Why do We Seek so Much Work?
Keith Rankin, October 30, 1995
Time Poverty and Overwork
Since the 1950s, we have felt obliged to work many more hours to support ourselves. Nuclear families in 1995 need to commit about 70 hours to the market economy to maintain relative living standards that could be bought, 30 years ago, with 40 hours work. Men and women of all ages are working harder and longer. The problem is not just the length of the work week; it is the length of our whole working lives, manifest in the raising of the age of entitlement to national superannuation, and in the pressures for students to spend time and borrowed money learning skills which reflect other people's values, market values. Time, like money, is becoming a commodity that we spend.
This propensity to work long hours has intensified in New Zealand in the last five years, following trends which first emerged in the USA. Indeed, the entire economic growth in New Zealand in the 1990s can be explained by increased hours of paid and unpaid work; by an attempt to escape money impoverishment by burdening ourselves with time poverty. While some of us have averted money poverty - or indeed become money rich - via this strategy, our society as a whole is getting more money poverty and time poverty. We acquiesce in a state of what Wallace Peterson calls "silent depression".
The problem of time poverty - of having little quality time for ourselves and our families - does not just relate to the hours that we formally cede to our employers or clients. It also includes the time we commit to making ourselves employable, seeking employment (or additional employment), getting to work and blobbing out from the pressures of work. Time poverty reflects not only a shortage of time but also any excess of time we waste in involuntary unemployment and unrewarding housework. Overwork (say 70 plus hours per week per family) and underemployment are aspects of the same problem, a failure of the labour market by which excess labour supply and weak labour demand reinforce each other.
A time-rich society - like New Zealand in the 1920s and 1950s - is a society with a lot of "voluntary unemployment". Indeed, the 1950s' baby boom was in part a result of women and men making choices to have more children as a way of using the historically unprecedented amount of available time. A time-poor society, on the other hand, is one that lacks a leisure culture; a society that does not value non-market activity and does not give priority to leisure time. The word "leisure" incorporates all activities (whether they involve effort or relaxation) that we do for ourselves, or, as gifts, for others. Leisure is never "mere leisure". Market culture debases our language. Leisure includes our personal life-projects, eg writing poetry, restoring old motorbikes, climbing mountains, participation in sport.
The best known book on the topic is The Overworked American (1991) by Juliet Schor. Schor is unequivocal. People work longer if there is a fall in the price of work - in the inflation-adjusted hourly wage rate. Time poverty arises from money poverty; labour supply increases when real wages fall. There is no simple trade-off, however, between time poverty and money poverty, because time poverty - an oversupply of labour - also causes money poverty by causing wage rates to fall. Such a vicious cycle, if not arrested, constitutes a Malthusian crisis.
The problem of overwork is much greater in America than in Western Europe. In the USA, unions are weak and the struggle for a shorter working week long disappeared from union culture in the 1940s. In economies dominated by market culture - ie the Anglo-Saxon economies - unfettered labour markets are "buyers' markets". This inherent power imbalance of labour markets has been countered in the past by five factors - access to freehold land, guild regulation, unionisation, government intervention and the welfare state.
Overwork has emerged as a considerable surprise, given our success during the early part of the century in reducing hours of work, and the still strongly-held belief that labour-saving technology must eliminate work and create leisure. From the 1890s to the 1940s, the length of our working lives fell dramatically. This fall did not happen as a direct result of technological progress. It was more a result of workers reclaiming, through intense struggle, the leisure that landlessness had deprived them of. The industrial revolution - a product of capitalism and landlessness - brought about a cash rich consumer society that persuaded people to value money over time. In the nineteenth century, that proved to be a wise choice; the productivity dividend resulting from that choice made it possible for us to have more money and more time. Market culture - in narrowing our interpretation of the work ethic and thereby making us reluctant to accept our time dividend - is causing us to lose the Faustian wager that underpinned the industrial revolution.
Overwork as a Malthusian Crisis
Pressures in late 18th century Britain arising from capitalist land enclosures led to the emergence of rural cottage industry. This "proto-industrialisation" featured low death rates (thanks to its rural setting, away from the urban guilds that had controlled manufacturing), high birth rates (thanks to the emergence of labour as families' only resource) and increasing working hours as cottagers competed against each other for contracts with the merchant employers who supplied their materials and bought their finished products. The labour market in Britain became unstable, food prices rose, real wages fell, labour supply increased, wage rates fell further. A Malthusian spectre emerged over Britain, in the form of an emerging crisis of population growth and overwork. Indeed Malthus himself emerged in 1798, giving a legacy which caused economics to come to be known as the "dismal science".
