A Four-Day Work Week? Be Careful What You Wish For

All of a sudden we're learning that Microsoft is "testing" a 4 day work week. Indeed, the company had already commenced with an experiment earlier this year in Japan.   We also learn from a recent Denver Post Business article ('In Test Run, Four -Day Work Week Boosts Output', Nov, 10, p. 5K):

"Even in a country known for its extreme overwork, the shorter week had a big boost in prdoctivity".

Adding:

"The test run, which took place in august and gave employees five consecutive Fridays off, boosted sales per employee by 40 % compared to the same month a year earlier....The test was billed as being part of a 'work life choice;  strategy helping employees work more flexibly."

A great boon to workers, especially with families?  Hold strain!  The shorter work week comes with a cost: less free time each day because you will now be working TEN hour days, not 8-hour.  And because corporate employers will still want to squeeze out that extra face time - just as 8 hour days becoming 9 or 10, look for 10 hour days becoming 11 or 12.  Don't think that's possible? Then you are fooling yourself. As one UK website points out:

"In reality, most employees on a four day week will most likely be expected to work the same 40-hour weeks, but in four days instead of five. In this case, shifts might be extended to 10 hours. Longer days could have a significant effect on your employees' stress levels and therefore their overall wellbeing and productivity. "

  As the Post piece also warns:

"Some smaller companies that have tried the idea cheer its benefits ...but they have also said it can lead to workers pushing the limits on long weekend scheduling and result in more pressure- filled days when people are on the job,"

Adding:

"Some have warned the push could cut workers' pay, hurt competitiveness, and that a move toward reducing hours rather than legislating  cap is more desirable"

Indeed, futurist writers like Alvin Toffler, e.g.  in his two books,  'Future Shock' and 'The Third Wave', had predicted vastly increased leisure time for future U.S. citizens. For example, in the latter book, he wrote (p. 276):

"Thus we are moving toward a future economy to which very large numbers never hold full time paid jobs, or in which 'full time' is redefined .. .to mean a shorter or shorter work week or work year."

He then cited the case of Sweden in which a "full time" work year continued to mean "1840 hours" or in more practical terms, 1600 hours.   Using that example, then under the currently offered "4 day work week" one ought to expect 4 days with eight hours a day put in, no more.  This would be the work week redefined downward as Toffler indicated.

 We know that never came to pass given that more computers, added gizmos etc. simply compounded the volume of work and thereby increased the demand for more productivity.  All this tied to the GDP or GNP (gross national product)

Let's also please note that comparing the workaholic Japanese  and their productivity gains to those of American workers is  like comparing chalk and cheese.  This is perhaps why, according to the Post article:

"None of the 2020 Democratic presidential candidates had embraced the idea (of the four day week) even though they have backed other ambitious ideas, such as universal basic income or a federal jobs guarantee."

But there really is no mystery in their avoidance here, as opposed to their embrace of the two other proposals. The reason is that they would know - as the UK website pointed out - there's vast room for corporate exploitation of this 4 day week, especially without legal caps on work hours.  So as the site noted, repeating it again:

"Longer days could have a significant effect on your employees' stress levels and therefore their overall wellbeing and productivity. 

SO why would any Dem candidate worth a grain of salt back such a daft proposal?  UBI or universal basic income on the other hand is a :"plus one" for workers in that they receive that money (most estimates are $1,000 a month) in addition to their wages.  Hence, can more easily pay off debts and keep up with medical bills etc.  As for the federal jobs guarantee, that is an unconditional plus for any unemployed but qualified person, again not open to exploitation like a four day work week would be.

What the Dem candidates WOULD back, but which we are unlikely to see from the Neoliberal corporatists,  is a TRUE 4 day week, meaning four,  eight -hour work days but with the pay scaled to a 5 day, 40 hour week.  In other words, less total hours worked but still receiving the same pay as for the longer, original  5-day  work week.

But as I wrote in previous blog posts, don't look for this alternative to happen anytime soon.  That better option isn't what's on offer  because economists keep to a rigid definition of GDP and what constitutes paid work.  As Toffler explained at the time (pp. 282-83):

"Should not a man or woman who stays home and rears a child, thereby contributing to the productivity of Sector B (the formal exchange sector market)  through his or her efforts in Sector A (the informal self-directed, unpaid labor market) receive some income even if he or she does not hold down a job in Sector B?"

