ECONOMICS OF THE SHORTER WORKWEEK

THE REPORT EVALUATES THE SHORTER WORK WEEK WHICH HAS BEEN PROPOSED AS A SOLUTION TO THE UNEMPLOYMENT PROBLEM. THE PROPOSAL, WHICH COULD BE ACHIEVED THROUGH LEGISLATION, COLLECTIVE BARGAINING OR BOTH, REQUESTS THE SAME PAY FOR A STANDARD WORKWEEK OF 35 HOURS AS FOR 40, WITH OVERTIME AFTER 35 HOURS AT A PREMIUM OR PENALTY OF DOUBLE TIME RATHER THAN TIME AND A HALF. THE IMPACT OF SUCH A PROPOSAL ON THE DEMAND FOR, AND SUPPLY OF LABOR IS EXAMINED. IT IS SHOWN THAT THE SHORTER WORK WEEK WILL INCREASE THE STANDARD HOURLY WAGE RATE, REDUCE THE OVERTIME PREMIUM POINT, AND INCREASE THE OVERTIME PREMIUM. THESE CONDITIONS WOULD LEAD TO HIGHER WAGE RATES AND A HIGHER DIRECT LABOR COSTS, WHICH IN TURN WILL TEND TO INCREASE UNEMPLOYMENT. FROM THE STANDPOINT OF DEMAND FOR LABOR, IT IS DOUBTFUL EITHER THAT EMPLOYERS CAN AVOID ASSIGNMENT OF OVERTIME, OR THAT IT HAS MUSHROOMED IN RECENT YEARS. IT HAS BEEN FOUND THAT WORKERS PREFER MORE INCOME THAN MORE LEISURE. THIS WILL LEAD TO WORKERS SEEKING MORE WORK AT HIGHER PAY, AND THE POSITIVE SUPPLY RESPONSE WILL COME FROM THE EMPLOYED RATHER THAN THE UNEMPLOYED. IT IS ALSO SHOWN THAT THE SHORTER WEEK CANNOT BE EXPECTED TO INCREASE AGGREGATE DEMAND IN THE ECONOMY ACCORDING TO "PURCHASING POWER" THEORY. THE NATURE OF THE UNEMPLOYMENT PROBLEM IS EXAMINED AND ECONOMIC CORRECTIVES ARE SUGGESTED. THESE INCLUDE IMPROVEMENT OF THE TAX SYSTEM AND REDUCTION OF TAXES WHILE LIMITING GOVERNMENTAL EXPENDITURE. PROVISION FOR A STEADY GROWTH IN THE MONEY SUPPLY IS NECESSARY. UNECONOMIC WAGE-FRINGE SETTLEMENTS MUST BE AVOIDED AND A RELISTIC WAGE POLICY MUST BE DEVELOPED. A BUSINESS CLIMATE CONDUCIVE TO JOB MAKING AT THE LOCAL, STATE AND NATIONAL LEVEL IS ESSENTIAL A MAXIMIZE JOB OPPORTUNITIES.

  • Supplemental Notes:
    • APPS
  • Corporate Authors:

    Chamber of Commerce of the United States

    1615 H Street NW
    Washington, DC  United States  20062
  • Publication Date: 1964-2

Media Info

  • Features: Tables;
  • Pagination: 26 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00240332
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Feb 27 1974 12:00AM