# Would reducing the maximum working hours also reduce unemployment?

In Brazil, the maximum working hours is 44 hours per week.

Would reducing that to 40, 36, etc, reduce unemployment?

• Jeremy Rifkin thinks so.... Feb 5 '14 at 23:32
• Goteborg will try 6h: abr.ai/1ixO1Ei. Sadly the source is in portuguese, but i don't have another. Translating: "If the results are positive, Pilhem says that the measure may be adopted as official. For him, the reduction in the working hours bring other benefits, like the creation of more jobs." May 4 '14 at 12:59

Maybe... But lets look at the numbers.

So every week every worker is going to bring home 25% less a week because they are working less hours. This is an effective pay cut even if the pay rate remains the same. People in management positions are already exempted from these types of limitations usually, so while the workers will all get pay cuts the management will remain the same.

For every 3 workers before the cut a company could hire a new worker for the rate that was saved. But that is not generally how business works. They will first try to squeeze what was done in 8 hours of work into a 6 hour day. So lets assume that productivity bounces up and 50% of the lost time is recovered in productivity boosts from shorter days. So now we only have to hire a new worker for 1 in 6 workers prior to the change.

So look at the math. Lets use a 10/hour flat rate to make the numbers easy to deal with.

Before the limit company has 100 workers making 10/hour for 8 hours producing 800 units. Total Expense 8000

After limit company has 100 workers making 10/hour for 6 hours producing 700 units. Total Expense 6000

To get production back to 800 units we hire 15 more workers. Company has 115 workers making 10/hour for 6 hours producing 805 units. Total Expense 6900

So in this model we see every worker takes an effective 25% pay cut. The company gets a 14% reduction in payroll expense but 15 people get jobs that pay 25% less than the same job did before the cut.

The company that runs 3 shifts prior to the cut now can run 4 shifts. So they may even see a bigger gain. This would be the greatest upside to this for the economy because it does end up with 160 more jobs for 53% increase in the number of positions available and 25% more production but the cost of that production is only an increase of 15% in wages.(24k vs 27.6k)

So while the number of employed goes up they do so on the backs of the people who had the work before.

• While I think that this would likely be what happens (potentially greater employment but combined with lower wages), you should really have a citation of some study that found that that would be the case. Feb 7 '14 at 17:56
• @Avi - The question asks for speculation thats what this is... Feb 7 '14 at 18:02
• @Avi - I would love to see the same... but per meta that standard will not be implemented here... So when in Rome, play the fiddle with Nero! Feb 7 '14 at 18:26
• @Avi - With out the support of the Mods it is basially impossible. At some point we will anger the pwers that be at SE and they will shut us down and that will be the end of Politics SE Feb 7 '14 at 19:20
• well then I guess there's not much else we can do. -Starts Fiddling- Feb 7 '14 at 19:25

Not necessarily. This follows from a Marxist perspective, but most of it could be rewritten through Keynsian or other aggregate analyses with no loss in analytical value.

The reduction of Australian labour to an eight hour normal day occurred with "no loss in pay." It also occurred as part of a series of productivity and labour discipline deals. So while the hours of output reduced, the total wage remained relatively constant, and the level of total productivity remained relatively constant (ie: per capita productivity increased). In part due to leisure and increased levels of reproductive consumption by workers (sport, for example); in part because the agitation for an eight hour day stopped; in part because increased productivity and loss of control over work systems by workers were part of the arrangement. Unemployment remained constant.

Actual changes in the hours of labour aren't absolute fiats, changing one variable in the employment relationship while leaving others constant. They're complex social things, and the employers and employees are both active agents seeking constantly to change this bargain.

One example: in the late 1970s while the legal normal hours of labour were 8 hours in Australia, many manufacturing industries offered large volumes of overtime. This overtime was paid at a "penalty" rate: hours 9 & 10 at time and a half on day, 10+ on double time. Night and Dog shifts often incurring further loadings. This lead to a situation where workers sought "Doggy-Day" double shifts, because the dog shift loading bled on through a day shift.

The employer had changed the actual normal hours of labour to 16 hour days, as the workers had become dependent upon wages based on 16 hour days under loading. The law remained the same.

(This, incidentally, occurred at a time of "high" unemployment from the then social perspective, and from a period of increasing unemployment. Capital saved on training and disciplining a larger workforce; and, in the long term, removed control by workers over their own lives through the formally legal extension of the working day.)

Actual normal hours of work are only one variable in the volume of labour demanded and the volume of wages (ie: consumer demand). It is possible to maintain the amount of labour power while reducing hours if you increase productivity (or "skill") without increasing numerical employment. It is possible to maintain labour power while reducing normal formal hours if you maintain or increase actual worked hours through overtime. If hours are actually reduced, but demand is reduced, then unemployment could be increased (or you could increase production of capital goods, or goods for consumption by the very rich, or waste such as military production).

The section that follows is more specifically Marxist, and follows out of the whole Autonomist Marxist perspective, generally:

Reduction in hours does not necessarily solve unemployment: to do so reduction in hours would need to happen in a context where labour as a political force was strong enough to enforce enough of its general program that capital agreed to a change in the distribution of social product. You may wish to consider evidence on "The Long Boom" in "Fordism" or the "post-war Economic miracle." Here white workers in the first world generally got low unemployment, reduced hours, received elements of productivity increases in total GDP, meaning their share of total GDP increased or remained constant per head. This happened in a climate of generally strong conservative unions, a willingness of capital to accept reduced returns as consumed profit and a greater proportion of reinvestment in capitalisation, and states fearing what they perceived to be a successful society run for workers.

Since the mid 1970s this has changed and we've seen high unemployment, increased hours, and productivity increases returning to capital resulting in reduced share of GDP for workers.

So in one case we have low unemployment and low hours; in another high unemployment and high hours. I would argue that the variable is the strength of organised working class power.

In theory, that would be the case if all workers were equal.

The problem is that workers are basically UNEQUAL in productiviity. So if you reduce working hours across the board, you reduce the hours of the most productive people.

And if those "most productive" people are the ones that create new jobs, reducing their working hours would actually reduce job opportunities for others. That would be the case if, by law, Steve Jobs, Bill Gates, Mark Zuckerberg, etc. would be limited to working six hours a day, instead of 16.

• This answer could be improved by citing the theoretical basis for its claims. Feb 9 '14 at 5:59
• @SamuelRussell - seriously? You need a theoretical basis that people have different productivity (value produced per hour worked)? Feb 11 '14 at 18:53
• Yes actually, it requires a relation between the production of use-values and their evaluation as exchange values. I'm much more interested in "most productive people" being "job creators." This set of claims has a strong underlying theorisation that needs to be spelt out for it to be followed. It conflates "workers" and people rarely if ever covered by working day legislation. For this answer to be suitable it needs to indicate this background much more clearly. Because at the moment it reads as an argumentum ad absurdum with little knowledge of actual restriction of hours laws. Feb 11 '14 at 20:08
• (Please note that I'm not suggesting the content in the answer would not supply a full and adequate answer if expanded: I think it is "wrong," but if the answer were expanded to indicate where to seek proof for some of its assumptions or "set piece" arguments; the answer would then be a "good" stackexchange answer, and I'd upvote on the "good subjective" basis, even though I believe the underlying assumptions to be incorrect. I want this answer to keep its perspective, but to spell it out!) Feb 11 '14 at 20:34
• Tom, the maximum working hours don't apply for the entrepreneurs. If did, they wouldn't be working 16. Feb 16 '14 at 0:55