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U.S. Unemployment – The Longer View

by Elliott R. Morss

Introduction

In my last employment article, I noted that we only recently figured how to use information technologies effectively. The result? A dramatic increase in the use of labor saving technologies. My conclusion: to get back to full employment,  consumers will have to be induced to “binge” again. Not a good option.

I cited the historical work of Juliet Schor, economist and sociologist and the author of The Overworked American: The Unexpected Decline in Leisure, and more recently, True Wealth: How and Why Millions of Americans Are Creating a Time-rich, Ecologically Light, Small-scale, High-satisfaction Economy. She points out that historically, civilizations work fewer hours as they develop (Table 1).

Table 1. – US: How Waking Hours Are Spent

Source: Fogel, Robert. The Fourth Great Awakening and the Future of Egalitarianism. Chicago: University of Chicago Press, 2000.
Notes: Discretionary hours exclude hours used for sleep, meals and hygiene. Work hours include paid work, travel to and from work, and household chores.

Information on a number of developed countries for more recent years is provided in the following graph. Even over this period, one can see a decline but with an uptick at the end of the period as people work more hours after capital losses in the global recession.

Source: OECD

Is this what the US should be trying to do? Try to get workers to work less? Many commenters have suggested that getting people to work less is unrealistic. So I asked Professor Schor to address some of these issues. The interview follows.

Elliott: Professor Schor: I have considerable sympathy for your main point, but readers have raised a number of questions about the feasibility of your proposals. Let me start with where we are now. My vision (and I don’t like it) is that machines are taking over almost all manual jobs. That means only people with some education (to run the machines) will get jobs and the less educated will not. A grim prospect.

Prof. Schor: You’re right that we are going through a wave of mechanization, which has also extended to white collar labor. The only way to make this work now is to reduce hours of work. Trying to grow our way out of technical-change induced unemployment is ecological suicide. We’re already producing more pollution than the climate, and planet, can tolerate. Historically, we reduce hours per year and over the lifetime to respond to technical change. For example, in the US and most other global North countries, annual hours fell between from 3000 in 1870 to under 2000 by 1973. And that’s a big part of the point, isn’t it? Economic progress gives us more time to live, rather than slave.

Elliott: OK, we can forget about our dysfunctional Congress, our burgeoning government debt, a stimulus package to create more jobs. But we have to face the fact that a lot of older people are going back to work because with recent stock market collapses, their retirement savings have diminished. This lack of savings is an incentive for people to work more. How do we turn all this around?

Prof. Schor: The current policy of austerity will only make things worse. And the most commonly cited alternative, federal stimulus can help, but only up to a point. There isn’t a political will for a large enough stimulus. More importantly, Republican want to cut taxes to stimulate the economy, and lower taxes will create fewer jobs than higher government expenditures. But the bigger point is that what I call “indiscriminate macro-policy,” Keynesian pump priming. This will have us spending money on things we don’t need, rather than investing in what we do need—clean energy, education, mass transit. On the labor market side, we need to do things which open up the labor market.

We could expand, rather than contract, social security eligibility. Smart countries with unemployment problems try to pull senior workers out of the economy. They don’t create incentives for them to work longer. We could give partial benefits for people to gradually reduce work hours as they get older.

Elliott: What you are saying makes a lot of sense. But in the age of CNBC talking heads and partisan economic policy wonks, nobody is listening. What sort of time frame do you have in mind for people to work less? Is it 50 years with bumps up and down along the way? And if so, do you see a decline over the last 50 years in the number of hours worked?

Prof. Schor: Shorter hours of work are possible at many levels–more schooling at the beginning of the worklife, four day workweeks, and then tapering off hours at the end of the work life. The key is to contract from where we are. From the 1970s until the crash, people who had jobs were putting in more than 200 more hours per year.

Elliott: I believe the “Parable of the Grand Inquisitor” appearing in Dostoevsky’s Brothers Karamazov is the greatest statement on human nature ever written. In it, Jesus returns, saying he wants to give man his freedom. The Grand Inquisitor tells him to go away. He says man does not want freedom but instead ceremony and structure. As the influence of religion declines, jobs provide very important structure for humans. What do we do for humans to take the place of work for structure?

Prof. Schor: One of the most exciting new structures to cope with the disappearance of work is community. What do I mean by that? People are connecting locally, in resilience circles, time banks, local food groups, local governance, climate action plan groups, and the like. In the 21st century, local community can be what the workplace became in the 20th century.

Conclusion

The logic of what Professor Schor is advocating is so powerful that it deserves attention. And as she says, “smart countries” understand and are helping to facilitate less work. Who knows, it might not require planning. It might just happen.

