Greetings ...
Thank you for your interest in my uk-policy posting. I am only a member
of the futurework moderated list, so I am not privy to all comments made
about my contribution. Let me take this opportunity, then, to comment on
your thoughtful response.
On Wed, 25 Mar 1998, Tom Walker wrote:
> Peter,
>
> ... As you no doubt are aware, polarization in hours
> of work is an important dimension in income polarization, as has been
> documented in several statscan studies. I was surprised, therefore, in
> reading your message that you made no reference to substantive, incremental
> policy proposals -- such as Lars Osberg has advanced in the recent federal
> "Collective Reflections" consultation on the changing workplace -- for
> "leveling the public policy playing field for hours of work".
>
> Osberg points out -- as have many others, including myself -- that the
> current regime of employment standards, the structures of payroll taxes and
> tax exemptions for employer-paid benefits create incentives for employers to
> favour longer hours for full-time workers and to increasingly use benefit
> deficient part-time, contract and contingent workers.
>
My comments to uk-policy pertain to common trends among OECD countries
with mature welfare states. While growing earnings inequality among males
is a more-or-less common trend, it does not seem to be caused by the same
factors in each country (e.g. changes in hours worked vs. wage
rates). It is true that hours worked have become more polarized in Canada
and this is a major cause of earnings polarization. As Garnett Picot
(StatCan, Analytical Studies Branch) also points out in the latest issue
of Canadian Business Economics, stagnating real earnings among males at
the bottom of the earnings distribution is also a contributing factor. It
should be noted, however, that polarization becomes more pronounced in
Canada when looking at family market income (suggesting the influence of
changes in household arrangements and investment income).
I am also familiar with Lars Osberg's work (he, too, is a contributor to
my research group) and I share his view that public policy has largely
ignored labour demand. I too share your concern about incentive
structures faced by employers (for further comment on this point, see:
Peter Stoyko, "'Creating Opportunity' or Creative Opportunism: Liberal
Labour Market Policy," in Gene Swimmer, ed., How Ottawa Spends 1997-98).
I am more cautious about endorsing state sanctioned reductions in the
work week (or redistributing hours worked generally) to encourage
employment or reverse earnings polarization.
Statistics Canada has conducted a microsimulation on the role that a
reduced work week would have on employment. Although I have a few
methodological misgivings about the study, it showed that work week
reductions would have only a neglible effect on aggregate employment
levels. In other countries, such as those in continental Europe, there is
a great deal of enthusiasm for this type of policy. However, if you look
at average hours worked per week in countries like Germany you will find
that they have been declining over the last several decades on account of
collective bargaining agreements. Despite this, employment growth has
remained stagnant. The Canadian Labour Market & Productivity Centre, a
union/management cooperative think-tank, has conducted case studies on
this too. They have discovered that using job sharing and reduced work
weeks is a highly particularistic activity; it works in some cases, but
there is a need for differences in arrangements and labour/management quid
pro quo from enterprise to enterprise, and sector to sector. This suggests
to me that some form of blanket legal regulation would unduly restrict
organizations and may even undermine some interesting innovations in
the field. The moral of this story is: first, do no harm.
I also doubt that this type of arrangement would reduce earnings
polarization. The experience of other countries suggest that if working
arrangements are highly restrictive, employers simply reduce wage rates.
Conversely, if wage rates are made rigid, they take it out on
working arrangements. This is part of the reason for variation across
jurisdictions re: respective role of wage rates over hours worked as
cause of earnings polarization.
But these are just symptoms. If policy makers are interested in shielding
workers at the bottom of the income distribution from greater earnings
polarization, they may want to address trends in unionization and
collective bargaining. Collective bargaining has become more
decentralized across most OECD countries, even in Canada's already
decentralized system (from enterprise to plant level). Those at the
bottom of the earnings distribution are less shielded from pressures from
international trade, technological development, etc. Policy prescriptions
here are highly contingent on the jursdiction in question.
Thank you for your attention.
Cheers, Peter.