This echoes what I wrote in a Feb. 5, 2018 post on the need to redefine the GDP:

"GDP is supposed to measure the total production and consumption of goods and services in the United States. But the numbers that make up the Gross Domestic Product by and large only capture the monetary transactions we can put a dollar value on  ....Almost everything else is left out.  ....In addition, there are hundreds of other contributions not registered that arguably have  major economic impacts. For example, a 2015 Forbes article highlighted how 40 million family caregivers in the U.S. are putting their own careers on hold to provide unpaid care — sometimes for decades.   The estimated  total value of the care has been put at nearly $1 trillion. This isn't reckoned into the GDP but IF it were,  the labor productivity would surely be much higher in the years since 2007."


As Toffler further observed (p. 280):

"There is no recognition as yet that actual production also takes place in Sector A  - that the goods and services produced for oneself are quite real, and that they may displace or substitute for goods and services turned out in Sector B.  Conventional production figures, especially GNP figures, will make less and less sense until we expand them to include what happens in Sector A."

To simplify all this further, if American workers are already doing much "Sector A" work, say care giving for a child or spouse, it should be a no brainer that a 32 hour (4 day) work week makes eminent sense. It allows the worker to commit 32 hours to "Sector B" paid work but also allows him or her time to take care of family needs on the 8 other hours (for which he will now be paid, but are not worked in the formal job).  The issue here is that a 4 day, 10 hour a day job does not make that cut and I am sure Toffler would agree with me - if he was still alive.

The problem we face is that the wealthy owners and capitalists (especially hedge fund owners of hospitals, banks etc) who largely  fund economists' research,  still are committed to reducing pay as much as possible while squeezing every last additional hour of toil from hapless, already overworked (Sector B working) citizens. No one, therefore, ought to be fooled that this 4-day work week now on offer is any kind of boon.

Unless one is a confirmed workaholic, of course.  Or has no family that requires outside of (paid) work attention.

See also:


http://brane-space.blogspot.com/2011/06/modern-economics-its-evil-basis-pareto.html

and

http://brane-space.blogspot.com/2011/06/modern-economics-its-evil-basis-pareto_13.html

Once Again, Slow Economic Growth Is NOT Due To Fewer People

Like a bad penny that just keeps bouncing back, bad memes can do the same though they've been shown over and over to have no ballast, no support. One such meme is the one that insists our slow economic growth is because we have slow population growth. This is the most cockeyed non sequitur among countless others that infest the brains of the Neoliberal econ gurus, pundits and other gasbags.

In this case the meme returned in a recent WSJ piece:'A Hidden Risk of Slow Growth' (Sept. 21-22, p. B14) wherein we read:

"In the future economic growth is expected to be slower still. One reason why is that population growth is slipping so the pool of available workers isn't expanding as fast as it used to."

However, this is a non sequitur and certainly if those same workers are essentially being paid no more per hour than they were 45 years ago. Fiat wages, which means limited spending and disposable income - whether for a mortgage or even a used car. So it makes no difference how many more people one has, or how large the pool of available workers is, if their wages remains stagnant.   Why is this so hard to grasp?

The piece also resurrects another "reason" for current and future slower growth, but which is actually a Macguffin:

"The other reason is that improvement in productivity  - how much workers produce per hour, on average- has slowed markedly since the early 2000s."

And why is this?  Northwestern University's Robert Gordon argues, and he's correct, that by the time the digital revolution got under way- say in the 80s- the big payoff in productivity began shrinking. Meanwhile, the PC-computing payoff basically has "come and gone" dissipating by 2004, when EROEI reached below 10:1.

Energy efficiency continues to decline and yet the econ genii still can't fathom why labor productivity is in decline, nor identify the things gov't can do to slow it. For the worker himself, any such claim is taken as nonsense because he is working harder than ever and merely treading water. 

Less noted, but an equally important factor is how productivity is gauged. We are informed that labor productivity is tied to economic growth, i.e.  the GDP. The GDP in turn is dependent by nearly a 75% proportion on consumption. The growth "rate" however seems to basically be stuck at 2 percent per year and no more.

Is this all bad? And what is the root cause?  A major clue was provided over 20 years ago by authors William Wolman and Anne Colamosca  in their (1997) book,  The Judas Economy: The Triumph of Capital and the Betrayal of Work'.  Therein we learn that productivity in relation to GDP has increased more than 40% in the interval since 1973 even as wages-salaries have remained almost stagnant.

From this it emerges that labor productivity is ebbing because wages have stagnated so workers have not been able to earn enough to spend - to contribute to the 75 percent consumption part of the GDP equation.  The inherent problem then appears to be tying labor productivity to economic growth.   In a September 5, 2016 TIME essay (p. 20),  columnist Rana Foroohar reinforced this aspect by noting:

"Nobody is suggesting that productivity isn't rising because individuals aren't working hard enough. On the contrary, most economists believer the American blue and white collar workers alike are firing on all cylinders."

