Thom Hartmann: Would Cutting the Work Week put Everyone Back to Work?

[thomhartmann]

Even though Americans are some of the most overworked people in the world - our long hours at work are doing very little to help the economy recover. So - could following the European model by cutting back on the work week actually help our economy - and put all unemployed Americans back to work? According to a recent CBO report - President Obama's 2009 stimulus package saved up to 3 million jobs - preventing an all out economic catastrophe. Unfortunately - ever since then - Republicans have blocked every single stimulus measure - radically slowing down our nation's economic recovery. Republicans are even trying to make things worse by pushing for austerity and spending cuts - which cuts jobs - and Republican governors have laid off more than 600,000 public workers around the nation. The result is persistently high unemployment, and Americans of all strips are calling for more "job creation." But here's the thing - we all have it all wrong! It's not jobs we should be talking about - it's hours on the job.

Look at the average number of hours worked by each of the OECD nations: You'll notice at the top of the list is Greece - where workers on average put in more than 2,000 hours a year on the job. That dispels that myth that the Greeks are in economic trouble because they're lazy - they actually work far more hours than the rest of Europe. But also near the top of the list is the United States - working nearly 1800 hours a year on average. Now - toward the bottom of the list - you'll notice Germany and France - places where workers put in far fewer hours on the job each year. In Germany - the average worker is on the job 20 percent fewer hours than in the United States - they work one fifth as many hours as Americans! That comes to 400 more hours of time off for a German worker every year compared to a worker here in the United States. Now - some might argue that's a bad thing. That Germany isn't working as hard as the United States - and should be suffering economically for it. But that's not the case. Germany and the United States were both hammered by the global economic downturn beginning in 2007. But where the United States saw their unemployment rate shoot up four percentage points since the recession - Germany actually saw their unemployment rate go down two percentage points. That's because Germany - and other nations that commit their workers to shorter work weeks - understand something our media won't even talk about. It's that when people work fewer hours - then companies have to hire more people.

As economist Dean Baker at the Center for Economic and Policy Research wrote: "There is nothing natural about the length of the average work week or work year and there are, in fact, large variations across countries. The average worker in Germany and the Netherlands puts in 20 percent fewer hours in a year than the average worker in the United States. This means that if the U.S. adopted Germany’s work patterns tomorrow, it would immediately eliminate unemployment [in the US]." Think about it - If a company employing 5 people, each working forty hours a week - cuts down their hours to 35 a week - then they'd have to hire one new person to make up for the lost 25 hours. Of course - the counter-argument would be: A - those who were working 40 hours, but now are working 35 hours a week, are taking home less money. And B - companies would get hit with extra costs having to train and hire a new employee. Germany found a solution to the first problem with their Kutzarbeit - or short-week - program. During the recession - Germany told businesses not to lay off workers - but cut back on their hours. Then the government stepped in and subsidized those who were working fewer hours - essentially paying them for a 40-hour work week even though they only worked 25 to 35-hours.

That's why Germany's economy never really crashed - working people stayed on the job - and were still collecting their full salaries to go out and spend and create demand, which is what drives economies. Which is an answer to the second problem - about do businesses handle the cost of having to hire new employees? The simple answer is that those new costs would be offset by more demand in the economy - and thus more revenue for businesses. We currently have nearly 15 million people unemployed or underemployed. If work hours were cut back - creating new job openings for these millions of unemployed Americans - then they'd all have more money in their pockets again to spend and stimulate the economy. People are earning salaries again, Business are making money, the economy is growing, everybody wins. Back in 2000 - France tried this - by introducing a 35-hour a week limit. And - as the Financial Times reports - it had great success. As The French government's statistics agency - known as Insee - estimated: The shorter week "created between 300,000 and 350,000 jobs in the initial years, while productivity increased 4-5 percent." Not only that - worker pay in France increased as well - putting the nation up on par with German's average worker pay. Despite its success, the 35-hour work week was ditched by the right-wing government of Nicolas Sarkosy a few years back, and, sure enough, unemployment went back up. Now that the country is in economic turmoil, the people have elected a new Socialist President to get it back on track - and he's promised to both lower the reitrement age to 60 and to cut back the work week - both things that will open up many, many more jobs and thus reduce the unemployment rate.

Frankly, this isn't that much different from the American experience - back in the 1960s when unemployment wasn't an issue, the average husband/wife family with children worked 53 hours a week between them. By 2002, that number had exploded to 64 hours a week, and 67 hours a week for families without kids. The point of all this is pretty simple - let's learn basic economics from the successes of other times and other nations. So why not try what some European nations have tried with tremendous success - cutting short the work week. Not only will that eliminate our unemployment problem - but it will also give Americans more time to spend with their family and friends - and more time to pursue hobbies and leisure activities - and more vacations - and even more inventions and creativity. And who's opposed to that?!

The Big Picture with Thom Hartmann on RT TV & FSTV "live" 9pm and 11pm check www.thomhartmann.com/tv for local listings

[limpyhobbler]

1. Heck yeah.

The average worker in Germany and the Netherlands puts in 20 percent fewer hours in a year than the average worker in the United States. This means that if the U.S. adopted Germany’s work patterns tomorrow, it would immediately eliminate unemployment .

...says it all...