Despite a huge increase in wealth produced in the West over the past century, working hours have remained virtually unchanged. Cutting them by just four hours a week could see one million jobs created in Italy alone, helping tackle the youth unemployment epidemic, says Tonino Perna
Youth unemployment is hitting Italy and other European countries in a exceptionally acute form. It is seen as a natural disaster, an emergency, as if it were a hiccup, an unpredictable event in the history of capitalism in the industrialised countries. The fact that unemployment in general, and among the youth in particular, is structural in mature capitalist countries is not even considered in today’s political debate.
Keynes thought that, in the short term, you could tackle unemployment, with an increase in public ‘deficit’ spending, but in the long run, technological unemployment would inevitably have to tackled (Economic Possibilities for Our Grandchildren, 1930)
Keynes was very clear that the unstoppable technological progress would have resulted in growing unemployment, within the mature capitalist society, and would require structural measures to cope with it. The only effective therapy able to deal with rising unemployment was, according to the great Cambridge economist, the sharp reduction in working hours (ibid.).
Historical cuts in hours
The European labour movement has fought in the past for the reduction of working hours. In 1848 the trade unions in England achieved the 10-hour day as a ceiling, at a time when the workers also worked 14-15 hours a day. Between the two world wars, in almost all European countries the labour movement secured the famous ‘8 hour day,’ , as the maximum daily limit of working hours.
You have to wait until the second half of the 1970s for the debate on the reduction of working hours to resume. With poor results.
Only in France, under the Socialist government of Lionel Jospin, a law was passed in 1998 to reduce the working week from 40 to 35 hours. It provoked much controversy and a media war with the French employers, leading eventually to a de facto return, also through overtime, of a 40 hour week. In Germany there was an agreement for the 36 hour, or ‘short’ week in some parts of the country’s large automotive industry, but it did not spread to other sectors.
In short, after almost a century, working hours have remained virtually unchanged in industrialised countries, despite huge increases in productivity that, as Keynes had predicted, sharply reduced the human energy deployed per unit of output.
The extraordinary increases in productivity per worker have gone largely towards profits, given that the share of wages in gross domestic product (GDP) has dropped dramatically in all western countries in the last twenty years. Maintaining demand, and thus economic growth, required a hyperbolic borrowing process – by households, businesses and states – that has led to the collapse that we have been experiencing since 2008.
It is now clear that no country can, alone, implement an effective therapy to combat structural unemployment. But, in the European Union area, if there was the political will, there could be a concerted significant reduction of working time, at least in the areas less exposed to international competition (eg, construction, public employment, etc.. ). But, you could also consider of a tax exemption, proportional to the reduction of working hours in the companies that decide to go down this road. For example, with a decrease of four weekly hours of work, without loss of pay, you could create in Italy alone over a million jobs between the public and private sectors.
But no one is even thinking about it. Indeed, companies are insisting on tax exemptions for overtime, precarious and underpaid workers are forced to take a second or third job in the black, the previous Monti government attempted to extend the hours of work in schools, the retirement age has been pushed upwards, resulting in an unemployment rate that is growing dramatically, and 2.2 million young people who do not study nor work.
Keynesian economists – Krugman-Stiglitz – insist on a resumption of public spending to combat the recession and austerity policies, ignoring the fact that Keynes saw the deficit spending as a short-term contingency measure to tackle unemployment, and lift aggregate demand, in a historical phase in which debt was a fraction of GDP.
The reduction of working time is not only a necessity to counter rising unemployment, but is also about civilising our societies: what is the point of the amazing advances in technology, telematics, robotics, the mechanisation of so many tasks once performed by the minds and arms of human beings?
What sense is there in a society that has multiplied its material wealth five-fold, after the Second World War, but fails to distribute decent work and the wealth that has been produced, forcing some to die of work and others to commit suicide for lack of work?
Controlacrisi/Il Manifesto 30.5.2013