Unemployment Crisis, Worldwide (Solution): Work, has its Nature Changed Permanently?

Does our current employment emergency represent a world wide, permanent systemic shift?

In the 4 years since this article and the 5 installments have been posted, I have had a number of visitors from countries like Germany, Russia, Latvia, Poland, France, Ukraine, Great Britain, Sweden and China.  I would very much appreciate receiving comments from people who are trying to interest governments or businesses in trying the idea, and their experiences.

During the bitter 2112 US election cycle much was made of the failure of President Obama or his administration to move unemployment below 6% over the preceding  4 years.  In the beginning of his Presidency, no one really knew how severe the overall economic situation had become.  For the first 4 months after inauguration jobs continued to disappear at a rate approximating 800,000 per month.  Large sums of money were approved to promoted economic and hiring activity, but much of that money is still sitting in storage with banks and corporations.  Why on earth is that true??

I propose that there has been a marked and probably permanent change in the employment dynamic for the developed world.  This explains why both we and Europe, and even some areas in Asia, are in or facing an economic crisis.  At least in the US, the rapid escalation of top wages relative to workers and the middle class means less money in the hands of the people who are likely to use most of their income to buy the kinds of goods and services that support production and service businesses.  For banks to sit on the funds made available during the emergency has only worsened the situation.  The worldwide information and automation revolution is also making its impact.  Here is my theory and explanation, plus a unique, far reaching, but simple plan to quickly lower unemployment. 

Over the past few centuries patterns of labor and employment have undergone profound changes. In the 1700s the Western world was predominantly agricultural. People mostly worked small tracts of land, at times for long hard hours, but also with seasonal slow periods. Women as producers of thread, cloth, clothing, bread and other foods often worked more continually than their menfolk.  For example, in England many people raised sheep and their womenfolk spun yarn for the fabric industry, until machinery and cotton production changed that dynamic.

As the industrial revolution advanced, more and more people, including children, were pulled into the grinding labor and long hours of textile mills, coal mines, steel mills and other large manufacturing enterprises. Slavery in our South and elsewhere flourished with the invention of the cotton gin and the manufacture of sugar.  Conditions in the North and in Europe for "free" workers were often almost as bad, with fewer beatings but even less food and housing security.  Luddites even revolted, at times violently, against the machine.

Eventually people organized and rebelled successfully.  Also, some legislators were struck by the damage of long hours to both children and adults and instituted labor reforms. Whether by the slave revolt in Haiti or the labor strikes and union formation in our own country and Europe, working hours were gradually reduced. From 6 days and 10 to 16 hours per day, to our current standard of 35 to 40 hour weeks has been a long fought struggle.

Now many are in a severe unemployment crisis. There are those who say we just have to consume more and make more. But, we all seem to have so much STUFF, a lot of it from China, that many are coming to realize they really don't want or need more STUFF.  In fact, there are several monster yard sales like the 700 mile yard sale for 4 days in early August each year so people can get rid of their STUFF.  With so much efficient, low-cost production throughout the poorer countries, where will "first world" reemployment come from? There has also been a shift in the kinds of workers needed, with new kinds of training and education needed as outdated kinds of work are lost.  Even for manufacturing jobs returning to the US, greater efficiency will reduce relative need for workers.  In the US our schools have fallen behind in teaching for the new economy.

I believe that we have reached a new period in the history of production and labor. In Europe the average amount of time for paid vacations is mostly much higher than in the US--France-38 days, Sweden-32 days, Italy 31 days, Denmark-30 days, Germany-27, Britain-26. In the USA the average is 13 days. Even Japan provides 15 days, and Canada 19. Has the efficiency of world production increased so much in recent years that the 35-40 hour, 49-50 week work year can no longer provide full employment in developed countries?  That would certainly appear to be the case in some European countries with unemployment above 20%. 

While there is tremendous long-term employment potential for renewing aging infrastructure, producing renewable energy sources, developing the new oil shale fields like the Bakkan, caring for the elderly, etc., this will not be a quick fix. Nor will people necessarily be willing or able to run up the municipal or national debt needed to finance some of this employment. There is also resistance to running the risks of rapid oil development without adequate safeguards.  Thus it seems we need solutions that can be implemented quickly, and at the same time reduce unemployment and increase a sense of job security.  Insecure people do not spend much money on non-essentials, nor take time out to learn new, more marketable skills.

Some states, municipalities and businesses have tried to avoid firings and layoffs by requiring all employees to NOT work a few days each month. That is helpful but not a very efficient way to save some jobs and money. However, it would be far better for employees to have longer prescheduled periods when they could make productive use of their enforced time off. Then they could plan things like career education, home renovation, large gardens, or short-term seasonal specialty work.

School systems have already learned to deal with the summer unemployment of most of their teachers. The individual teachers usually know if they will return to their job after the summer break. In some systems teachers can choose to be paid 1/10th of their salary for each of the 10 months they work, or 1/12th of their salary monthly over the entire 12 month year, even when they are off for the summer months.

If governments or businesses need to cut back on employment because of lack of revenue or reduced sales, they should consider the model developed by schools and teachers. They should determine if they have slower periods when their employees could take one or more months off without disrupting employer needs.  Then workers could be paid full salary while actually working, or an equivalent fractional salary for all 12 months of the year.  [Managers dealing with the US Sequester might consider this as a voluntary option rather than across the board unpaid leave for everyone.]

Plans could be made well in advance for those who would want pay for all 12 months while working fewer months. The reduced monthly payments would begin immediately while the money not paid would be put in escrow for payment during the months not worked. While it might be nice if we could have longer guaranteed vacations as in Europe, under current low employment conditions in the US, many would probably just be happy to have a secure if slightly smaller paycheck.  Other developed countries might find this type of system useful as well.

This kind of program could be implemented anywhere and at any time by a government or business that wants to save money while at the same time providing security and stability for their employees, and retain their trained workforce at times when short-term lay-offs may be unavoidable. However, if we are truly entering into a historic new phase in employment needs, then a more structured and widespread system of employment practices may be needed.

I have been observing the growth and development of employment problems since the 1970's, and researched and written a more broadly based, voluntary system for dealing with our overall changing employment needs. Temporary booms like the dot com and housing bubbles can provide an increase in employment for a few years, but they don't last. After considering a number of contemporary problems, I believe that significant positive changes could result from implementing a more balanced pattern for employment, education, and personal projects in what I call A New National Lifestyle.

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I am in the process of polishing this comprehensive plan for our current conditions. This concept is entirely new, but I hope you will be interested and willing to read all the installments.  The five installments have been posted on Oct. 26, 27, Nov. 2, 4, and 5, 2012 There is a box in the upper left side of the post where you can enter your email address so you will be informed of all new post or significant updates.  I also hope you will provide useful comments and opinions which I can  use as I modify, update and expand this plan. If you choose to read it, I hope you will keep an open mind and remember that it is voluntary and democratic in implementation, and no more extreme than daylight savings time.  It appears that people in a number of European or other countries have read this.  I would appreciate hearing your opinions and whether this type of plan is being proposed or implemented anywhere.