Vacation

Bruce Bartlett
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Posted: Oct 07, 2003 12:00 AM

It's hard work being a left-wing kook these days. On top of anti-globalization demonstrations and antiwar protests, there is always some new issue to organize.

This month, it is "Take Back Your Time Day," scheduled for Oct. 24. Originated by the rabidly left-wing Center for Religion, Ethics and Social Policy at Cornell University, the goal of this effort is to force employers to give workers more paid time off. In part, the organizers hope to create jobs by dividing up the available work among more people.

Before my left-wing friends start planning what to do with the extra time they will gain if work hours are restricted, they should look at what is going on in France. That country reduced maximum work time to 39 hours per week in 1982 and 35 hours in 1998. Of course, the socialist government mandated that workers receive the same weekly wages. Government inspectors were sent around to businesses to make sure that employees left for home after putting in their 35 hours.

The action was taken to increase jobs. France has long had an unemployment rate far higher than the United States. It is now 9.6 percent there versus 6.1 percent here. The socialists figured that there was only so much work to do, so if people were only allowed to work 35 hours per week, rather that 40 hours, then this meant that eight workers would be needed to do the work that seven workers did previously.

Economists call this the "lump of labor" fallacy. It is wrong because work is not homogeneous, either geographically or in terms of skills. Nor is the demand for labor fixed. Most importantly, it is a function of the price. If unions raise the wage rate above the market-clearing level, then unemployment is going to rise. Similarly, if government mandates a rise in wage rates, as France did by reducing hours at the same weekly wage, then you are also going to see higher unemployment.

Consequently, it is not surprising that the French action reduced employment, rather than raising it, as was its intention. Writing in the December 2002 issue of the prestigious Journal of Political Economy, economists Bruno Crepon and Francis Kramarz looked at the first reduction in work hours in 1982. Their unambiguous conclusion: "Changes in the legal standard workweek led to employment losses, contrary to the initial goal of these policies."

So if reducing the workweek by one hour clearly reduced employment, then reducing it by another four hours reduced it even more. Here, the evidence mainly comes from working people themselves. Shortly after the work restriction took effect, there were strikes by workers throughout France. One reason is that their employers told them that no pay raises would be forthcoming due to the cost of the new program. Others protested that employers worked them harder or purchased labor-saving machinery to raise productivity and compensate for the higher cost of labor.

Lately, polls have shown that a large majority of French workers want an end to or significant reform of the 35-hour week. French government officials are also complaining that the workweek restrictions raised government spending, partly to bail-out businesses that would have gone bankrupt without subsidies due to the higher labor costs, and because government workers were also subject to the new requirements. They also say that the work restriction has reduced economic growth in France, thus contributing to a budget deficit higher than allowed under European Union rules.

Although there is no serious legislative effort in the United States to mandate shorter workweeks, there are several left-wing groups working to bring it about. Their biggest problem is that most workers are quite satisfied with the number of hours they work and have no desire to work less. For example, last year people were asked if they would continue working even if they had enough money to live comfortably for the rest of their lives. Sixty-eight percent said they would still work. Another poll asked whether workers would prefer more time off or more money. Fifty-six percent said they wanted more money rather than more free time.

Polls also show that many workers would prefer more work hours than they have now, especially younger workers. Last year, 120,000 workers in South Korea went on strike against proposed legislation to cut workweeks there. And this was in a country where that standard workweek includes a half-day on Saturday.

Part of the reason for this is that most people know and accept that long hours and hard work are necessary for a high standard of living. Studies have shown that the wealthy work far more than other people. According to U.S. Trust Co., 71 percent of the affluent work more than 40 hours per week, and 31 percent work more than 50 hours.