FacebookTwitterGoogle+RedditEmail

Americans Work Too Long for Too Little

shutterstock_277320227

American workers annually work more hours than workers in any other post-industrial, “1st world,” country.  In 2014, an average American worked 1,789 hours per year or 34.4 hours per week, placing the U.S. at 17th in the OECD’s list of developed countries; German workers rank 1st in terms of the lowest total annual hours worked, nearly one-quarter less per year at 1,371 hours or 26.4 hours per week.

In the 2016 presidential campaign, job growth and the minimum wage are major issues, but job satisfaction and the workweek are non-issues.  Many Americans feel they are living in desperate times and it seems better to have no job than one that doesn’t pay a living wage or is fulfilling.  While the official unemployment rate is slowly falling, those no longer looking for work are increasing and wages remain stagnant.

In the seven decades since the end of World War II, the U.S. has lived two lives.  The first life occurred during the postwar era of recovery and prosperity popularly known as the “American Century” that lasted from 1945 to the mid-1970s; it is the era that Trump invokes when he opines about “Making American Great Again.”  The second phase evolved from the mid-‘70s through today and is marked to the eclipse of the short-lived “American Century.”

The decline in the quality of working life during the last seven decades is revealed by examining four key factors: (i) changes in the length of the workweek, (ii) productivity gains, (iii) wage stagnation and (iv) the rise of personal debt.  Together, they suggest a modest – if fundamental – way to begin to address the problem.  One suggestion is to drastically cut the workweek while maintaining current wages.

* * *

For many Americans, the 40-hour workweek remains the labor standard.  According to the St. Louis Federal Reserve, at the beginning of the post-WW-II recover, in December 1945, manufacturing workers worked 41.2 hours per week; seven decades later, in December 2015, little changed for manufacturing workers who worked on average 41.7 hours per week.  However, as the Fed makes clear, total workweek hours for all private sector workers declined by nearly a quarter to 33.8 hours.

The average workweek means little in itself, but its value comes in terms of two decisive factors, productivity and compensation.  A 2015 study by the Economic Policy Institute (EPI) found that while “net productivity of the total economy” for the period 1948 to 2014 grew by a staggering 238.7 percent, the “average hourly compensation of production/nonsupervisory workers in the private sector” grew by only 109 percent.

The EPI broke up this past seven-decade period into two subsets and assessed compensation and productivity accordingly: (i) 1948-1973: productivity increased by 96.7 percent an hourly compensation by 91.2 percent; and (ii) 1973-2014: productivity grew by 72.2 percent and hourly compensation increased by only 9.2 percent, a 90 percent decline.  It found that during the postwar era of the American Dream, from 1948 to 1973, ”the hourly compensation of a typical worker essentially grew in tandem with productivity ….”  However, in the four decades following 1973, productivity continued to rise but wages stagnated.

During this long postwar era, as the St. Louis Fed detailed in a 2012 report, consumer spending ceaselessly grew as a proportion of GDP:

* 1951-1960 = 62.3%

* 1961-1970 = 61.8%

* 1971-1980 = 62.5%

* 1981-1990 = 64.5%

* 1991-2000 = 67.3%

* 2001-2010 = 70.0%

In conclusion it warned:  “Can American consumers continue to serve as the engine of U.S. and global economic growth as the did during the recent decades?  Several powerful trends suggest not, at least for a while.”

How was consumer spending able to increase while wages stagnated?  The magic of postwar American life was debt.  Secured installment loans, including mortgages and car loans, predated the war; unsecured loans, including credit cards, student loans, paydays loans and lines of credit, followed.  And debt skyrocketed by nearly 65 fold; between 1952 and 2015, per person debt jumped from $160 to $10,600 – and this was during a period when the U.S. population only basically doubled from 156 million (1952) to 319 million people (2015).

* * *

In 1930, the British economist, John Maynard Keynes, predicted that within 100 years, the average workweek would drop to only 15 hours.  His forecast was based on a projection of a modest global economic growth of about 2 percent per year.  According to one scholar, Keynes believed that “in a world with so much wealth, we would naturally choose to increase our leisure time rather than simply accumulate additional wealth.”

Capitalism outsmarted Keynes.  While economic growth exceeded Keynes’ modest proposal, it fostered a postwar world in which people in the U.S. were seduced by all the sexiness, glitter and false consciousness of consumerism.  And while wages stagnated, people were enslaved by ever-mounting debt.  The year 2030 is only 14 years away, but it does not look like the 15-hour workweek is in anyone’s future.

It’s time to readjust the traditional relations between productivity, the workweek and wages.  In 2000, Eric Rauch wrote, “An average worker needs to work a mere 11 hours per week to produce as much as one working 40 hours per week in 1950.”  He adds: “if productivity means anything at all, a worker should be able to earn the same standard of living as a 1950 worker in only 11 hours per week.”

Globalization is restructuring capitalism and, with it, the U.S. economy.  It is fueling the rise of inequality, refashioning social relations and increasing the wealth and power of the 1 percent.  It is also transforming work-life.

