Unemployment Solution?

Thankfully the recent Great Recession did not develop into a second Great Depression, but the country is still suffering from the effects of unemployment. In addition to the readily apparent ill effects of high unemployment, there are also long-range effects. A Brookings Institute study projects a wage loss of $112,000 over 25 years for those who lose their job during a recession. Since nearly 9 million jobs were lost, this amounts to $1 trillion in lost wages. ("Recessions and the Cost of Job Loss" Brookings Institute)


As history has demonstrated, government jobs programs and prolonged government spending are effective in counteracting unemployment, but such an approach is becoming politically quite difficult to achieve. On the other hand, there are other options we can pursue.


Having just returned from France, I have been considering their approach to employment. They seem to function quite well with a four-day work week while also enjoying vacations/holidays of four to five weeks. As a result French workers spend more time with their families in non-work related activities and are presumably more stress-free. Employment-wise, the result is that over a five-week period  2 workers are required to accomplish the same amount of work that 1 worker would accomplish on a five-day work week. In the course of a year 10 more workers would be employed and that is not taking into account the long vacation periods.


The first reaction of some Americans is to suggest that either the French are lazy or that such a system is inefficient and lowers the country's  level of productivity. The suggestion of laziness is absurd, but the concern over productivity needs to be considered.


As Americans, we take pride in our level of productivity and corporations are delighted that it continually increases. Fewer people doing more work! Perhaps it is time to question that paradigm. Why not have more
people doing more work? or God forbid, more people doing the same work?


Every American adult has at some time in his/her life come to the realization that  the quality of one's life often depends on balancing time vs. money. How well we balance the two often determines our opportunity for happiness.  The French, I submit, have chosen to sacrifice a little of the money in exchange for time. After all, the amount of time we have is a limited and precious commodity. We can't put time in a bank somewhere and expect it to gain interest. It is what it is. Money, on the other hand, may not be as precious. How much are we willing to sacrifice one for the other?


For capitalistic corporations, the time/money dilemma does not exist. As they are wont to say: it's all about the bottom line. Therefore they need to be convinced that they can make money by hiring more employees. In fact, there is some evidence that employees accomplish as much in a four-day week as they do in a five-day week. Granted, there will be additional administrative costs in having more employees,  but the benefits for the country and the over-all economy will off-set those costs. The company will have more workers who can then purchase their products.


 In a recent paper, "Work Sharing: The Quick Route Back to Full Employment", Dean Baker argued that "dividing up the existing work among more workers" appeared to be the only politically feasible way to increase employment more rapidly. Baker cited the example of Germany, whose aggressive work-sharing policy actually helped it to reduce its unemployment 0.4 per cent since the start of the downturn, in sharp contrast to a 4.4 per cent increase in the US.


Mr. Baker also points out that workers spend hours a day commuting. In the big picture, a four-day work week would be a 20 per cent time savings-- a benefit on so many levels. The time saved  could then be used as the worker chooses.


Obviously the 4-day work week is not a new idea. It has been proposed frequently in the US,  but has never been widely embraced. Perhaps now, at a time when unemployment is strangling our country, some visionary leaders will seriously examine it. 


If the Europeans can successfully balance the time/income equation, I suspect that Americans could do so as well.