Unemployment Crisis (Solution) - Post #5, A New National Lifestyle

This is the final post to a multi-installment presentation of a 20 page document I have spent 40 years thinking about and developing.  The introductory hypothesis was posted on Oct. 21, 2012 and outlines what I believe is a fundamental change in the international world of work.  This possible solution to the severe worldwide unemployment crisis this change has helped produce has been posted on Oct. 26, 27, Nov. 2, 4 and 6, 2012.  I hope you find it a worthwhile possible solution, and will share your thoughts with me as I expand and develop this document more fully.  Also, if you have found my ideas and posts worthy, I hope you will vote for me on Nov. 6th.   I hope you will consider all our 6 DC Green candidates as well.

 G. Lee Aikin,  DC Statehood Green Party candidate for "Shadow" Representative to Congress

ADVANTAGES TO BUSINESSES

     Although the advantages of this flexible system to individuals are obvious, there are numerous potential advantages for management as well.

     1. Lower turnover in boring types of work should result as workers recognize the twin advantages of financial and job security and freedom to pursue personal goals. Anyone can stand 3 or 6 months of routine work if they know they will have 3 months to work on their favorite project after that.

     2. Better quality workmanship with all its resulting savings should result from employees feeling less bored and routinized in their jobs.

     3. Fewer malcontents and people stuck at their level of incompetence (“Peter Principle”) should result as people experiment with different jobs during their “free” quarters, or as they make a gradual transition from one career to another as their needs and economic picture change. People who are unhappy or incompetent in their work would have the opportunity to try out various forms of work until they find the one ideally suited to them.

     4. The greater freedom to use both student trainees and mature workers who are in transition should result in the acquisition of more competent and experienced employees.

     5. The employer wouldn't have to feel like an S.O.B. Every time economic factors raised the specter of job layoffs. The savings in medical costs alone for executive ulcers should be considerable.

     6, Since the opportunity to elect leave quarters could operate on a seniority basis, the people rotating on and off the job would be the most experienced workers, thereby causing minimal disruptions and loss of readjustment time for the orderly flow of work. [

     7. The choice of working fewer quarters by senior people would lower wage costs and improve opportunities for upward mobility.

     While this is by no means an exhaustive list of the advantages that could accrue to management, it should serve to stimulate the imagination of any executive who might wish to seriously consider this system. It should be of special interest to those businesses that are being hardest hit by the current energy and financial crunch, like the auto industry, or those which have been in serious trouble for some time like the banking and housing construction industries.

LABOR/MANAGEMENT COOPERATION

     Flexible provisions to increase or decrease quarters available could be linked to some standard measure such as city, state or national unemployment figures.

     Although implementation of the Quarter System could have a major impact on the workplace, the transition should not be difficult with good labor/management coordination. Naturally a number of modifications would have to be made in existing labor contract language.

     The following sample contract provisions are modifications based on a Collective Agreement which the author has worked under personally. These provisions contain points favorable to both employees and management such as might be worked out through give-and-take negotiations. Although this particular contract is designed in terms of a white collar work situation, it's adaptability to the blue collar work force should not be hard to imagine.

SAMPLE LABOR CONTRACT LANGUAGE

     A) A total of __[ 40 ]__ quarters of leave shall be available to the __[ 100 ]__ bargaining unit members per (calendar/contract) year. [Some percentage of total quarters worked annually by all full time bargaining unit members should be chosen, such as 15%. This figure could be made flexible for firms with rapidly changing conditions—i.e., the auto industry.] [In the case above the figure is 10%.]

     B) Bargaining unit members may elect leave quarters (LQ) on the basis of seniority up to 2 quarters per year. Deviation for strict seniority will be permitted in hardship cases or where essential knowledge and skills of the most senior workers are needed.

     C) Employees using LQ will accrue annual and sick leave on a prorated basis, i.e., workers eligible for 13 days each of annual and sick leave will earn 3 ¼ days of each during all quarters worked.

     D) Employees may elect to receive full salary during quarters worked or proportional salary over 12 months, i.e., a person working 2 quarters could choose to receive 6 months pay at full salary or half salary over a 12 month period.

     E) In most cases, employees will inform the union and management of their quarter work plans and wishes at the beginning of each year. Otherwise the employee should inform management of the intent/need to take LQ at least one month in advance. Exceptions may be made for hardship cases.

     F) The employee will notify management one month in advance whether or not he/she intends to return to work. If the employee does not intend to return, he/she will notify management of this in writing. Failure to do so may result in the loss of some severance benefits.

     G) If reduction in force (lay-offs) become necessary the employer will notify the union of the number of quarters in specific job classifications that need to be reduced. The union will then poll the membership to determine if some employees would be interested in working fewer quarters, eighths, or months during the crisis period.

     H) An employee hired to work a single quarter (temporary hire) will not pay the initiation fee, but will begin paying monthly union dues upon completing the probationary period.

     I) Every effort will be made to enable employees to take LQ so as to coordinate with vacation and work schedules of spouses and children.

     J) When the local unemployment rate rises above ________%, employees taking LQ shall not work for other establishments employing more than ________ persons. Failure to observe this rule may result in loss of reinstatement rights. [These figures could be made flexible based on the prevailing unemployment situation, i.e., 9% - 20 employees, 12% - 5 employees.]

AN IMPROVED NATIONAL ECONOMIC INDICATOR IS NEEDED

     The economic indicator Gross Domestic Product has been a valuable tool for measuring national economic progress and prosperity. However, the recent upsurge in unemployment and decline of our cities and environment follows what had been a period of apparent rising monetary prosperity. Now it is especially important to consider what contribution the many unemployed can and do make.

