The British have solved unemployment, once and for all
Marketplace Morning Report broadcasts all week from London.
I am anchoring Marketplace Morning Report from London this week. While on the road, I am scouting for big ideas and I may have found a doozy.
Some iconoclastic economic thinkers just over the river in the Vauxhall area of London have constructed a device that wipes out unemployment.
Roll this baby out into the economy and everyone who wants to have a job would get a job. If it works as promised, not just Britain but the rest of the developed world including the U.S., could have full employment.
Outsourcing of jobs to poorer parts of the world? No problem. Robots and algorithms taking away human jobs, not to worry. And what is this device that would solve what is one of the greatest and most persistent economic problems?
Well, it is not a device in the sense of an electronic contraption. But it is a mechanism, a policy mechanism that is being put forth by experts at the New Economics Foundation here in London, among others. The idea is quite simple (although implementation will be tougher; I'll get to that in a moment).
Here is the idea: the 21-hour work week.
The NEF's proposal allows people to choose to work fewer hours. For the purposes of my discussion, let's do it by official decree: the order comes down that people can only work about half the hours they work now. That means it would take two people to do what is now one job. I do six shows a day as we roll through the time zones, including our ever-popular podcast.
With a 21-hour work week, I might do three of them a day and leave early. That means we could hire one more anchorman. Two people have jobs instead of one. Sure, the boss might try to cut my pay nearly in half, but if every working woman and working man was being paid less, prices should eventually drift downward to compensate.
Think of the benefits. If I were only working 21 hours in a week, I would have more time to do volunteer work, write a book, read a book, ride my bicycle, clean the basement -- more time to be a more balanced human being.
Yet, what might employers say about this 21-hour work week device to rid the developed world of unemployment once and for all? They generally don't like the idea much. You see, if there are two people doing the work of one -- that means two health care plans, two company pensions -- which could be a huge expense.
This suggests the 21-hour work week is more likely to come first to countries (like those in Europe) that have universal health care.
Another criticism that comes to mind about chopping the work week down the middle in order to produce full employment? Possible effects on income inequality. People who live off their wages and salaries as their hours are cut would find their incomes dropping (and their free time rising). People who live off their assets, their investments, might not see the same kind of decline in income. This might widen the gap between the richest and everyone else.
It is not just the New Economics Foundation here in London pushing a voluntary version of this. Up the road in Scotland, a policy group called the Jimmy Reid Foundation is trying to make the case for Scots working few hours. And, with all due respect to our UK hosts this week, the idea has a tradition in the U.S. as well. Not a glorious tradition, but a tradition. In 1933, President Franklin Roosevelt apparently put a stop to a bid to cap the American work week at 33 hours.
Even with the mass unemployment of the Great Depression, shorter work weeks were seen as just too radical a notion.