So what the ivory tower economists, or WSJ nabobs are really telling us when they bitch about "moderate productivity" or "labor productivity too low" is that it isn't being translated into economic growth. But that elicits the question, why not? The answer again, is because workers are not being paid enough to purchase most of the goods they make.  Unless it's via credit card debt, of course.

It doesn't take a rocket scientist or math whiz to figure out the disposable income available to those with the lower incomes (than $37,000/ yr.) would not entice them to spend on very many things - whether goods (e.g. new HDTVs, cars) or services (dining out). Hence, to avoid overstocked warehouses companies must cut production of goods. This in turn leads to a problem with aggregate demand.

Aggregate demand is composed of two parts: 1) demand generated by consumers for goods and services, and 2) the demand for investment goods. When the level of aggregate demand is high, both these components are generally equally high, and the levels of production and employment are high. On the other hand, when aggregate demand is low - or even one of the components (e.g. (1)) is very  low, then levels of production  plummet.

The takeaway is that population increases will not solve the slow economic growth issue, nor will making workers push harder.  What is needed is much higher wages - basically a living wage (I reckon at least $25.00/ hr.) so citizens can afford a decent roof over their heads, adequate food, and access to medical care that doesn't bankrupt them.  But because the Neoliberal financial system views these as having too exorbitant  a cost  via -a vis capital it will never implement them - or allow a politician to be elected who might (say by raising taxes).  

The result? There will never be higher economic growth than 2.0 percent.  In addition, the primary index for inequality, the Gini coefficient, will continue to increase - as it has just recently (from 0.482 to 0.485).  The reason is that the Neoliberal system has zero interest in implementing the changes that could reverse its direction, i.e. Bernie Sanders 8 % tax on wealth. 

U.S. Births Have Declined: It Ought to be Cause for Celebration

The news Wednesday that U.S. births fell for the fourth year in a row, ought to really have sane and temperate citizens jumping for joy.  However, we must bear in mind that most economists (who based their perception of reality on the Pareto Distribution, e.g. http://brane-space.blogspot.com/2012/05/is-us-economic-system-pareto.html  were not enthralled, with experts calling it "more proof that the weak economy has continued to dampen enthusiasm for having children."

Well, DOH! Who'da thunk? Especially when raising one kid to maturity - say high school graduation age- costs $180,000, and doing it through college is at least $285,000. Of course, parents punched by the recession  - unable to afford Mitt Romney's solution ("Just ask your parents for the money!") can always have Junior or Missy take out students loans and be saddled with their own debt.

But be aware that if Romney somehow manages to get enough dopes to vote for him on Nov. 6th, one of his plans (The Economist, Jan. 14, 2012, p. 25)  is to ensure interest on student private loans is increased to 6%. That means the debt burden will be almost doubled on struggling college grads looking for decent work. WHY would Mitt do such a thing? He needs to find the smackeroos to help pay for his intended $2 trillion bonus for defense (see previous blog). One great way is to obliterate Obama's current (low interest )federal loan program and replace it with a private version gouging college kids and their hard working parents!

(As an aside here, I was astounded this a.m. to see the proportion of military vets who are pro-Romney, to be something like 58% What the hell are these guys drinking? Aren't they aware that another of Romney-Ryan's plans is to "voucherize" the Tricare system - the military counterpart to Medicare? Aren't they aware that it's Obama who's actually done the most to protect Vets' benefits from a repugnant Repug House that intends to carve every bit of 'meat' it can from the federal budget to pave the way for what they all hope are Mitt's monumental tax cuts?)

Anyway, moving on. One may rightly ask why the economists are so fretful about the low birth numbers. Let me remind my readers that 99% of these guys are Neo-liberals, which means keeping labor costs and outlays at a minimum for the long term future. This is because they believe with the fervency of a dogma, that capital is the "liberator" of free markets, not labor. What we do know is that unchecked population in any country creates a vast surplus labor pool, which innately lowers the value of all labor relative to capital in a global economy- and in the country proper. If then millions of new borns are created, added to a nation where 13 million are already unemployed and 24 million under-employed, then problems must arise.

Let's also bear in mind that 100,000 jobs per month need to be created simply to keep pace with population growth, or had up to about two years ago. This is why I computed in an earlier blog that most of the unemployed in 2010 could be directly traced to excess births in the 80s-90s. I estimated also that from 2000-2010 some 100,000 births per month yielded 1.2 million a year, for whom jobs would have to be found in the next decade.  That interval then would deliver 12 million newborns for whom 12 million jobs would have to be created.

