The Australia Institute (such a modest name, I have always thought) has released a report recommending a cap on working hours, a la the French, because full-time workers have told a survey firm that they would prefer to work fewer hours and that they really don’t like working overtime.
It’s a case of deja vu all over again: you know the myth that there is fixed number of working hours that can be redistributed around, without cost, and voila, everyone is better off. (Mind you, Richard Dennis only wants to ‘create’ full-time jobs, because he no doubt thinks part-time jobs are BAD.)
The trouble is that this type of superficial analysis completely ignores the thorough, rigorous and thoughtful analysis that has been undertaken on the topic of working hours, particularly by Professor Mark Wooden of the Melbourne Institute using the longitundinal data base, HILDA. In a hypothetical sense, some full-time workers who put in long hours express a desire to cut back their hours, but we know that in practice that by and large, they do not act on this desire over time. Moreover, the evidence does not suggest that these hard-working full-time hours are any less happy at work than their more leisurely comrades – in fact, work satisfaction is a little bit higher for the hard-working drones.
But does the French experience with capping working hours have anything to commend itself? High rates of unemployment, appalling high rates of unemployment among minority groups (‘assisted’ by very high minimum wages and restrictions on firing) and a high incidence of long-term unemployment. Putting the French and good economic policy together in the one sentence is a big call.
An interesting side-question is: how would these restrictions on working hours be policed, if for a nanosecond, you thought that this would be a good idea? Answer: THE WORKING HOURS POLICE. Now that’s a job creation scheme to die for.
Another link from the ABC.
Does the cap on working hours extend beyond France? Or is it a distinctly French initiative?
TerjeP
10 Nov 10 at 8:41 am
I don’t think it went further than France, TerjeP. It was a French socialist policy, (not EU) that has been watered down since, mainly by increasing overtime.
Gee the Australia Institute are a dopey lot. There is clear evidence that the French law did not increase employment and that French unemployment is a serious problem.
I wonder what the Australian equivalent of riots in the banlieus is?
ken n
10 Nov 10 at 8:51 am
Thanks Ken.
TerjeP
10 Nov 10 at 9:04 am
The argument for the ban is based on existence of ‘rat-race’ externalities based on ‘other-regarding’ behaviour. Everyone tries to get ahead of the next guy and works ‘too hard’. The general thesis is that beyond moderate incomes happiness does not increase so that lower incomes with less effort increases welfare.
It is a big call. There would seem to be better approaches than a ban. Just getting people to worry about their own income rather than being concerned about their income relative to others would improve things.
But generally the cause of trying to promote less work and more sloth is a worthy one in a prosperous society.
hc
10 Nov 10 at 9:07 am
“But generally the cause of trying to promote less work and more sloth is a worthy one in a prosperous society.”
Why? Many people enjoy their work.
Steve Edney
10 Nov 10 at 9:11 am
One of the most difficult tasks in managing a manufacturing business is getting rid of a culture of overtime.
Line managers add overtime because hiring people is difficult and risky if there is a downturn. So they add overtime.
People come to expect this and build it into their family budgets, so reducing overtime is reducing their income. They don’y like that very much.
The rat race idea is largely a myth. I have never seen any evidence that people work harder or more to get ahead of the next guy. And statements that people would be happier if they reduced their expectations is largely a paternalistic view of others. “What are all those people doing at the mall? They don’t need all that stuff”
hc the rate race theory was not part of the French reduction of working hours. It was based on the “one lump of work” fallacy as was the reduction to 38 hours in many industries in Australia in the early 80s. That lead to RDOs and did not increase employment.
ken n
10 Nov 10 at 9:25 am
I am reminded of arguments in pubs 30 years ago. How many people who say they want shorter hours will accept lower incomes?
If brain surgeons are working long hours, should they be compelled to take Friday off and be replaced by someone from the dole queue?
How many of those who say they work unpaid overtime are public servants?
rodney
10 Nov 10 at 9:49 am
What a ridiculous idea:
http://www.independent.co.uk/news/world/europe/france-paying-the-price-for-historic-error-of-35hour-week-1840955.html
.
10 Nov 10 at 10:02 am
Agree, government intervention in this way is not a good idea. If you are good at your job and have a good relationship with you colleagues and superiors, it is usually not that difficult to negotiate better (more flexible) hours. My past two jobs I have cut back to 4 days per week, with commensurate pay cuts (although with high marginal tax rates the loss of income is not that much).