An earlier crisis of excess labour in medieval Europe was resolved by the bubonic plague which swept across Europe from Asia, killing perhaps 40% of Europe's population, and keeping its population low for two centuries. The "Black Death" heralded an age of leisure in the 15th century, an era in which food wages were high and land rents were low. People aspired to enjoy life while it lasted because the plague was an ever present threat. Labour supply came to be seen as "backward-bending": families worked less when wages increased; families worked longer hours only when they didn't have what they regarded as basic material needs.
In 17th century France, a Malthusian crisis resolved itself with little drama, thanks to a less market-oriented system of farming than that which was emerging in Britain, and thanks to the practice of contraception. France in the 17th century had double the population density of England; now it has half England's population density, despite experiencing less emigration than any other country in Europe.
(Catholic countries have actually had some of the lowest birth rates in the world - France in the 18th and 19th centuries, Argentina and Uruguay in the 1930s, and Italy in recent years. The views that capitalism and contraception have Protestant origins have been discredited. Capitalism emerged before the Reformation from the Catholic cities of south-west Europe. Protestantism seems more capitalistic because it lacks a leisure ethic. An interesting history of the emergence of market culture is Albert Hirschman's The Passions and the Interests. Modern workaholism represents the ongoing victory of the "Interests".)
The principal response to the emerging Malthusian crisis in the United Kingdom in the late eighteenth century was industrialisation, a new variant of capitalism. A population already subject to harsh work discipline was ripe for the transfer to a factory system. The necessary inventions, energy supplies and water transport infrastructure were - by chance - all already available in the one small country. The resulting increase in productivity eventually brought about a change in the balance of the labour market, giving wage workers the ability to act in a way that could influence the setting of prices, especially the price of their own labour. Nevertheless, despite industrialisation, the Malthusian crisis featured famine and extreme poverty in the populous food-exporting regions (Ireland, South West England), and mass emigration (especially from the Scottish Highlands, rural southern England, and Ireland).
A Malthusian crisis is not necessarily a crisis of overpopulation or of aggregate food shortages: it is a crisis of overwork and low wages reinforcing each other, preventing ordinary people from satisfying their basic economic needs. The United Kingdom in the 1790s was not an overpopulated country. But it was a society of high and increasing levels of inequality.
Hours of work were long in the "new world" in the 19th century because the pioneers had a frame of reference which regarded long hours as normal. Nevertheless, because they were trying to escape the overwork trap, it was in places like the USA and New Zealand that pressures were strongest for the 40 hour week, the 8 hour day and the family wage that would make it possible for wives and daughters to take advantage of a new economic order that would involve minimal paid work and also less housework. Furthermore, men would be able to become "family men" in a more complete sense than as mere providers. That ideal, antiquated today because of its explicit gender roles, constituted a genuine leisure culture. Our challenge today is to create a new culture based on a positive valuation of non-market activity.
A Contemporary Malthusian Scenario?
Today, the land-rich comparatively underpopulated countries of Latin America have the world's most Malthusian cities. The anarchy of Rio de Janeiro featured in a BBC Panorama documentary "Pulp Future" (30/8/95). In New Zealand today, Malthusian crisis is held at bay by a set of fragile institutions, together known as the welfare state.
There is evidence of an emerging Malthusian scenario in the USA and Great Britain. The crisis is becoming apparent through increased time poverty in all its forms, through rising death rates of young men; it is becoming apparent as we talk of the "post-antibiotic era" and the growing significance of immune-deficiency disorders. And it is manifest in the appearance of "additional workers"; historically women entering the workforce to enable the family to balance its budget but also manifest in delayed family formation, delayed retirement, farmers seeking off-farm income and other forms of moonlighting. The government's recently announced employment package (19 October) accentuates the added worker effect by requiring spouses of unemployment beneficiaries to give up their non-market activities and seek market work.
There are two important areas for optimism in New Zealand. One is my belief that the present attack on the welfare state will prove to be a "self-refuting prophecy" [NZPR September 1995], not unlike Malthus' call for "moral restraint" that helped to generate an alternative solution, the contraceptive industry. An emerging crisis becomes an opportunity that can be grasped by a society with intellectual capital. The attack on the welfare state is generating alternative solutions to those proposed by the attackers.
The other area of optimism relates to New Zealand's Tangata Whenua and Pacific Island communities. For a number of historical reasons, these two groups are disproportionately represented in New Zealand's deprived underclass. Therefore, the social ills of our society are over-represented in the Maori and Pacific Island populations. However, Maori suicide rates are much lower than those of pakehas, the cause of Maori suicide is much more likely to be hanging (as in jail), and the death rates of young Maori (aged 1-14, 15-24) are significantly lower than for non-Maori of the same ages. Crime rates are no higher in the North Island than in the South Island, which has a much lower Maori/Pacific population and a lower unemployment rate.