Postscript

I recently visited a retirement home to see a friend. He loves it. Plenty of things to do: painting, photography, knitting, TV broadcasting, etc. Each unit has its own kitchen, but the home also has restaurants. Four large buildings are connected, so you never have to go outside. He never feels lonely.

For me, it was quite chilling: everywhere you look, older people. With such high concentrations of older people, it was hard to resist the thought that the next step is death. Not something I want to be reminded of continually.

But The Grand Inquisitor was probably right: most humans need structure (and some ceremony). These retirement homes and the structures suggested by Professor Schor fill the bill.

Chacun à son goût. One man’s trash is another man’s treasure.

Added Editorial Postcript

The following note was forwarded by Charles Vaughn who listened to a talk given by Dr. Morss speaking about his interactions with Prof. Schor:

Elliott, thanks for the invite [to the talk].

As to professor Schor, what I gather from your discussion (I have not read her work) is that she advocates that government somehow does what people have been doing for centuries: figuring out ways for people to “work” less for the same ( or more) pay. Fingers were replaced by digging tools, which were replaced by…, etc., etc..
And this has always resulted in some job losses… Buggy whips anyone?… for which the typical government response has been/is: maintain the status quo. Or worse, return to digging with fingers. Any kind of work as long as it is a “job.”

And, of course, “work” and “job” are, or should be, no longer synonymous. I am very happy in my retirement home environment largely because I no longer need a job to work at that which I enjoy, just as you have “work”ed at your golf game, or writing morssglobalfinance.com.

On the subject of age and our response to it: I clearly recall entering second grade, encountering those in the sixth grade, and despairing of ever becoming so ancient; similar wonderment about senior class men occurred on entering high school. And at Linden Ponds I marvel at 3 of my golf buddies, age 90, 92, and 93, still “working” at their game.

Bottom line? I liked your conclusion: “Who knows, it might not require planning. It might just happen.”

Related Articles

Opinion Blog articles by Elliott Morss

Analysis Blog articles by Elliott Morss

Investing Blog articles by Elliott Morss

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3 comments
JGBHimself
JGBHimself

The Point, is that there is a difference between "goods" and "services", and to assume that only creation of the former is "work", might, actually, be wrong. “Parable of the Grand Inquisitor” is not only about "work", but also about "play". Take Loss Vegas, please. (or David Letterman's NYMets?) You do see, do you not, that it is all the fault of television and the internet. Too many of U.S. sitting around, literally; not being outed and conspicuous in our consumption. What is the correlation between "universal" and "free" television and internet coverage all over U.S. , and the loss of (y)our jobs and family incomes by U.S. Is this not Ipso Facto; Post hoc ergo propter hoc; AND res ipsa loquitur! (the proximate cause of that, was Starbucks Sumatra coffee this mourning) Which is why we should, economically, insist that every single one of U.S. buy cable or satellite TV, and higher priced internet and cell phone services. We must eliminate all "free" services. And, adopt a Value Added Tax - applying it to all sex, equally. Especially to the use of G-spot vibrators. One man's trash is another woman's treasure. (or something like that) Do you see the truths, or is it hidden, behind the humour?

JGBHimself
JGBHimself

Last night the Phoenix Coyotes sold out the arena, for hockey, in The Valley of the Sun. Almost as odd, they won. Some people had to work, there. But, compare that to the then catholic Roman Catholic church during the Dark Ages. By creating lots a monks, they cut down on the population explosion; and provided many non-agricultural jobs. They also went on "A Crusade", of sorts. Using war to "employ" men, while also eliminating many of them too. We should not, however, compare THAT to WBushies wars, should we. Bcuz we will keep'em alive, and create all those medical, and psychiatrists, jobs. So, what do WE do, we cancel the NBA season. Sorta like cutting back on teachers. All that really matters is cutting taxes, and jobs, for the few of U.S. that were still paying them. "Chacun à son goût. One man’s trash is another man’s treasure."

JGBHimself
JGBHimself

Elliott, unlike Inspector Morse, you do not see The Connections. If seeing all those OLD people scares you, think what it must have been like in Germany, Japan, and Russia after WW2. Take Stalingrad, please; bcuz the Germans couldn't. How many people did the Russian lose there, and how many Germans? Different ages, true. But, a decimation, nevertheless. Or, Leningrad? How did those countries, societies survive and recover? "Retirement" communities, similar to my mother's Monte Vista Village in Mesa, AZ, keep U.S. active. That creates jobs, too. Warehousing orphans, and later the old, eliminates both jobs and enjoyable lives. Unnecessary, and wasteful, and ethically wrong and counter productive. The point is that doing something is better than doing nothing.