If government was worried about over work, perhaps a few more public holidays would be good? It is far simpler than any other intervention.
Cameron Murray
10 Nov 10 at 10:29 am
John Lichfield, The Independent (liberal), London, England, Aug. 22, 2003
http://www.worldpress.org/Europe/1565.cfm#down
“A Heat Wave Turned Disasterous”
.
10 Nov 10 at 10:38 am
Apologies for the long post.
Almost all collective agreements in Europe set basic weekly working hours for full-time staff at between 35 hours and 40 hours a week, whilst in many countries such as Spain and Sweden there are statutory limits of 40 hours for normal weekly working time.
Under the EU’s 2003 Working Time Directive, each Member State must ensure that every worker is entitled to:
• a limit to weekly working time, which must not exceed 48 hours on average, including any overtime
• a minimum daily rest period, of 11 consecutive hours in every 24
• a rest break during working time, if the worker is on duty for longer than six hours
• a minimum weekly rest period of 24 uninterrupted hours for each seven-day period, which is added to the 11 hours’ daily rest
• paid annual leave, of at least four weeks per year
• extra protection in the case of night work (for example, average working hours must not exceed 8 hours per 24-hour period; night workers must not perform heavy or dangerous work for longer than 8 hours in any 24-hour period; there should be a right to free health assessments and in certain situations, to transfer to day work).
Whilst it is possible to opt out of the 48 hour weekly limit it is not possible to opt out of the rest of the requirements.
The averaging conditions are very important – as I understand it in Germany for example the average can be worked out over a 12 month period, which means that people can work much more than 48 hours in any given week, so long as this is offset some other time in the year. So does France, for some sectors of work (see below).
It is also worth noting that the French 35 hour week is often misunderstood. For example, some sectors (bakery, road transport, etc.) ratified a system of “equivalent hours” which took into account time spent waiting for customers. So 38 or even 43 hours of work could become “equivalent” to 35 hours worked, and overtime hours are counted above this threshold. Employers’ representatives also sought to limit the number of managerial employees covered. The law allowed for agreements by collective bargaining that calculated the number of days worked (rather than hours). This was set at 217 days for managerial employees with “genuine autonomy” in their work. So theoretically, a managerial employee could work more than 2800 hours a year and be officially at 35 hours a week. (52 weeks at 35 hours is 1820 hours). In some sectors managers saw their work time increase with no change in pay. In companies adopting yearly measurements (“annualization”), the employer could ask workers to work fewer hours some weeks (say, 25 or even 0) and more other weeks (say, 45). If the total equalled 1600 annually, workers would receive no overtime pay. This system particularly benefited companies with seasonal variations in sales. There are also complete exemptions, for example, teachers from primary school to university are not covered by the 35 hour week, nor are researchers in government institutions.
The 35-hour has also tended to reduce the share of part-time workers. For example, women who worked 4 days per week (i.e. who do not work Wednesdays, when there is no school for young children) can more easily supply 35 hours work full-time, than 39 hours. Some studies have found a higher frequency in the transition from a “long”, part-time week (20 to 29 hours) to a full time week.
Overall, the Federation of European Employers notes that in practice many employees work well in excess of 40 hours a week, even in countries such as France. In France, in 2007 full-time workers on average worked 41 hours per week, while in the UK they worked 42.1 hours on average. Full-time workers in Austria, Belgium, the Czech Republic, Germany, the Netherlands and Sweden all worked longer average hours than full-time workers in the UK, even though the UK opted out of the 48 hour limit and the other countries didn’t.
(References available on request)
[Peter Has very kindly emailed me some references for this comment.
A primer on the 35-hour in France
Untangling the myths of working time
Working Conditions - Working Time Directive
Sinc]
Peter Whiteford
10 Nov 10 at 10:38 am
Ken, I agree that the French laws were not based on ‘rat race’ theory. It is a theory that justifies restricting working hours to leave all better off because of the ‘other regarding’ externality.
Steve, I agree a lot of creative work yields poositive utility. But there are many occupations where there is disutility of effort.
hc
10 Nov 10 at 10:57 am
After reading Peter Whiteford’s contribution – too complex, too many loopholes, very expensive for the French government (perhaps compensating employers that hadn’t reduced hours in any case) – I rest my case. What was the point of this completely misguided policy?