The issue of poverty-related stress and rising death rates of young (15-44) men was addressed succinctly in a recent BBC Panorama documentary (6 September). In New Zealand, a similar trend to rising death rates of young men has been halted, while rising suicide rates and irresponsible life styles increasingly plague affluent white communities such as Auckland's North Shore (Sunday Star-Times, 29 October). It is communities like the North Shore where children are most liable to time-neglect from money-rich time-poor parents.
While the lowest socio-economic class is generally a more violent place than the middle class - and is over-represented by Maori - the Maori underclass may be less dysfunctional than the pakeha underclass that characterises South Island cities. Polynesian communities seem to be both more resilient to money poverty and more resistant to time poverty. They have a culture that, while not rejecting market work, also reserves a substantial role for non-work and is perhaps better able to generate role models whose mana derives from unpaid activities. Otara is not like Drumchapple in Glasgow, where poverty-induced stress is a major killer. Patea, a former company town, is much more vibrant than Shildon, County Durham which is becoming a ghetto of dependent demoralised young men (BBC Panorama documentary, October 19).
The Causes of Overwork
Chronic unemployment is the major factor that denies workers adequate wages. Contrived weaknesses in labour demand (eg arising from the Reserve Bank Act) generate low and unstable "market-clearing wages" (what the Business Roundtable regard as full employment wages which, given an oversupply of workers without scarce skills, tend to be below the statutory minimum wage) and high "employment rents" (the privilege to existing workers of being on an above-market-clearing wage). Another cause of instability is the removal of government regulations that, among other things, recognised the social value of union activity. Thus the Employment Contracts Act (ECA) is a critical part of an environment that has caused the real hourly wage rate to fall and hours supplied to rise.
(When labour demand has been high - as in the years before World War I - it was workers rather than employers who fought bitterly for an ECA. Also, in principle, the ECA does make it easier for workers to break ranks with other workers and work fewer hours, via the use of individual contracts. It is just that 1990s' conditions have meant that workers have wanted more hours, not fewer, and the ECA has facilitated that wish.)
In economics, a "rent" is a privileged income. Workers who keep their jobs while their colleagues lose theirs gain an employment rent - the privilege of holding a wage while many others do not. Employers usurp that rent by cutting wage rates (or by not granting wage increases that would have otherwise been granted), by removing penal rates for overtime or public holidays, and by expecting their salaried employees to work longer and harder.
The effect of employment rents is to give "productivity dividends" only to employers and their creditors in the form of investment income. Juliet Schor notes that, had we received the productivity dividends we have earned since the 1940s as leisure, families (Mum and Dad combined) today could be working a 20 hour week, or a 6-month year, or enjoying sabbaticals in alternate years, or retiring at 40. As it is, employed young men are working longer than at any time since World War 2, for the same real wages they gained in the 1960s.
Arguing from a perspective of market justice rather than market power, Philippe van Parijs sees the existence of employment rents as the ethical basis for a universal basic income; ie that productivity dividends should be distributed to the public rather than to capitalists (much as Henry George, popular in New Zealand in the 1890s, believed land rents should be distributed as social dividends). Van Parijs argues that people who choose to surf all day appropriate a much smaller share of society's resources than do the capitalists who as employers (or indirectly as investors) exploit the environment and the asymmetries of the labour market.
There are causes of overwork other than low wages and employment rents, which affect (indeed increasingly define) the higher socio-economic classes. Professional overwork can arise from the low status and low enjoyment attributed to activities that are classed as non-work. A number of authors (eg Juliet Schor, Robert Lane, Fred Hirsch) have noted that we are to a large extent motivated by relative rather than absolute well-being. Thus, once we have achieved our basic needs, we keep working to maintain or improve our places on the social pecking order, and to dislodge our rivals. The material trappings of status become more important than the enjoyment of activities unrelated to our careers. The psychology of market culture, that only market work gives us social standing, leads to the selection of very narrow personality types as success role models. We feel pressured to emulate the workaholics.
The Cure for Overwork
The most obvious cure for overwork is shorter working hours. European "New Left" writers such as Andre Gorz emphasise the institutional arrangements that might bring this about. Labour market researchers [eg Sylvia Dixon] point out that the underlying problem is workers' unwillingness to accept an income cut.
The basic solution is to reverse the underlying trends of the last 30 years, and to work the backward-bending nature of labour supply towards the goal of full employment without overwork. We need to drive wage rates up by some of us supplying less labour to the market. That means that some people must we willing to accept reductions in their material living standards, relative to others' living standards. Having achieved higher wage rates by such means, to ensure that wage rates continue to rise as our productivity rises, we should gradually reduce our working hours, by accepting bigger hourly pay increases than annual increases.