Can Romney do that? Doubtful, unless a lot of those newly born then grown up citizens that get sent to new war zones (maybe Iran?) by Romney and perhaps meet their untimely ends, so it limits the number for whom jobs must be found later. Perhaps that's why he wants to pump up defense spending - to wage a shitload of new wars to help trim the work-seeking population numbers.

Another way one can view it is that the $2 trillion Romney's seeking will be used to pump up Army, Navy etc. ranks and numbers by creating more military jobs as the best way out of economic morass. Romney's reasoning may well be:"Hey, I can always create more military jobs! And if I start two new wars a year THAT will drive the congress to agree to give me the $$$"

After all, if ya have new wars, and new war zones, ya gotta have people to fight 'em!

Job problem solved! But didn't Romney and the Repukes always say that "Government doesn't create jobs"? Aren't military - the troops, serving the government? Or....is it a private Republican Army?

 In the U.S. then let's get real that increasing births translates to increased numbers of potential workers. The more potential workers that there are, say competing for a dwindling number of GOOD jobs, the more control the CEOs, Vulture Capitalists, bond traders and corporations  have on labor conditions. When the numbers competing for jobs become ridiculous, say  6 or 7 workers for every job, the control magnates and plutocrats can basically dictate whatever conditions they want, including wage increases, health benefits or ....working overtime without pay.

"Now, Billy Bob, we want you to work the next five days OFF the clock!  Also, we are cutting our contributions to your health insurance by one third - so you will have to pick up the slack! Also we are cutting your hourly pay by $1/hour!

And do not give me any sass, boy, because there are TEN people waiting in line to take this job! You can thank the beloved U.S. economists for that, who demanded women give birth to more babies twenty years ago!"


Make believe? A mirage? Hell no! This is exactly the scenario the Neoliberal Overclass wants because it reduces the labor costs the most in favor of the capital they invest. Why more people in this country don't process that, in terms of the birth issue, is beyond me. Why more don't see the declining birth rate as an outright blessing instead of a bane is mystifying.

But....not really. You see in the Neoliberal Economic Empire more babies are seen simply as more "consumers". The more consumers, the more nonsense products can be sold and the higher the GDP - since about 70% of it is supported via consumption. The trouble is, humping PR to future moms to get  them to make babies-consumers makes zero sense unless you also have a way to create jobs in proportion!

If there's no true job creation - other than say the military (where the 'consumers' can actually be killed en masse) then all you've done is create the basis for a vast surplus population of indentured servants or minimum wage slaves.  Is this any way to run a country? It seems the Neoliberals and their high priests believe so!

I don't, which is why I hope Americans - at least most - are intelligent enough not to fall for the economists' hand wringing. Any more than to fall for their "fiscal cliff" hand wringing and bullshit. (Speaking of which, why aren't all the rabid deficit hawks like Peter G. Peterson, former Comptroller General David M. Walker - who's been howling like a banshee for donkeys' years about the deficit as 'a national security problem'-  and Alan Simpson et al screeching to go over the fiscal cliff since it will cut the deficit so neatly and without all the political wrangling?)

But  now the Neolibs assert "there may be a silver lining: The decline in 2011 was just 1 percent — not as sharp a fall-off as the 2 to 3 percent drop seen in other recent years."

Let's hope not, and that the 1 % decline reverts to 2-3% or more this year and hereafter. If not, we can look forward to structural unemployment in the 8-10% range over the long haul, actually indefinitely. Or at least until the Repuke congress allows more job creation, especially via government -based infrastructure replacement and construction.

Meanwhile, according to Carl Haub, a senior demographer with the Population Reference Bureau, a Washington, D.C.-based research organization:

“It may be that the effect of the recession is slowly coming to an end,”

Possibly. But let's hope that the decline in U.S. births isn't. For our future jobs outlook!

On a happy note: The Jobs Report released today showed a 7.8% unemployment while the Neolib economists had forecast 8.2%. This is GREAT news for the Obama team as it shows unemployment now down below 8% and just before the election. While only 114,000 new jobs were added, Jim Cramer - the finance wonk on CNBC, attributed it to corporations still sititng on trillions and looking at the "fiscal cliff". Once we go over that "cliff" and everyone knows the score and that $500 billion will automatically be cut from the deficit so many have their panties in a wad about, we ought to be ok. Unless they can find yet another reason to hoard money. Maybe waiting for a long shot Romney win and installation of his $5 trillion in tax cuts?

Question then is: Which Mitt you gonna believe? The guy who's been pushing these tax cuts all year, or the 'pod person' imitation Mitt that showed up at the debate?