The paradox of our times is that many Canadians today work long hours while many others have no work at all,” reads the landmark 1994 report by Canada’s Federal Advisory Group on Working Time and the Distribution of Work, popularly called the Donner Report. “Research shows that, under the right circumstances, a major reduction in working time could result in a meaningful decrease in unemployment and a significant redistribution of jobs.”
Indeed, cutting the working time of all Canadian workers by 10 per cent would result in a “substantial redistribution of jobs,” according to results of a simulation by the economic forecasting firm Informetrica Limited.
The simulation, featured in the Donner Report, examined what would happen if Canadians gradually reduced their work hours through methods such as shorter workweeks, more vacation time, or phased-in retirement.
Reducing work-time can cut government expenses, make workers more productive
The results were positive. Between 1995 and 2004 – the time span of the simulation – the unemployment rate was predicted to drop by four percentage points, as many unemployed found new jobs due to the overall reduction in work hours. GDP would be little affected because the same amount of goods and services would be produced. Disposable income would decline slightly because of the shorter work hours. However, this drop in income would be offset by substantial increases in leisure time.
Several studies also show that a drop in work hours actually makes workers more productive. The Donner Report concluded that a 10 per cent reduction in working time would produce a five per cent increase in hourly productivity. In addition, government spending on social assistance and unemployment insurance would decrease, the tax base would widen, and corporate profits would rise slightly.
“We think of that as a real win-win, including a win for the government budget, never mind job creation,” says Arthur Donner, who chaired the Advisory Group.
A study done this year by GPI Atlantic uses the same model to show that a 10 per cent reduction in Nova Scotia’s work hours should free up enough hours to create about 20,000 new jobs, even after offsets in labour productivity are accounted for. If these jobs were filled from the ranks of the unemployed, the province’s unemployment rate would be cut nearly in half.
Cut overtime to create jobs
Cutting overtime is another way to redistribute work in Canada, while also avoiding health costs and problems associated with overwork and unemployment. In 2001, 1.2 million Canadians were out of work. At the same time, workers clocked nine million hours of paid overtime – the equivalent of 225,000 full-time jobs. Cutting overtime can make a dramatic difference to workers in some beleaguered industries. For example, the union at a Powell River, B.C., pulp and paper plant restored 89 lost jobs in 1997 by reducing its workers’ overtime hours.
Canada can choose among policies, learn from other nations
Canada is in the enviable position of being able to learn from the lessons of many work reduction experiments in Europe and North America – and to learn from our own mistakes. One notable Canadian failure is Ontario’s “Rae Days,” introduced by the NDP premier in 1993. The plan, which attempted to save money and jobs by cutting work hours, was unpopular, poorly implemented, and short-lived.
By comparison, countries such as Belgium, Denmark, and the Netherlands have implemented a wide variety of successful work-time reduction policies. In 1995, eight per cent of Belgium’s civil servants – 7,000 workers – took a 20 per cent reduction in work hours in exchange for a 10 per cent reduction in pay.
The Netherlands redistributed work hours so that workers now put in 469 fewer hours per year than U.S. workers – equivalent to nearly three months less work yearly. One third of Dutch employees works under 35 hours weekly, with many people job-sharing. Only six per cent of people working these shorter hours would rather have more work.
Sweden, Luxembourg, France, and Austria have up to five weeks of holidays per year, while Danes have 5.5 weeks, and 70 per cent of German workers now have six or more weeks paid vacation a year.
There are many options for cutting both overwork and underwork, and for promoting policies that foster equality and increased quality of life, secure jobs with benefits, and work that is socially and environmentally benign:
• Job-sharing: Two people choose to share one fulltime job, including benefits and pension package.
• Shorter workdays: Parents match their work hours with their children’s school hours, to be home when children return from school.
• 4-day workweek: Reducing work to 35 or 32 hours a week. Biggest advantages are a large block of leisure time and less commuting.
• Longer vacations, sabbaticals, or educational leaves.
• Phased-in retirement: Older workers gradually work fewer hours, and serve as mentors training incoming younger workers.
• Flexitime: Workers vary the beginning and end of their workday. Allows better balance of work and family life. Many benefits, including less absenteeism and workplace stress.
• Telecommuting: Working from home or some site other than the workplace. Benefits include flexibility, more control over time, and less commuting. Drawbacks may include social isolation and a lack of regulation.
One innovative and successful experiment in Albany, New York, gave civil servants the option of unpaid summer leave to coincide with their children’s summer vacations, with guaranteed re-entry to the workforce in September. This created summer jobs for university students and saved the state government money, while improving morale and work/family balance for the workers.
This article was originally published in Reality Check: The Canadian Review of Wellbeing, a joint project of The Atkinson Charitable Foundation and GPI Atlantic.
Posted by sandwichman at January 5, 2005 06:00 PM