A four-day week is discussed
The idea: full-time employees reduce to 30 hours, previous part-time employees work just as long - and everyone gets the full salary.
[This interview with the economist Heinz Josef Bontrup published on 8/17/2020 is translated from the German on the Internet, https://www.fr.de/wirtschaft/wer-kuerzer-arbeitet-ist-auch-produktiver-90025061.html.]
Full employment and higher wages: Economist Heinz-Josef Bontrup pleads for a redistribution of work - and explains how a four-day week could work.
Katja Kipping, leader of the Left Party, has proposed the nationwide introduction of a four-day week, with full wage compensation. One of her main arguments is that shorter working hours will make people happier, healthier and more productive, which will benefit companies. The trade union IG Metall has also brought a four-day week into discussion to cushion the crisis in the car industry, but with a loss of wages. Heinz-Josef Bontrup can also warm to a reduction in working hours. "But we can't do that without a broad redistribution to the employees," says the economist.
Mr Bontrup, how many hours a week do you work?
I can't really get by with 40 hours a week. But my work is science, and it often doesn't feel like work.
"You work shorter hours, you're more productive."
Heinz-Josef Bontrup, labour economist
The left-wing politician Katja Kipping has brought up the issue of reducing working hours to four days with reference to higher productivity. Could a five-day workload really be achieved in four days?
There are enough studies to prove it: Shorter workweeks are more productive.
But if you look at industry, for example, it looks as if every productivity reserve has been exhausted. Or let's take supermarket cashiers or nursing staff - here hardly any more work per hour is possible or desirable.
It is true that the possibilities for increasing productivity are often limited - in the manufacturing industry, but also especially in the services sector. After all, we have been seeing throughout the economy for a long time that productivity is growing at an ever slower rate, in other words the economic yield per hour worked. From 1991 to 2019, it grew by an average of 1.3 percent per year, and from 2006 to 2019 by only 0.8 percent.
Heinz-Josef Bontrup was a professor specializing in labor economics until his retirement.
However, this creates a problem with the reduction of working hours: companies have to pay the same wage but receive less work.
That is correct. If the employees were able to perform the same work for the same wage despite reduced working hours, the distribution of national income would not change, i.e. employees and companies would receive the same share as before. But unfortunately, productivity is not growing as strongly. The easy way to reduce working hours is therefore blocked.
And yet you have long advocated the 30-hour week...
If we cannot achieve a reduction in working hours in a distributionally neutral way, then we must get down to distribution. This means that if working hours and work performance are reduced but wages remain constant, then less will be left for companies and investors. I would have nothing against that either.
But the companies certainly would.
Of course they would. But this must be seen against the background of the massive redistribution that has taken place in recent decades in favour of capital income. Companies have earned well, and the German corporate sector has a gigantic surplus liquidity of almost EUR 520 billion - in other words, money they have left over after investments, dividend payments and debt servicing. There is enough financial leeway there.
Headwind for IG Metall
Suggestion: The IG Metall union has brought up the issue of a four-day week to save jobs in the metal and electrical industry. By having all employees work less, it should be possible to keep jobs despite structural changes. In return, the employees should also accept certain wage reductions. But only to the extent that they can still afford the four-day week. In this way, companies could secure skilled workers and avoid the costs of redundancies.
Counter-attack: The Federal Association of German Employers' Associations immediately rejected the proposal. A four-day week with rising hourly wages was not feasible, they said. It would further intensify the economic shock, managing director Steffen Kampeter told the newspaper "Frankfurter Allgemeine Zeitung".
The president of the Institute of the German Economy, the economist Michael Hüther, who is close to employers, also flatly rejected the proposal, "because it would be nothing more than an extension and thus capitulation to the crisis," Hüther said. In the second quarter, the German economy shrank by ten percent, he said. "And that's supposed to perpetuate the legislature's policy of rising labor costs and thus higher risks for jobs?"
But not all companies are doing well, especially many small ones are working at the limit.
It's true. Unfortunately, the Federal Statistical Office has not yet provided a comprehensive calculation, differentiated by size class, of the value that is important in capitalism: the return on investment. But one must not forget that the return on investment is often higher for small companies than for large corporations, simply because they have to use smaller amounts of capital.
In the 1950s, Ludwig Erhard, then Minister of Economics, commented on the trade union demand for a 40-hour week: "A nation which, in order to remain competitive on the world market, has to make constantly high investments. Such a people should not indulge in considerations of reducing working hours."
And he wasn't right. Today, however, there is something else: in order to achieve a 30-hour week for everyone, we must not only reduce the working hours of full-time employees with full wage compensation. We must also increase the working time of part-time workers to 30 hours so that they can earn more and live off their work again.
So that would mean: Full-time workers would be paid the old 38-hour week for 30 hours a week. Part-time workers would be increased to 30 hours and would also receive a 38-hour wage.
Yes, this would make this project even more expensive. If companies had to shoulder this alone, the share of capital income - profits, interest and rent - in total income would fall by 12 to 14 percentage points. That is too much. Private employment would therefore have to be supplemented by meaningful public employment. In other words, the costs of a 30-hour week for everyone would have to be borne by the state.
What argument would be used to push through such a comprehensive reorganization?
That this is the only way we can return to a state of full employment. And that's where we want to go again. At present, there are still many unemployed or countless people who want to work more but cannot. This means a gigantic waste of resources. Without full employment, an economy works below its optimum. That is the first point.
The second: underemployment shows that there is currently an abundance of labor. This puts pressure on wage trends. One in four employees is now working in the low-wage sector, the price of labor is falling, and this cannot continue. If, on the other hand, we return to full employment, work will also become scarcer again and its price may rise.
You want to reduce working hours for many people, but at the same time you also want to get many unemployed people back into work and increase the working hours of the marginally employed. Even if this were to be implemented: How do you ensure that all the new workers have the right and necessary skills?
This is indeed a problem, there is no need to be under any illusions. I can think of nothing better than further training and qualification offensives, where we already have major deficits. Something must then be done to compensate for the qualitative gap. All of this is possible.
Is there more? Cashiers often have more than enough to do.
© Ina Fassbender/ AFP
If one looks at the reductions in working hours in recent decades, these have always been the result of fierce battles. Now it seems that the trade unions are neither in the mood nor in the position for such struggles. Who is to enforce the reduction in working hours?
I have been severely criticized by the trade unions for my proposals on the redistribution of work. This is incomprehensible to me. Because the labor movement always had two demands: more pay and less work. For me, collective bargaining policy is supported by both pillars. But since the mid-1990s, people have not wanted to touch the one pillar, working time. Since 1993, the wage ratio has fallen, which means that over the years employees have lost a total of EUR 1.4 trillion. Fourteen hundred billion! That has ended up in the income from capital. I do not know how the unions intend to break this trend permanently without full employment.