US Pays a Price for Prosperity

By , David R. Francis is editor of the Monitor's Economy page.

WHEN the speaker of Japan's lower house of parliament, Yosh Sakurauchi, called American workers "lazy" last month, he prompted considerable commotion in the United States. Lazy is a relative term. Actually United States manufacturing employees work the equivalent of greater than two months (320 hours) more per year than their counterparts in West Germany or France, says Juliet Schor, a Harvard University professor and author of "The Overworked American." Furthermore, between 1969 and 1987, time on the jo b for the average employed American increased by 163 hours a year, or an extra month. But Japanese workers in manufacturing put in six weeks more per year than their US counterparts.

Does this mean US workers should be spending even more time on the job? By no means, Schor argues in this excellent book. She figures Americans are already overworked - contrary to the expectations a few decades ago of a future abundant in leisure time.

If business presses for more hours at existing pay, this is merely a roundabout way to reduce workers' wages, Schor notes. While lower wages help competitiveness in the short term, in the long run they can boomerang: Declining wages lead to declining productivity through diminished incentives to invest, higher turnover, and lower employee morale.

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"The game of lowering wages can get insidious," she writes. "Once the highest in the world, US manufacturing wages have fallen substantially for a decade and now rank below many West European nations. How far down should they go? Korea, Brazil, and India are growing competitors. If corporations demand a decline to the poverty wages in many countries, should American workers simply accede?"

The important thing is to boost productivity. "In the international market, what matters in the long run is not how many hours a person works, but how productively he or she works them."

In Japan, she writes, thousands of white-collar office workers "become victims of karoshi, or 'death by overwork. Productivity is lower than in other advanced countries in part because working hours are too long.

Schor's thesis is that key incentive structures of capitalist economies contain biases toward long working hours. Abuses in the early stages of capitalism, which included extremely long hours in "satanic mills" and other businesses, were reduced by trade unions and social reformers after a protracted struggle. But that struggle collapsed some time between the Depression and the end of World War II. Unions have seen their influence decline.

Ironically, although people are generally working longer, nearly one-fifth of all participants in the labor force are unable to secure as many hours as they want or need to make ends meet. Many workers suffer from involuntary part-time work or work without fringe benefits through temp agencies.

"The rational, and humane, solution - reducing hours to spread the work - has practically been ruled out of court," she complains.

"The Overworked American" offers a useful criticism of capitalism. With the collapse of the Soviet empire, and with communism no longer a threat, the weaknesses of capitalism may get more attention.

Schor offers two explanations for today's long hours. First, it lowers costs for management to impose longer hours. In the case of workers paid on an hourly basis, the cost of overtime (even if paid at time-and-a-half) is usually lower than the cost of hiring more workers, because those new workers involve expensive benefits, possibly training, and contributions to social security and unemployment insurance. Total benefit payments as a percent of wages and salaries stood at 36.2 percent in 1987. Workers put up with the extra time because it gives them extra pay to improve their living standard. Salaried workers, who now account for 40 percent of all US employees, work longer on average than hourly wage workers. Some salaried groups toil at 19th-century schedules. Medical residents, investment bankers, corporate lawyers, and many other professionals work 70 to 80 hours a week routinely, more in a crunch.

Second, the "consumerist treadmill and long-hour jobs" have combined to form a cycle of work and spend. Americans in every income class have about twice as much income and material goods as they had 40 years ago. Americans spend three to four times as many hours a year in nonfood shopping as their counterparts in Western European countries. The size and quality of the US housing stock has not been replicated anywhere else on earth. Schor offers a host of statistics showing the astonishing rise in "thing s" Americans own.

But Americans have paid a price for prosperity. They have accepted longer hours to pay for improved lifestyles, especially since the real wages of hourly wage workers declined in the 1980s, and the pattern of income distribution in the nation became less equal. Half the population says they have too little time for their families, a problem particularly acute for working women. Work-related stress has placed "tremendous burdens on marriages."

"Materialism has not only failed to make us happy," she writes. "It has also bred its own form of discontent - even among the affluent."

What is to be done about overwork? Schor has numerous suggestions, most of which will be controversial. For example, she proposes that individual firms specify a standard work schedule for salaried workers, with equivalent time off for overtime. It would be "a start in the right direction," she says, for the government to mandate four-week paid vacations for all employees and six-month, paid, parental leaves, financed through the social security system.

Americans, Schor writes, need more time to give to others - caring for children, sick relatives, and friends, caring for the house, and civic participation. "Today many haven't got the time to care."

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