Judith Sloan
10 Nov 10 at 11:11 am
Dogma, Judith, dogma.
ken n
10 Nov 10 at 11:18 am
hc I would be interested in any references to the “rat race” theory.
ken n
10 Nov 10 at 11:19 am
This policy sounds like the lump of labour fallacy.
Sinclair Davidson
10 Nov 10 at 11:21 am
Ken, A local writer on ‘rat race’ theory is Prof Kwang Ng at Monash University. The only reference I could find on the web is a specialised application:
http://ideas.repec.org/a/eee/matsoc/v26y1993i1p3-23.html
hc
10 Nov 10 at 11:37 am
Ken – gittins talks about the rat race motivating people, although he doesn’t use that terminology, he talks about keeping up with the Jones’s.
Sinclair Davidson
10 Nov 10 at 11:41 am
Yes, Sinc. he’s not really an authoritative source.
Y’know, in all my years I have never met anyone who tries to keep up with the Joneses or is into competitive consumption.
I know people who buy stuff that I think is junk (well, things that I’m not interested in) but they probably can’t see why I buy so many books and CDs and computers and running shoes.
BTW our daughter is married to a Frenchman and they say the expression “chacun a son gout” is not really a commonly used phrase in France.
ken n
10 Nov 10 at 12:10 pm
I certainly agree with Judith that the idea of a cap on working hours is totally bonkers. However, for her to imply that the French 35 hour week is responsible for “High rates of unemployment, appalling high rates of unemployment among minority groups … and a high incidence of long-term unemployment” is a long bow. Sure, it is one factor contributing, but there are many other labour market restrictions that play a part (to be fair, she did mention two of them (very high minimum wages and restrictions on firing)).
Mother Hubbard's Dog
10 Nov 10 at 1:41 pm
“Y’know, in all my years I have never met anyone who tries to keep up with the Joneses or is into competitive consumption.”
I don’t regard people doing this as a problem, just a fact of life, however I think you are a bit naive if you think people don’t do this.
Most people do in unconciously, but an old neighbour of ours was quite upfront about it when he came around one day and asked us if we wanted his four burner gas bbq, he said “It works fine but these days everyone has one of the big ones with the range hood for roasting so I had to get one of those.” I just said thanks.
Steve Edney
10 Nov 10 at 2:01 pm
Have these people EVER had a real job? Or just public service jobs, where if they’re not done come 5pm they get to clock off and just do it tomorrow?
Even just having had a ‘casual’ job sometimes involved working 12-hour days to make sure all our work (a pretty intense clinical trial with patients up until 9pm to fit everyone in within a deadline) was completed. Perhaps a bit much to say this, but I’d think Sponsor companies of clinical trials would rather send trials to other countries if we were legally required to just stop work come some arbitrary number of completed hours…
Joshua McD
10 Nov 10 at 2:43 pm
I didn’t say they did not exist SE, just that I had never come across on here or in any of the countries I have lived in or visited. Which suggests to me that the phenomenon is not all that common. Gittins and some others suggest it is just about universal.
I wonder if he considers himself over-working to keep up with his neighbours?
ken n
10 Nov 10 at 4:00 pm
Clarke says:
But generally the cause of trying to promote less work and more sloth is a worthy one in a prosperous society.
Lol… Aren’t you slightly conflicted, Harold seeing you recently reported, in you diaries from Beijing, that you’re working no more than 3 hours a week? Finding that tough? Life wasn’t meant to be easy, hey?
I notice you’ve again taken to abusing that fine economics term “externality” to mean anything you dislike or are against.
I urge you to stop cease and desist.
Look doofus, people should decide themselves their working hours not some far left institute or the government…
Externality… lol.
JC
10 Nov 10 at 4:35 pm
JC (Catallaxy’s resident moron) is rolling his eyes and frothing at the mouth while spilling out his vile, illogical abuse.
Will someone throw a bucket of water on this witless turkey?
hc
10 Nov 10 at 5:54 pm
Harry, Keep your shirt on, you loud mouthed sermonizing nincompoop.
95% of the time I’m simply using your own words against you, you over-promoted lazy slob.
Stop abusing economic terms and stop commenting about things you know nothing about as your understanding of economics is close to zero. No wonder you and Homer sound like twins.
JC
10 Nov 10 at 6:08 pm
JC (Catallaxy’s resident moron) is rolling his eyes and frothing at the mouth while spilling out his vile, illogical abuse.