So why not rethink the relation between the workweek and compensation?  The push for the $15 per hour minimum wage is a noble effort, one that brings real benefits to the lowest sector the working class.  Switzerland failed effort to provide a basic income of about $2,500 a month (2500 Swiss Francs) suggests a new way to think about income; Andy Stern, the former SEIU president, recently suggested a U.S. version, but for about $1,000.

While well intentioned, these proposals don’t go far enough.  One way to secure the benefits of the enormous productivity gains that have taken place since 1975 is to cut the workweek without cutting wages.  For example, what if manufacturing workers currently (2015) working 41.7 hours per week had their workweek cut to, for example, 20 to 25 hours but kept the same salary?; similarly, what if private sector workers working 33.8 hours could have their workweek cut to 15 to 18 hours at the same salary?  The business sector could take full advantage of productivity gains without having to increase wage expenses.

Such a scheme is, of course, utopian – and intentionally so.  But maybe that’s what’s needed in a time marked by dire predictions as to the nation’s economic future and the lack of real political imagination.

More articles by:

David Rosen is the author of Sex, Sin & Subversion:  The Transformation of 1950s New York’s Forbidden into America’s New Normal (Skyhorse, 2015).  He can be reached at drosennyc@verizon.net; check out www.DavidRosenWrites.com.

July 18, 2018
Bruce E. Levine
Politics and Psychiatry: the Cost of the Trauma Cover-Up
Frank Stricker
The Crummy Good Economy and the New Serfdom
Linda Ford
Red Fawn Fallis and the Felony of Being Attacked by Cops
David Mattson
Entrusting Grizzlies to a Basket of Deplorables?
Stephen F. Eisenman
Want Gun Control? Arm the Left (It Worked Before)
CJ Hopkins
Trump’s Treasonous Traitor Summit or: How Liberals Learned to Stop Worrying and Love the New McCarthyism
Patrick Bond
State of the BRICS Class Struggle: Repression, Austerity and Worker Militancy
Dan Corjescu
The USA and Russia: Two Sides of the Same Criminal Corporate Coin
The Hudson Report
How Argentina Got the Biggest Loan in the History of the IMF
Kenn Orphan
You Call This Treason?
Max Parry
Ukraine’s Anti-Roma Pogroms Ignored as Russia is Blamed for Global Far Right Resurgence
Ed Meek
Acts of Resistance
July 17, 2018
Conn Hallinan
Trump & The Big Bad Bugs
Robert Hunziker
Trump Kills Science, Nature Strikes Back
John Grant
The Politics of Cruelty
Kenneth Surin
Calculated Buffoonery: Trump in the UK
Binoy Kampmark
Helsinki Theatrics: Trump Meets Putin
Patrick Bond
BRICS From Above, Seen Critically From Below
Jim Kavanagh
Fighting Fake Stories: The New Yorker, Israel and Obama
Daniel Falcone
Chomsky on the Trump NATO Ruse
W. T. Whitney
Oil Underground in Neuquén, Argentina – and a New US Military Base There
Doug Rawlings
Ken Burns’ “The Vietnam War” was Nominated for an Emmy, Does It Deserve It?
Rajan Menon
The United States of Inequality
Thomas Knapp
Have Mueller and Rosenstein Finally Gone Too Far?
Cesar Chelala
An Insatiable Salesman
Dean Baker
Truth, Trump and the Washington Post
Mel Gurtov
Human Rights Trumped
Binoy Kampmark
Putin’s Football Gambit: How the World Cup Paid Off
July 16, 2018
Sheldon Richman
Trump Turns to Gaza as Middle East Deal of the Century Collapses
Charles Pierson
Kirstjen Nielsen Just Wants to Protect You
Brett Wilkins
The Lydda Death March and the Israeli State of Denial
Patrick Cockburn
Trump Knows That the US Can Exercise More Power in a UK Weakened by Brexit
Robert Fisk
The Fisherman of Sarajevo Told Tales Past Wars and Wars to Come
Gary Leupp
When Did Russia Become an Adversary?
Uri Avnery
“Not Enough!”
Dave Lindorff
Undermining Trump-Putin Summit Means Promoting War
Manuel E. Yepe
World Trade War Has Begun
Binoy Kampmark
Trump Stomps Britain
Wim Laven
The Best Deals are the Deals that Develop Peace
Kary Love
Can We Learn from Heinrich Himmler’s Daughter? Should We?
Jeffrey St. Clair
Franklin Lamb, Requiescat in Pace
Weekend Edition
July 13, 2018
Friday - Sunday
Brian Cloughley
Lessons That Should Have Been Learned From NATO’s Destruction of Libya
Paul Street
Time to Stop Playing “Simon Says” with James Madison and Alexander Hamilton
Jeffrey St. Clair
Roaming Charges: In the Land of Formula and Honey
Aidan O'Brien
Ireland’s Intellectuals Bow to the Queen of Chaos 
FacebookTwitterGoogle+RedditEmail