     There are a great many activities of value to a nation's prosperity which can be quantified, but do not normally appear in the GDP measure. They include home maintenance and improvements, man and woman-hours spent in volunteer work (hospital aides, tutoring, counseling, scouting, etc.), growing and preserving food for family consumption, and sewing clothes and other craft production for home use. Engaging or failing to engage in such activities can have a tremendous cumulative impact on the national welfare, and consequently they deserved to be measured.

     One only need think back to the destruction of Bedford-Styvesant in the Bronx, or the areas where many foreclosures or plant closings like in Detroit are resulting in derelict neighborhoods, to comprehend the importance of these kinds of individual effort.

     It is therefore proposed that a new additional economic indicator be introduced, which could be called the Real Domestic Product Supplement (RDPS). This would undertake to measure all the activities mentioned above, plus any other domestic individual activities which can be quantified as goods or services that are not already included in the GDP [or in tax filings]. Because the results are not usually permanent and subject to verification, it would not include routine family maintenance activities like doing laundry, cooking, dish washing, trash hauling, shoveling snow, house cleaning, child care, etc. It would, however, include major repairs and home improvements as well as short term caring for children or other paid work for people who are not family members which falls below the IRS threshold for regular income reporting.

COLLECTING THE DATA

     A simple way to implement this new measuring system would be as an addendum to the Federal Income Tax. Each year along with the tax forms (or at Income Tax time for those below the taxable income level) everyone would be urged to submit a form outlining their production of goods and services not appearing on the regular tax forms. Each person would list the estimated fair market value of his or her goods and services minus the cost of materials used in their production. A person who did not create any supplemental goods or services would submit a form or mark an appropriate line in the tax form saying NONE.

     The reverse of the form could present tables of representative fair market values for common goods and services. Unskilled volunteer work would be rated at the prevailing minimum wage for the region in question. Services requiring a higher level of education or organizational skill and experience, i.e., tutoring, scout troop leadership, unpaid school board service, etc., would be valued at the local commercial rate for similar activities. These could be listed on the form or available on the Internet.

     A representative Family Production Form might contain items like the following [This sample family is imagined to comprise a wife who works part-time, a husband who was required by his employer to take the Spring Quarter off, a daughter 15, and a son 12.]:

Person   Goods & Services/Est. F.M. Value   Less Production Costs & Materials   Net Value

Wife       Sewed 8 dresses                      $ 480     cloth & notions                    $ 150        $     330

  “            Sewed 10 children's clothes     240     cloth & notions                         8                 160

  “            Scout troop leader (est. val.                gasoline (40 trips x 10 mi.

                   40 wks. x 3 hrs. x $11)          1,320        RT x 20 mpg. x $3.50/gal.)    70              1,250

Husb.      Paved side patio                    1,500      permit, cement, slate, rail      400             1,100

H. & W.  Fruit & Vegetable Garden    1,800      seeds, tools, fertilizer, etc.    300             1,500

Wife        Home freezing, preserving   2,400      veg., meat & containers       450             1,950

Son         Paper route, shovel snow        550      bike repairs, shovels, salt      80                470

Daugh.   Baby sitting (75 hrs. x $6/hr.) 450       crayons, etc.                            30                420

                           TOTAL SUPPLEMENTAL PRODUCTION VALUE                             $  7,180

The total family production multiplied by 4 = $28,720. This is more than the husband was earning in a non-union job. Thus the Supplemental Production Value created by this family is more than he lost from being laid off for the Spring Quarter. This time he productively used by putting in a large garden and paving the patio, feeding his family and enhancing his home's value.

     Under the Quarter System, preparing the annual Real Domestic Product Supplement report would help people understand the true value of their contributions. It would further a sense of pride and accomplishment while showing that taking quarters off does not need to cause a significant drop in family income or resources. In fact, that income might even be improved.

     Although filing this form need not be compulsory, voluntary compliance could be encouraged by means of a reward/incentive system. One such system might be to assign each form returned a number and have a lottery-type drawing with several large prizes and a number of smaller ones. This kind of incentive might particularly motivate participation by people who do not earn enough to file a regular Tax Return, including the retired who would actually have more free time for home productivity.

     The annual drawing could even be a big televised event, featuring the more productive drawing winners and praise for their individual contribution to the nations well-being. Presidents, politicians, and celebrities no doubt would want to take part. Handing out the big checks then could also create motivation for all to participate. Values like recycling, fine gardening and creativity could be highlighted. Honesty of reporting could be encouraged by verifying facts on any form chosen to win the largest prizes before awarding money to the winners.

     Enough data should be collected in this manner to enable statisticians to extrapolate for the total population. An alternative or additional method of gathering this kind of date would be to use the Census Bureau's household sampling procedures through their annual spot-sampling census to update household information.
     Recently and example was given regarding farmer self-sufficiency and dependency on the Agricultural Industrial Complex.  It was pointed out that when a farmer saves seed from his crop for next years planting, it does not count as part of the GDP.  When the farmer buys seed from Monsanto it is part of the GDP.  Does this really make sense?

SOCIAL UTILITY OF THE RNP

     Although preparing the Real Domestic Product Supplement could be valuable even under our current conditions as a measure of non-cash transactions and the labor of young people, the many un- and under-employed and retired people, it would truly prove its worth under the proposed Quarter Work System. Under the Quarter System, the RDPS measure would record both the increased home production and volunteer work that could result from people taking off large blocks of time from paid employment, and at the same time make people, especially the young, aware that such production and services are considered a benefit to the nation as well as to the individual.

     Thus the many individual acts which make the difference between a society on the upswing and one in decline would at last be fully known, and in some cases greatly rewarded. I believe that this could also prove America is a lot healthier than many people think or say we are.

G. Lee Aikin, July 2012