Introduction

Labor economists of all persuasions are increasingly recognizing that employment relationships can be characterized as an effort bargain. Whether the analysis takes the form of gift exchanges, efficiency wages, or the economics of agency and signaling, the outcome hinges on the level of effort elicited from employees. Although these research streams have only recently found a footing in the mainstream economics profession, the importance of the effort bargain has long been espoused by Marxist and Institutionalist economists. Marx distinguished between labor and labor power over 200 years ago, and Institutionalist thinkers, such as Clark Kerr, Lloyd Reynolds, and John Dunlop, began articulating an efficiency wage theory as early as the 1950s. Recognition of labor relations as an effort bargain has become vitally

important to private and social productivity improvements in a post-industrial economy in which few workers directly produce tangible outputs. Moreover, as workers in advanced countries begin to place less emphasis on future wage increases-realizing rapidly diminishing returns when trying to “buy happiness”—employment negotiations will need to focus more attention on working conditions than wages. Work time is one condition of work that has been relatively unexplored as part of the effort bargain. Since the social division of labor determines both the magnitude of productivity gains and how those dividends are shared, it represents a profoundly important social compromise. The central premise of this book is that in a post-industrial, climate-constrained world of material abundance, employers, governments, workers and other concerned social parties will need to be increasingly experimental in terms of work time organization and regulation in order to promote greater socioeconomic participation in a manner that is socially and

environmentally sustainable. That is, employment relations should be conceptualized as a social effort bargain to be regulated in the public interest. Throughout the history of capitalism, a variety of methods and tactics

have been used in an attempt to achieve greater harmony in the social effort bargain. Welfare capitalists attempted to buy the loyalty of the worker. When that failed, behavioral scientists (like Frederick Taylor) sought nonmaterial motivations to increase productivity. Using notions such as “employee participation,” theorists hoped that the social pressure of work groups could substitute for the missing loyalty to management. However, the human relations approach to greater employee participation was widely recognized as pre-emptive action against unions and the productivityenhancing exit/voice option that they provide their members. Presently, the search continues for a suitable social balance in the effort bargain. As Thompson (1983: 151) writes, “methods of increasing productivity largely fall within a spectrum that ranges from directly controlling the worker to attempting to gain some sort of voluntary commitment to production goals through earning their gratitude and loyalty or helping to make work more pleasant.” Both common sense and the emerging evidence from work time experiments (featured in Chapter 5) suggest that an effective way of making work more pleasant and productive is to make it less extensive for any one individual. The boundaries within which the social effort bargain takes place greatly

influence the potential outcomes. For example, if long hours are the only option on offer, workers will adjust their effort accordingly and private productivity rates will suffer. Long hours and low productivity growth rates will then create negative externalities for society as overworked parents, citizens, and volunteers will be less effective in their non-paid, but fundamentally important, social tasks as well. Alternatively, if the negotiation zone is limited to moderate hours that are deemed to be socially and environmentally sustainable, both private and social productivity rates could burgeon. Since the social effort bargain has a vital impact on living standards and wellbeing, the State has a justifiable interest in promoting an outcome that reflects a collective settlement between employers, employees, families, communities, and future generations. Given the profound ramifications of the social effort bargain, this book addresses the potential for the regulation of work hours to achieve the widely held macroeconomic objectives of full employment, price stability, and adequate growth in a socially and environmentally sustainable manner. In post-industrial societies, work time is no longer governed by the exi-

gencies of the factory system. The vast majority of the labor force engages in non-mechanical work that can be performed at different times and with varying degrees of proficiency. The diversity of average annual work hours across Organization for Economic Co-operation and Development (OECD) countries, suggests that a great variety of work time regimes are capable of propelling the industrial system. As indicated in Chart i.1, many workers,

