July 10, 2015
Dean Baker
The Guardian, July 10, 2015
View article at original source.
Governor Jeb Bush announced that he thinks people should work more hours in a campaign speech this week. This puts him in direct opposition to the two leading contenders on the Democratic side, both of whom are pushing proposals that will allow people to work less. This could mean that 2016 will be an election in which work hours play a central role.
Starting with Bush’s position, the comment came in the context of a speech where he was listing the things that we need to do to reach his target of 4.0 percent annual GDP growth “as far as the eye can see.” Bush said that we need to increase labor force participation, work longer hours, and increase productivity.
This is not the first time that Bush said that he thought people should work more. He previously argued for raising the normal retirement age for Social Security.
The sight of someone who was raised in privilege, and relied on family connections to make his careers in business and politics, telling the rest of the public they have to work more, will make good fodder for Governor Bush’s political opponents. But this position is actually held by many people in policy circles in both political parties.
The argument is that we need more workers in order to sustain economic growth, even if almost no one thinks Bush’s 4.0 percent growth target is remotely plausible. In particular, they argue that as we see an aging population, we will have to keep people working to older ages and get also to get more hours of work from them each year until they do retire.
This view is striking given that the United States and most of the rest of the world has been suffering from the opposite problem for the last eight years. The United States, Europe, and Japan all have fewer people working than would like to work because there is insufficient demand in the economy. The problem our economies are facing is that we don’t have enough jobs.
In fact, one of the lines that is getting widely (and wrongly) repeated is that none of us will have work because robots are taking all the jobs. Obviously we can’t both have a shortage of workers and a shortage of jobs at the same time.
While the robots taking all our jobs story is an exaggeration, the basic point is right. We are seeing rising productivity through time, which means that we can produce more goods and services with the same amount of work. This is the basis for rising living standards.
Historically, we have taken the benefits from higher productivity in both higher pay and more leisure. If we go back a century, work weeks of sixty or even seventy hours a week were common. While our workweek has been largely fixed at forty hours a week for the last seventy years, other countries have pursued policies to shorten the work week and/or work year. These policies include paid sick days, paid family leave, and paid vacation.
Several European countries have actively pushed policies of work sharing as an alternative to unemployment. In this case, the government compensates workers in part for a reduction in hours as opposed to paying unemployment insurance to someone who has lost their job. Germany has paved the path on this policy, which is an important factor in its 4.7 percent unemployment rate.
As a result of work sharing and other policies, the average worker in Germany puts in almost 25 percent fewer hours each year than workers in the United States, according to the OECD. Most other wealthy countries are close to Germany. In the Netherlands, the average work year is 21 percent shorter than in the United States. In Denmark, it is 20 percent shorter than in the United States.
The leading Democratic contenders are proposing policies to get the United States more in line with the rest of the world. Secretary Clinton has indicated she will support paid family leave and paid sick days, although she has not yet produced specific proposals. Senator Bernie Sanders, the other leading contender, also supports paid family leave and paid sick days. In addition, he recently put forward a proposal guaranteeing all workers two weeks a year of paid vacation. That might seem like small change compared to the five to six weeks a year that is now standard in Europe, but it would be a huge gain for tens of millions of workers.
There is a long way yet before the parties select their nominees, but if the general election ends up being a contest between Jeb Bush and either Clinton or Sanders, it will present the country with an unusually clear choice. We will have one candidate who wants people to work more hours and retire later, and another candidate who wants to put in place policies so that people can work less. That will make for an interesting election.
