30 hours of work per week as a full-time norm: The party leadership of the left demands what many people want – and justifies it with digitization. But is this idea even feasible?
It looked as if they had agreed on their advances, the IG Metall chairman Jörg Hofmann and the left-wing leaders around party leader Katja Kipping: The union leader brought a four-day week into play to secure jobs in the face of structural change – which is specific in his industry means a 28-hour week. In a position paper on digitization, Kipping and Co. called for the 30-hour week to be the new full-time norm for everyone.
As different as the advances are in detail, they hit a nerve – on a personal level anyway: Many employees have the feeling that a 40-hour week is too much for the modern demands of everyday life – taking care of the household, looking after children To look after parents, volunteering in sports clubs or the fire brigade. This is all the more true, since the traditional distribution of roles many decades ago – the man works full-time, the woman looks after the house and children – has long ceased to represent reality. As a result, part-time has long since become as normal as full-time: At the beginning of the 1990s, the ratio of full-time to part-time jobs was eight to two – now it is six to four.
However, not only individually, but also socially as a whole, a shorter full-time job could support desired changes: All too often, with couples, from the first child at the latest, it is women who go part-time – with all the known negative consequences for their retirement and financial independence. Very often the couples would prefer to split paid and housework equally, but given the better earnings of men, they have no choice because otherwise there is too little money. If, instead, both could continue to work 30 hours a week, equality between women would take great strides.
So how are the attempts by IG Metall and the Left to evaluate Kipping?
As similar as they sound at first, the approaches are just as different: IG Metall is traditionally a pioneer in reducing working hours. The 35-hour week has been in effect in the industry since the 1990s, and in 2018 the union won the right to a limited 28-hour week for many employees – but salaries would then also be reduced. Both times it was basically about a better work-life balance.
Model from the 1990s: VW
This time, however, the union chief justified the initiative in an interview with the “Süddeutsche Zeitung” with a very industry-specific crisis, completely independent of Corona: structural change, particularly in the auto industry. The trend towards e-mobility is already costing jobs there and jeopardizing many more in the coming years, especially because the production of e-cars requires significantly less human working time overall.
Hofmann wants to distribute this decrease in work overall to the same number of employees – where it makes sense. He does not call for a general reduction in working hours, but for an “option for companies” in the next collective agreement in order to avoid job cuts. Only if the company and the works council were in agreement would the four-day week be introduced in a company. And: with working hours, wages would also be reduced. The IG Metall boss only wants a “certain wage compensation”. A model like this has already worked very well in the past: In the 1990s, Volkswagen was in a deep crisis – and kept the workforce for a 28.8-hour week agreed with the union.
In contrast, Kipping and Co. want a “general reduction in working hours to 30 full-time hours” for all employees – in a specific context. The demand appears in a comprehensive position paper on digitization , along with many others, such as antitrust law, taxation of digital companies, data protection for consumers and employees, digital participation or fiber optic networks. While the other requirements are relatively clearly outlined and described in detail, the shortened full-time term remains a very vaguely worded sentence. Nevertheless, it becomes clear why a 30-hour week should be mandatory, namely “to allow productivity gains to benefit everyone”.
There are two premises in this:
- Digitization will make a lot of human work superfluous, so the total amount of work will be significantly smaller – in return, the productivity of the remaining work will increase, so society will nonetheless become wealthier.
- This remaining work can be shared fairly among the people in order to avoid the negative consequences: a division of society into high-earning job holders and unemployed people with no prospects.
The only problem is: Almost all labor market experts assume that the bottom line is that digitization will not lead to less work in the long term – but to others. “If we invest in qualifications and encourage new hires, unemployment will continue to fall, even as digitization advances,” says Enzo Weber from the Institute for Employment Research (IAB).
And the second premise also has a catch. Economists speak of the “Lump of Labor Fallacy” – and by this they mean the fallacy that the amount of work to be done is an immutable amount; a kind of large cake that can be cut into pieces of different sizes and distributed.
For many companies, however, it makes a difference whether a 100 percent position is filled by a full-time employee or, for example, by three 33 percent employees. The hiring and training costs are incurred three times each, insurance contributions are due, and there is a growing coordination effort. A mandatory general reduction in working hours, as suggested by Kipping, could therefore – even without wage compensation – go hand in hand with an increase in labor costs for companies.
A country is not a company
Axel Börsch-Supan is a professor of economics in Munich, his MEA Institute actually deals with the consequences of demographic change for statutory pensions, but also has its own research project on the “Lump of Labor Fallacy”. This is “one of the most damaging myths in economics,” says Börsch-Supan. Again and again it is argued that it used to be said that more women in jobs would displace men, later it would be the older employees who allegedly take away the jobs of the younger ones.
The problem arises from the fact that many people imagine the mechanisms in the national economy to be similar to the processes in a medium-sized company. Its customer base is fixed, as is its production capacity – and the company can only use a certain number of employees.
But economies work differently. Or as Nobel Laureate Paul Krugman once put it: “A country is not a company” – a country is not a company. “A company is simply not a good analogy to understand an economy,” says Börsch-Supan. One example is the effect of innovations that increase productivity, such as the use of robots or computers. In the first step, these innovations can actually cost jobs in the affected areas, in which productivity increases: fewer employees create the same workload.
However, this is only the beginning of a series of adaptation and follow-up effects: The company may become more successful and expand its range. Complex products such as vehicles or digital devices are either invented or cheaper and affordable for broader groups of customers – so that demand and thus the number of employees increases. The demand for robots, machines and software is triggering a boom in mechanical engineering and the IT industry. More profitable companies, on the other hand, pass more money on to skilled workers and shareholders and shareholders – who again stimulate the economy in completely different areas, especially in the service sector. There are completely new offers that in turn meet completely new needs – who would have guessed in 1990 that
That is why the concern that progress is eating up work has never come true for half a century – although many media have prominently voiced it several times, including SPIEGEL.
However, one of the basic assumptions of the leftist initiative is absolutely correct: digitization has the potential to significantly increase productivity – you just have to use it. However, there is a problem here in Germany, and that could be dangerous. Because actually the big challenge for the coming years is not that we run out of work – but rather the workforce.
In recent years, the German economy has grown primarily because it has hired more and more people – but often employed them in a rather unproductive manner, as IAB researcher Weber explains . There is still a huge low-wage sector in which almost one or one in four works. As a result of demographic change alone, the economy will soon no longer be able to grow in this way – “but above all by increasing the quality of work,” says Weber. “We still have to generate more with fewer people”.
Specifically, this means: invest massively in further training and qualification, create better working conditions and also pay higher wages. As a result, productivity would also increase significantly. This could at least compensate for the decline in available labor. A nationwide reduction in working hours would only be a possible next goal: “Working less is good for those who want it,” says IAB economist Weber: “But we shouldn’t let digitalization dictate our working hours. In general, it should to be more flexible, not shorter for everyone. ”