Regulation – The

particularly in English-speaking, Anglo-Saxon countries, tend to work 30 to 40 percent more hours than workers in Scandinavian and Central European countries. In some cases the longer hours translate into greater gross domestic product and higher output per worker, but this tends to occur at a diminishing rate with each additional hour of work. Annual reports from the International Labour Organization regularly observe that labor productivity per hour is routinely higher in short-hours countries like Germany and France than in countries where workers log nearly 30 percent more hours per year (Boules and Cette 2005). Many advanced economies are also characterized by growing labor

market inequities fueled by a polarization of work hours around a rather stable average workweek. Citing a deteriorating link between aggregate income and well-being and a limited ability for the ecosystem to absorb more industrial waste, an expanding group of social scientists has begun to challenge contemporary growth patterns. Moreover, the track record of traditional macroeconomic policies shows little promise of ever vanquishing the twin problems of unemployment and inflation. In wealthy countries, therefore, the efficacy and desirability of traditional demand stimulus (Keynesian) policies to address an underutilization of labor is suspect. A growing chorus of social critics is recognizing that stimulating greater throughput may marginally tighten labor markets, but it also results in longer hours for the already overworked and greater degradation of a fragile environment. This discourse therefore contends that conventional full-employment policies result in a mal-distribution of work time and a treadmill pattern of

consumption that is socially and environmentally unsustainable. As such, the lodestar of employment policy in post-industrial societies should be the enhancement of socioeconomic participation, which entails more remunerative work for some, but less for others. Given the failure of conventional macroeconomic policy to address the

socioeconomic and environmental exigencies of post-industrial economies, reform of the social division of labor represents one of the most important public policy issues of our time. This book proposes an alternative distribution of labor as a means of affording individuals a more sustainable engagement in both the paid workforce and the third sector-the realm of activity conducted independently of the market and the public sector. The narrative maintains that a policy of work time regulation is a superior way of achieving greater socioeconomic participation than competing full-employment plans-such as job or income guarantees-that rely on greater economic growth and the creation of more employment hours in the aggregate. Since a truly sustainable employment policy will need to alter the existing distribution of social labors as well as the social psychology of economic gain, an hours-based regulation of the labor market is the most appropriate way to promote greater harmony between lives and livelihoods. Although numerous social scientists have marshaled the “well-being” and

“environmental” critiques of the sustainability of market capitalism to advocate for work time reduction, this thesis builds on that logic by showing that work time reform under a desideratum of improved socioeconomic participation is consistent with sustainable macroeconomic policy objectives. Significant space is devoted to the development and critique of the political economy of working time as macroeconomic imperialism has been known to trump progressive social and ecological concerns throughout the history of capitalism. Greater social inclusion through work time reform will only come to fruition if the vested social partners of market-based societies are convinced that a reformation and regulation of our social labors will result in broad-based socioeconomic improvements. Given the current social psyche, such persuasion must begin with the ubiquitous macroeconomic concerns that permeate the lives of all citizens before the social, philosophical, psychological, ethical and ecological arguments in favor of work time reform can have their full and rightful influence. Thus the salient contribution of this work is the exposition and advocacy of the macroeconomic possibilities of work time regulation. Experiments with work time reduction and work sharing suggest that a

comprehensive work time regulation regime could have substantial employment effects and a stabilizing influence on economic performance. Moreover, hours regulation that linked future labor productivity increases to work time reduction could be viewed as an egalitarian incomes policy designed to stabilize prices, equitably reward the working class (which has been deprived of their fair share of productivity dividends since the late 1960s), and curtail the most neurotic aspects of the “work and spend” culture. It is important to

Regulation – The

note that hours regulation does not always entail a reduction of hours. Although the secular trend would be towards shorter average workweeks, extraordinary conditions may arise in which society would choose to postpone hours reduction or even increase average workweeks. As traditional work becomes more scarce and material goods more abun-

dant, social scientists will be forced to rethink the role of remunerative employment in post-industrial economies. Intent on expanding participation levels in highly productive market democracies, policymakers will have to make important decisions in striking a balance among several competing social pressures. Should public policy encourage more private jobs and throughput, grant individuals access to participatory income, expand public sector employment, regulate work time with an eye towards payroll expansion, or pursue a hybrid combination of these policies? Although there may be great merit in pursuing a suite of labor market policies, this research endeavors to show that a policy of work time regulation offers the best chance of achieving the objective of enhanced socioeconomic participation in an environmental and socially sustainable manner than any one of the competing policies on its own.1