*Juliet Schor*
[...] it’s time for the 80% solution. It’s a fresh idea that solves a number of problems: unemployment, work-family pressure, and an impoverished civic sphere.
At the beginning of the 1980s, there was a sharp worldwide downturn, and Western Europe was hard hit. The Netherlands took an especially pro-active stance, opting for stable real wages and declining hours of work in order to get people back to work. New government employees were hired at 80% of a full-time schedule. Many got a four-day workweek, which was well-suited to a small country where quite a few young people commuted by train to their places of employment.
The 80% schedule caught on, and by the time I arrived in the Netherlands in 1995 as a Professor at Tilburg University, the nation was heavily invested in 80% schedules. Public sector workers were joined by academics. It was possible to be not only an 80%-time faculty member, but also a 60%, 40%, or even a 20%, i.e., a one-day-a-week professor. And in what is likely to be most surprising to U.S. readers, the whole banking industry had gone to 80% schedules and a four-day workweek.
People weren’t filling up their garages with consumer goods, but they did have loads of time. By 2000, the Netherlands passed the Working Hours Adjustment Act, which gave employees the right to reduce their hours, without losing their jobs, hourly pay rate, health insurance, or benefits. (Benefits are pro-rated).
Dutch hours stood at 1,367 in 2009 (2010 not yet available) in comparison to the United States, where hours are higher by 364. (That’s about 9 weeks more work in the U.S. than in the Netherlands). Dutch productivity per hour has been considerably higher than in the U.S., although in late 2010 it was at rough parity, because the Netherlands hasn’t laid many people off since the 2008 downturn, in comparison to the U.S., which has had massive employment losses.
In the Netherlands, part-time work is the new full-time. Three quarters of Dutch women workers are on part-time schedules. Twenty-three percent of men are also on part-time schedules, with an additional 9% on a compressed four-day workweek. What began as an extreme gender imbalance is being eroded as men have also begun to prefer shorter hours of work. Life satisfaction, the well-being of children, and a variety of other quality-of-life measures are far higher there than in the United States. Worktime is a big part of why.
If the U.S. started down the 80%-solution road, it would make a huge dent in unemployment. Employers could hire five people for every four jobs that are available. It’s a shorter worktime policy that doesn’t require cutting the hours and pay of people who have jobs. Instead, new people come on at 80% pay and work only four days. It’s especially feasible for younger workers who are getting salaries for the first time and for many of whom shorter hours are appealing.
While 80% pay may not be feasible for people in very low-wage jobs, if these schedules become more widespread across the higher-wage parts of the labor market, they will raise wages. Shorter hours eventually lead to “tighter” labor markets, in which employees can capture more of their productivity gains. Right now, workers can’t get those gains because their labor market position is so poor. With this huge unemployment pool, downward pressure on wages is strong, especially for the lowest-paid. Through this mechanism, the 80% solution could also serve to help alleviate poverty and low incomes. (Combined with a minimum wage increase, it would do even more.)
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In tyrannos