A shorter working week with no pay cut!

Submitted by AWL on 26 May, 2020 - 11:15 Author: Janet Burstall
Asleep at work

Janet Burstall argues the case from an Australian perspective. The same basic ideas are applicable in Britain and elsewhere.

The most optimistic assessment by the Reserve Bank is that it will take a “few years” to reverse “much” (i.e. not all) of the increase in unemployment from the Covid-19 lockdown. The wages vs jobs trade-off debate is back with a vengeance.

Unionists are arguing that keeping up incomes will stimulate demand and economic growth, while employer voices argue that they cannot afford a 4% rise in the minimum wage, and many will cut employment or go out of business.

The system is lose-lose for workers. Our employment has to be profitable, and capital has not “invested” in full employment for over four decades. Previous periods of sharp rises in unemployment have resulted in union concessions, retarded wage growth plus loss of job security and conditions.

When unions agreed to a series of Prices and Incomes Accords with Labor governments in the 1980s and 1990s, they accepted the argument that wages had to be traded off in order to save jobs. The consequence of those union concessions was not a more even share of jobs and incomes. What actually followed was persistent unemployment, under-employment side by side with overwork, long hours, and two-income households juggling work-life balance — plus inequality, poverty, and punishment of the unemployed.

We’re dealing here with a system of capitalism. It allocates (or doesn’t allocate) labour according to private employers’ calculations of return on investment plus government agency calculations of best conditions for employers to decide to invest. It is not a system of allocating labour to where work needs to be done in order to take care of people, or planet.

Workers need to invert the economy, so that we start with what people need to consume, and how to share the working time fairly among the people able to produce it, rather than starting from how to make investment profitable, with capital choosing who gets an income from working to make their employer a profit.

The work that needs to be done, in order to care and provide for the population, could be shared around more equally, with a shorter standard working week. This would mean an increase in the hourly rate of pay to maintain incomes.

Incomes would be more secure with a shorter and standardised work week (with worker-driven flexibility) and limited use of part-time and casual employment.

A 32 hour or four day standard week with no loss of pay would increase the minimum hourly rate of pay from $19.49 to $23.15, and be the equivalent of an 18.5% pay rise for part-time workers.

Time, our time, our free time is something that the union movement used to fight for, but there has been no reduction in the standard working week of 38 hours for almost four decades.

Unions won shorter hours, starting with the 48 hour week in Melbourne in 1856, then a 44 hour week in 1939, 40 hour week in 1948, and 38 hour week from 1981.

But since about 1980 there has been a slight increase in the actual weekly work hours of full-time workers.

Productivity increases have been the basis for shorter working hours, but these increases have gone to capital, not labour income or time-share. “Between 2000 and 2012, productivity rose by an average 1.3% per year, while real hourly labour income rose by only 0.6% per year on average. In 2000, the labour share was 65.6% — this had fallen to 59.7% by 2012. The labour share recorded in 2011 was the lowest for at least fifty years” (ACTU 2013: Shrinking slice of the pie).

Work insecurity became a much wider problem in the 1980s and 1990s. There was an unemployment spike in each decade. Workers and their unions feared unemployment, and employers won industrial reforms to extend flexible employment practices, including casual employment.

1986 — The Australian Conciliation and Arbitration Commission ruled “claims for reduction in standard weekly hours below 38, even with full cost offsets, should not be allowed” (Australian Conciliation and Arbitration Commission 1986. National wage case)

1986-1996 — Unions agreed to “structural efficiency principles” in wage reviews, under which conditions were lost. The proportion of part-time (including casual) employment grew at the fastest rate ever in this decade.

1997 — Howard Government workplace reforms excluded clauses from awards and disallowed EBAs [Enterprise Bargaining Agreements] from specifying proportions of an enterprise workforce to be employed in categories such as casual, full time and part time.

The benefits of a shorter standard working week include:

Workers have more control of our lives and work.

Standardisation reduces insecurity. We lead Just-in-Time lives — as work has become more insecure, and incomes more precarious, and as employers have more control over hours, irregular hours, casual employment, and the gig economy.

Unity and inclusion. All workers can be benefit mutually, those in insecure employment, in full-time work with long hours, struggling with work-life balance, in any sector of employment, and without work at all.

Gender equality in unpaid and paid work. A standard working week that is shorter would make it easier for women and men to more equally share unpaid caring work. Employers in the 1980s and 1990s took advantage of women’s need for shorter hours of work, by undermining the standard working week and kicking off an explosion in female-dominated, low-paid casual work.

Unemployment damages people. Of the many traumatic consequences of unemployment is suicide risk. “Modelling from the University of Sydney’s Brain and Mind Centre has forecast the financial and psychological toll could result in an extra 750 to 1,500 suicides a year, with fears Indigenous and multicultural communities are among those at greatest risk.”

Climate action. Less hours of work could reduce greenhouse gas emissions. The increased availability of employment across industries would enable workers in emissions intense industries to find incomes elsewhere.

Free time is freedom.

Let’s get radical — while so many people care.

Previously unthinkable policies have been adopted in response to Covid-19, including the (temporary) doubling of unemployment benefits. Sudden change is possible. Gradual change might never happen.

• Abridged from here


Workforce statistics

The workforce in Australia is nearly 14 million people out of a population of 25.6 million.
Unemployment around 5-6% has become normalised over the last 25 years, even called full-employment, or the “natural rate” of unemployment, supposedly the rate that would not accelerate inflation.
Covid-19 lockdown: More than 1.4 million workers suddenly and unexpectedly found themselves faced with the ignominy and distress of unemployment.
30 April 2020: About 1 million people on Job Seeker [unemployment dole].
Unemployment is expected to be between 10-15% of the workforce (of nearly 14 million people) for at least the rest of 2020.
As of October 2019, the Australian Unemployed Workers’ Union reported three million people looking for work in Australia.
As of April 2020, Roy Morgan Research reported over 2 million people needing work, or more work, before the lockdown, and 3.92 million at the end of March.
Less than half of employed Australians have permanent, full-time employment with leave entitlements.
If the 6.5 million full-time jobs based on a standard 38 hour week (most recent Australian Bureau of Statistics data on hours of work, May 2018) before the pandemic, were cut to 32 hours, and the time made up with more full-time 32 hpw jobs, that would mean 1.2 million extra full-time jobs.

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