Unlike you accusing the Troppo people of only siding with Labor because they take consultancies and abusing other commenters in that disgusting little England way of yours about their religious beliefs suggesting they were beaten by their parrnts because of it.
You really are a sickening disgusting creature.
JC
10 Nov 10 at 6:22 pm
It’s sorta fun in a perverse way – log onto Catallaxy, skip the article posts (which are mainly about dead or almost dead people) and just link onto JC or CL’s comments; they are invariably frothing at the mouth over some confected issue or another.
rog
10 Nov 10 at 6:44 pm
I’m shocked, shocked Wodgie agrees with Harry Patterson-Clarke.
One lives in fear of cow burps will cause the oceans to rise and the other one wants to start a tourist business in watching whales while they’re slaughtered.
And both think other people have issues.
JC
10 Nov 10 at 7:04 pm
Getting back to the point of the thread.
An interesting side-question is: how would these restrictions on working hours be policed, if for a nanosecond, you thought that this would be a good idea? Answer: THE WORKING HOURS POLICE. Now that’s a job creation scheme to die for.
I know that was said in jest but it’s actually not that funny as a number of French executives were fined for working longer prescribed hours by the work hours police. there was several reports of such events taking place.
JC
10 Nov 10 at 7:20 pm
Found a link.
http://www.mail-archive.com/pen-l@galaxy.csuchico.edu/msg34017.html
JC
10 Nov 10 at 7:24 pm
He isn’t a moron. Bad mannered, frequently rude, not always good at comprehending simple sentences, prone to attacking straw men, inclined towards a superiority complex, troubled by rapid shifts between the general and the specific, but not a moron. He actually has a reasonably okay intellect. His social deficits don’t negate that fact.
TerjeP
10 Nov 10 at 8:15 pm
Yes, I agree with Terje: moron is perhaps a smidgeon too strong.
The troll formerly known as Tom N.
10 Nov 10 at 9:13 pm
Can we agree on ‘Catallaxy’s resident dickhead‘?
Personally I don’t find it all that offensive – at my worst I think I often fit the bill – and contra ‘moron’, it’s all in the eye of the beholder… rather than a diagnosis of sorts.
Would you be happy with that JC?
FDB
10 Nov 10 at 9:23 pm
All this rapprochement going to end up in a group hug?
Sinclair Davidson
10 Nov 10 at 9:37 pm
Wow, the battered wives association thread. How good is that?
Fellas can I let you in on a little secret? Seen the Rhino on National Geographic? It’s hide is thinner than mine so don’t waste your time.
Tommy the concierge is even here now during his RDO.
Terge, the last person to be saying what you’re saying is you.
FDB, Please.
JC
10 Nov 10 at 9:51 pm
Don’t be silly. You can’t hug people on the Internet.
TerjeP
10 Nov 10 at 9:52 pm
“FDB, Please.”
Your wish is my command. From now on you are Catallaxy’s resident dickhead.
If it helps, I’ll cheerfully assume the mantle of Catallaxy’s resident lefty dickhead in honour of your humility in this matter.
FDB
10 Nov 10 at 10:11 pm
What is this new found aggression in pack formation, FDB? Are you actually trying to stare me down or something like that? Stop being an idiot.
JC
10 Nov 10 at 10:13 pm
It’s approach to nuanced conversation is also somewhat more subtle.
TerjeP
10 Nov 10 at 10:55 pm
It’s approach to nuanced conversation is also somewhat more subtle.
You mean like telling people to fuck-off in an email and also telling them to piss off on a thread.
You mean that sort of subtlety,do you?
Or do you perhaps mean the hypocrisy of Harry Patterson-clarke:
JC
10 Nov 10 at 11:10 pm
So much for the validity of that little secret about hide thickness. It seems you have a few tender wounds after all.
TerjeP
10 Nov 10 at 11:38 pm
lol.. Just presenting the double standards you and harry Patterson-Clarke seem to share. That’s all.
However in your defense I think that old buzzard is worse. Much much worse.
JC
10 Nov 10 at 11:48 pm
[...] Catallaxy, Judith Sloan is appalled by the Australia Institute calls for a cap on working hours. She argues that the institute’s [...]
Club Troppo » Missing Link Friday – 12 November 2010
12 Nov 10 at 10:30 am