>/ Perhaps I'm missing something, but isn't this trivially false? It's
/>/ obvious to anyone who's ever been around a corporate environment that the
/>/ work involved in hiring and managing ten half-time workers is considerably
/>/ greater than hiring and managing five full-timers.
/Marvin Gandall wrote,
>... until they realized we meant at "no loss in pay" - ie. no
>reduction in annual salary, only a few hours off the work week, which we
>argued wouldn't affect output but would save jobs...
As the comments by John and Marvin suggest, the reduction of working time is not simple and straightforward. John Rae was right when he wrote in 1894 that it is "not a simple sum in arithmetic." Although I must object that there's nothing "trivially false" about what I wrote, it is probably more expensive to hire and manage ten workers than five. All that shows is that if you pick an extreme example you get an extreme result. If people work 24-hour days without sleep soon their productivity falls to zero. Likewise if they work 0-hour days. What I'm talking about is adjustments at the margin.
Marvin, perhaps unintentionally, raises a flaw in the traditional post-WWII union position on shorter working time: no loss in pay, no effect on output and yet it saves jobs. How does that work? It doesn't. It simply doesn't add up. Management was after cost cuts. Where are they if you assume no loss in pay and no reduction in work force? What unions have forgotten (they once understood it) is that it is better to have higher wages, shorter working times and rising incomes than to have higher total incomes at the expense of lower wages, longer hours and stagnating incomes. To achieve the former may require trading off _some_ current income for increased bargaining power in the future, which is what smart unions did in the later 19th century. The US Industrial Commission final report of 1902 gave the example of the stone cutters. Of course if productivity rises faster than the hours of work fall you can have your higher income cake and eat your shorter hours too, providing you have the bargaining power. But it is a mistake to base strategy entirely on that assumption.
John raises the issue known in the literature as "quasi-fixed costs". In other words some costs are per person rather than hourly. As the word 'quasi' suggests, though, such costs are not written in stone. They change over time, for example health insurance costs. And per person labor costs can change a lot as a result of changes in working time (or, what comes to the same thing, no changes in working time when there should have been)..Managers and mainstream economist ignore this. They commit the lump-of-fixed-costs fallacy. Big time.
The kernal of truth to the lump-of-labor fallacy claim is that many 'intuitive' ideas about the relationship between the hours of work and employment are based on static assumptions, although not necessarily just a fixed amount of work. But this flaw applies at least equally -- I would say more so -- to the employers' and mainstream economists' assumptions. But the economist play this game of "I get to do it because I don't acknowledge that I'm doing it and I get to say you're doing it even if you aren't." It all started back with John Rae showing, correctly, that employment gains from shorter hours aren't _automatic_ and then concluding from that that they are impossible.
Think about it. Something is either automatic or it's impossible, right? We all know there is no such thing as contingency. No shades of grey.
The Sandwichman