Academic journal article Monthly Labor Review

Work-Time Reduction in the U.S. and Western Europe

Academic journal article Monthly Labor Review

Work-Time Reduction in the U.S. and Western Europe

Article excerpt

Available data indicate that while the United States once pioneered in providing reduced working time for workers, achieving a 40-hour workweek well in advance of most other industrial nations, Western Europe has now caught up and passed the United States in this respect.

A number of reasons-none completely satisfactorycan be offered for the different work-time patterns in the postwar period. It has often been said that the European taste for leisure is greater than the American. The longer hours of work by Europeans before the war appeared to contradict that stereotype, but this was misleading because Europeans also had much lower incomes than Americans during this period, and high income has been found to be positively related to demand for leisure. In the intervening years, hourly earnings have risen rapidly in Europe, largely eliminating the income gap. A strong preference for leisure would be consistent with the Europeans' taking a large part of their earnings gain in the form of increased leisure.

Some support for the view that American workers are not ready to trade income for reduced hours was provided in a recent survey of employed Americans by the Bureau of Labor Statistics, which found that only 8 percent would be willing to decrease their hours of work if the change were accompanied by a proportionate reduction in earnings.

A second plausible explanation emphasizes institutional differences. High marginal tax rate policies in Europe may tend to discourage Labor supply there. Other welfare state policies may also have this effect, if less directly. For example, it has been argued that work-time reduction in the United States has been slowed because Americans have instead chosen to increase outlays for education and for pensions, so that they can both enter the Labor force later and leave it earlier.' A possible explanation of this is that American workers feel that their ability to provide for either their own retirement or the education of their children is more significantly dependent on their own earnings. While similar changes in Labor force participation rates have also occurred in West ern Europe, employees there have not been deterred from also seeking reductions in annual work time. The relatively greater role of the state in Europe in subsidizing education, retirement income, and health care somewhat reduces the pressures on the individual to work for pay.

Another difference is the greater influence of society (in the form of strong, politically oriented trade unions as well as state legislation) in Europe in directly determining work schedules. For example, many European countries, unlike the United States, have laws that provide for minimum vacation time or which set a maximum level for overtime work.

Finally, reduction in hours has, since at least the late 1970's, been regarded by Europeans as a way of sharing scarce employment opportunities, and this social concern has placed work-time reduction at the top of the bargaining agenda in a number of industries in Western European countries. Some observers place a major emphasis on this factor. But whatever the reason, it is clear that in one important respect-reduced working time-the United States no longer leads the industrialized world. U.S. working time

In this article, two sources of hours of work data are used. Hours paid data are collected from the BLS survey of establishments, while data on hours worked are obtained from the Current Population Survey (CPS, the household survey provided by the Bureau of the Census for the BLS). Establishment survey data indicate that hours paid on the average job have continued to decline in the postwar years in the United States. (See table 1.) True, the average workweek in the traditional core has shown very little reduction. The manufacturing workweek has been virtually unchanged, and only small changes have occurred in mining, contract construction, transportation, and public utilities. …

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