Unlike the 1920s and 1950s, a solution for the 2000s must involve gender equality. Women in full-time employment, who still on average work fewer paid hours than men, have made considerable personal gains as a result of their workforce participation. Therefore, it is up to men to lead the way, to, as a 1996 New Year resolution, choose to give up some of their gross income in order to help enrich their own lives as well as to stabilise the labour market. Deep-seated cultural inhibitions prevent many men from moving from full-time to part-time work, or from leaving the workforce altogether. Therefore, what is required at the public policy level is a positive discrimination process, encouraging men to do things other than working for wages, salaries or profit. Of course, two of the most important other things are housework and child care. Women can help, by actively encouraging men into their traditional domains of activity.
As a form of positive discrimination, I would like to see the introduction of a pregnancy/childcare benefit, available to all parents for each child, and payable at the average wage. The maximum duration of the benefit would be 9 months (initially) per child for mothers and 12 months for fathers. Such a parental benefit should be paid out of the social wage; children are a social investment. Employers rightly see any paid leave as a disguised pay rise, and will prefer not to employ young married people if we impose excessive legal obligations on them to fund parental leave.
Many men can act to correct this problem of overwork right now, without waiting for a lead from government. Indeed many do choose to live in places where there are few jobs - especially Maoris who returned to their turangawaewae after they lost their city jobs and people who own freehold homes in small towns. The solution is to work the present welfare mess to their advantage. The poverty trap has a flip-side. Many individuals working full-time for less than the average wage are facing much higher effective marginal tax rates than they realise. They can claim a number of benefits including accommodation supplements, family support and gross minimum family income; indeed persons working less than 30 hours per week can claim the unemployment benefit. In addition there are a number of surtaxes that decrease as one's weekly wage falls: national superannuation clawback, payments to the child support agency, and student loan repayments. Medical bills also become much cheaper if you can qualify for a community services card.
Work avoidance, like tax avoidance, is legal. It is accepted within the business community that it is a firm's responsibility to its shareholders to arrange the firm's affairs so as to legally minimise their tax liability. For those parents who can claim higher benefits and reduced Inland Revenue liabilities by working fewer hours, it may be their moral duty to their children to give them more parental time for a small loss of net income. Children need quantity time with both parents. Avoiding gross income in order to get a higher benefit is not fraud. Parents, children, and future society all benefit from overwork avoidance.
The government is unlikely to promote such a strategy, because, for example, work avoidance by non-custodial parents would lead to less benefit cost recovery. Nevertheless, many who lose their full-time jobs in the next downturn will actually find that a small increase in money poverty, combined with a big decrease in time poverty, will lead them towards more satisfying lives, as many Maori discovered following the slumps of 1988 and 1991.
If enough men choose work avoidance as a means to reduce their time poverty and to raise other people's wages, the present government will not be happy, as it will be seen to undermine their philosophy of targeting welfare while encouraging people to compete harder for the limited pool of income available in the form of wages. The government's response would then have to be to redesign the welfare safety net, to conform with universal principles. The introduction of a universal welfare system will act to stabilise the labour market if benefit levels are set so as to conform with the "participation in community life" criterion laid down by the 1972 McCarthy Commission.
My mother was aged 6 in the peak of the 1930s' Depression. It was a wonderful time for her, for one reason above all others. Her father was at home.
Juliet Schor, The Overworked American (1991).
Wallace Peterson, Silent Depression: the Fate of the American Dream (1994)
Hans Binswanger, Money and Magic: a Critique of the Modern Economy in the light of Goethe's Faust (1994)
Albert Hirschman, The Passions and the Interest (1977).
Judith Sloan, "Towards Full Employment in New Zealand" New Zealand Business Roundtable (1994).
Robert Lane, The Market Experience (1991); "Work as Disutility ..." (1992) Journal of Socio-Economics.
Fred Hirsch, Social Limits to Growth (1976; 1995 edn.).
Philippe van Parijs, Real Freedom for All (1995); "Why Surfers Should be Fed; the Liberal Case for an Unconditional Basic Income" Philosophy and Public Affairs (1991).
Andre Gorz, Critique of Economic Reason (1989).
Sylvia Dixon, "Work Sharing; its Potential to Reduce Unemployment in New Zealand", Labour Market Analysis Unit, Discussion Paper, NZ Dept. of Labour (1994).
Rob Parsons, The 60-Minute Father (item in Sunday Star-Times, 15 October 1995).
© 1995 New Zealand Political Review
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