Monthly Proposal No.2: reduce daily and weekly working time for efficiency and flexibility

To face and fear an ongoing rise in unemployment is definitely not a new issue for European governments. The same can be said about economic crises. But still there is an unusual heat in the recent corresponding political debates. Why?

On the one hand, there is still no sign for a substantial as well as sustainable upswing. On the other hand, the discussion about the excessive public debt sensitized voters to the affordability of the welfare state. So on aggregate level, the scope for compensating public measures gets more and more restricted.

However, an awakening also takes place on an individual basis. Partly, this is because an increasing share of people becomes aware of the fact that persistent unemployment is not an unlikely individual fate anymore. Furthermore, the presence of these fates in the media or even the neighbourhood additionally sensitizes them to the fact that public transfers alone are just a short-term solution and do not compensate for all the sacrifices and dependencies of the unemployed or even poor anyway.

Facing this strain many of these people work extra hours and burn themselves out, while others get sick by being excluded. In this sense, labour markets incorporate another dimension of unequal distribution. It can be argued that this exploitation of overworked employees on the cost of the unemployed rest is inefficient too.

Taking a normative perspective, one just could say, that there are no winners among allworkers. While the unequal distribution of wages favours one worker against another, in the end the unequal distribution of working time seems to just reinforce the market power of firms. Taking a more positive perspective, one could add the argument that with additional working hours, productivity decreases. Reducing the former should therefore increase average as well as marginal output per employee. Also, less loaded workers are healthier and more likely to invest in their training and education.

After all, in the long run even the economy as a whole will benefit from a lower and stricter boundary for contracted hours. Splitting the portions and increase the availability of them should even favour the flexibility of their use, corresponding services and their consumption. Stop arguing with old fashioned assumptions about preferences and competition. Get serious, rethink welfare, consider sustainability and reduce daily and weekly working time!

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