LABOUR-EUROPE: Can Shorter Working Weeks Cut Jobless Queues?

By Tito Drago Reprint | | Print |

Tito Drago and Dipankar De Sarkar

MADRID/LONDON, Nov 27 1997 (IPS) - In Spain, where there are more unemployed than anywhere else in the European Union — but where they work longer days than in most countries in the bloc — the idea of cutting working hours to create new jobs for others has appeal.

Spaniards work an average 40.7 hours a week, just above the EU average, and more than Italians, Germans and the French. But Spain is also the EU country with the highest unemployment rate, at 19.8 percent, well over an EU average of 9.6 percent.

Accordingly leftists see an enforced cut in hours as a simple way of redistributing available work between those who have too much of it and those who need more. Some Spanish deputies like Pedro Vaquero say the measure could create a million jobs in the country, if the costs of the extra hours’ work are offset with taxes.

In France, where plans to cut the working week from 39 hours to 35 are in hand, the government says it can cut hours without loss of pay for workers or business competitiveness. They cite estimates that it could create an extra 1.4 million jobs over five years.

Unemployment torments the EU, and it’s just not very good at creating jobs. In the United States new employment has risen 80 percent over the last 35 years compared to just ten percent over the same period in the EU.

The reason for this, say European business leaders and centre- right governments, is the deregulated U.S. job market gives private industry the freedom to employ as they like. Hence the private sector’s reaction against new laws that set working standards.

Spain’s Secretary General of Labour, Manuel Pimentel, and Jose Maria Cuevas, President of the Spanish Confederation of Business Organisations, say it will increase labour costs, reduce productivity, put off foreign investors and add to unemployment.

The strongest reaction has come from France and Italy where leftist governments last month announced plans to introduce a 35- hour week by 2000 and 2001 respectively. Jean Gandois, head of France’s main employers’ organisation, quit over the issue; the Italian bosses’ federation says the shorter week would raise labour costs by 10 to 12 percent without creating a single new job.

According to Peter Robinson, senior economist at the left-of- centre Institute for Public Policy Research in London, if hours are cut but wages stay the same, any overall economic benefits from increased of employment will be offset by labour costs.

Of course if workers also took a cut in wages alongside reduced working hours, then it could result in higher employment and economic benefits. But that, the economist said, rarely happens.

French trade unions have already been told they will have to accept strict wage rise restraints for several years if the hours are cut. This could result in a cut in wages in real terms, and they are deeply unhappy about the idea.

“For me,” Pietro Larizza, leader of the UIL labour confederation said last month, “the promise of a cut to 35 hours by 2001 presents disadvantages for employment, not benefits, especially in the south (of Italy).”

Thus both the French and Italian governments are already busy qualifying their pledges. The government of French premier Lionel Jospin plans only to set the 35 hour working week as an ‘objective’ in a law to be sent to parliament next spring. The precise terms will be set in a second law to be adopted in late 1999.

That leaves plenty of scope to negotiate exemptions in the meantime. Public sector employees and employers with 20 or fewer staff may be exempted, plus managers and those working paid overtime, and the hours may be worked out over a year instead of the less flexible weekly target.

Italian premier Romano Prodi tabled the 35-hour week partly to buy off hardline Communists in parliament, and he is equally imprecise about the details. He suggests a conference between unions, government and industry to work them out.

Even the EU, meeting in Luxembourg last week to devise a major region-wide action plan to combat unemployment, steered well clear of endorsing the 35 hour week. The EU’s executive Commission organised a 40 hour working week for the 15 nation bloc a few years ago, but filled it with loopholes to suit the different working styles of its peoples.

“If we are look at France, where you had a reduction in the 1980s, it continues to have one of the poorest employment records in Europe,” said Robinson. “It was not at all obvious the last time around that reducing working hours boosted employment significantly.

“No one in Britain believes that this is a solution, neither any of the political parties, nor the trade unions, nor employees.”

Britons work longer hours on average that anyone else in Europe (43.9 hours) and there only two percent of firms canvassed in a recent survey had cut working hours, But alternatives are still being considered.

According to an annual survey of hours and holidays by independent British researchers Incomes Data Services, annual holiday entitlement in Britain has grown, with 25 days annual leave in addition to public holidays now seen as normal. Many companies now offer sabbaticals, which over a period of five to 20 years can take an employee’s total annual holiday to 30 days or more.

Some firms, particularly those with large staffs on low-to-middle scale wages, have found it easier to cut hours. The London Underground rail network, which is committed to cut the basic week to 37 hours in January and to 36 hours next September.

In France and Italy the governments there say the key to placating both business and labour is negotiation, with cuts in hours accompanied by wage restraint pacts and guarantees of social protection as part of a national plan. The oft-cited example is that of the Dutch, which negotiated just such a deal several years ago.

The Dutch make much of part-time work and job-sharing arrangements to sharing limited job opportunities around. Thirty eight percent of Dutch workers are part-time, as opposed to 16 percent of French.

And Spain plans the creation of a million shorter hour ‘social jobs’ before the year 2000. They include jobs such as child care, help for the elderly and programmes to boost the work of non- governmental organisations (NGOs) which employ 100,000 people in Spain, with another 300,000 working as volunteers.