculative capital and productive capital, then high road and low road. You'll generated a much better strategy and tactics for creating new wealth, not just redistributing the old or existing wealth.

As for coops being one tool among many in the class struggle, I agree. But if you think Mondragon is the same as Robert Owen's notions, you're not grasping either very well. Father Arizmendi developed his MCC plan out of a critique of Owen.

mulligas said...

I just posted this on digg.

http://digg.com/political_opinion/ZZ_s_blog_Is_It_Time_for_the_Shorter_Workweek

zoltan zigedy said...

Carl, I didn't mean to ignore your point, but it would seem to confirm my skepticism. PA Governor Rendell poured nearly $10 million into the project to create 850 jobs statewide. In February, the Federal government gave nearly $8 million to restore 78 laid off workers to the Ebensburg plant - one third of the plants work force. That's an expensive way to create and save jobs - do the math.

Maybe we could compromise on this point, Carl, since I believe building wind turbines is a worthy project. How about a joint ownership: 51% public/49% private? And then we could guarantee open books with union membership and management! Or, if you like, a wind turbine cooperative! If not now, when?

I have to disagree that the monopoly/small business distinction has passed. Small business people and workers have the same enemy, do they not? Where would either find a common interest with the companies listed in the S&P 500?

For the life of me, I've never understood the high road/low road capital distinction that you propound. Help me! Examples perhaps?

As for cooperatives, I say do it!

But bear in mind that the Mondragon cooperative has not been and is not the answer to Spain's 20% unemployment any more than GAMESA is for Pennsylvania. The shorter workweek is...

Carl Davidson said...

You should investigate a little more about Mondragon and unemployment. Rob Witherell of the USW noted recently "As noted by Judy Schwartz in a recent article, 'During the 1980s, when Spain's unemployment hit 27 percent, Mondragon’s hovered below 1 percent.'" There are other articles on it at the blog I run, http://solidarityeconomy.net , on how the MCC copes with periods of low demand by job sharing an swapping within their complex of hundreds of firms. MCC actually leads the Spanish industrial economy in quality, profitability, and worker well-being.

Yes, GAMESA got tax breaks and other help from the state to get started. But as a high-value added firm, the state will more than make it back over time in new tax revenues.

As I said, I'm for the six-hour day. But it's limitation is precisely that it socks it to productive capital with no new value added, just redividing what's there. What it means is over time, the firms get it back, if they can, the usual ways--adding productivity via technology and producing more with less workers, or by raising prices, if they can, or both.

A wise tax policy, on the other hand, rewards or leaves alone productive capital, but punishes speculative or runaway capital. That's why the AFL-CIO's current fight for the financial transaction tax is a good one. It want to tax the bad guys to help the good guys, the productive sector, so to speak.

Yes, you should also study up on the high road/ load road question. There's whole books on it, and it's a valuable policy concept. A good one to start with is 'Taking the High Road: Communities Organize for Economic Change' by David B Reynolds (ME Sharpe).

Finally, GAMESA-type firms would be better if fully owned by the workers. That's where the USW got the idea for the partnership with Mondragon, and they're currently looking for plants to purchase and convert.

Meanwhile, another example worth looking at are the Evergreen Coops in Cleveland. They've got three up and running, and another dozen on the planning boards.

Even so, this is too slow given the current crisis. Conyers has a Full Employment bill that needs to be brought out of committee, fought for, and passed. We need a massive public effort if we're to put a generation to work, many of whom have never had a paying job with a decent living wage paycheck of any sort. That's why the NAACP, La Raza and the trade unions are at the core of the Oct 2 mass mobilization in DC. That outpouring, however, is only the first step. What's really needed are the ongoing local coalitions with the clout to carry the struggle through at the base, where it counts.

Randolph said...

ZZ,

Lets don't be frightened by 'ugly faces' and dig for the root causes of the problem. Finance capital has at its disposal surplus capital in the form of productive capacity around the globe as both machinery and labor.

Your formulations ignore this reality at the peril of the US working class. Does your internationalism include the destruction of the US working class? It puts you in the same camp as the global financial elite.

If you were going to erect a brick plant in the US to supply the market for building materials where would you buy the machinery for your plant? You would buy it in India where a complete factory can be manufactured, disassembled, shipped to the US, and reassembled for less than half the price of such in the US. The only thing US manufacturers have going for them is the escalation of shipping costs. And India benefits from a WTO rule that rebates their manufacturers and taxes ours. Now you want the US manufacturer to increase salaries by 25% by shortening the workweek at the same pay. Without measures to deal with REALITY that US brick plant manufacturer is out of business and its workers will be unemployed.

This is a complex problem that must be given a thorough scientific dialectical materialist analysis, not a shot from the hip. Your solution will not force US manufacturers, mostly owned or in debt to the banks, to create more jobs.

Protection of domestic industry is not nationalism. It can be exploited by nationalists, especially when the left dogmatically refuses to consider it, in the name of some idealistic formulation of internationalism.