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    DOI: 10.1177/030981680007100101 2000 24: 1Capital & Class

    Robert WentMaking Europe work-the struggle to cut the workweek

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    1

    Making Europe workthe

    struggle to cut the workweek by Robert Went

    THE LAUNCH OF THE EURO on 1 January 1999 has increased the pressure

    for EU-wide wage restraints and further flexibilization of labour markets.In the run-up to the European Union summit in Cologne, Dutchministers Zalm (finance) and De Vries (social affairs and employment) urgedtheir EU colleagues to Europeanise government intervention aimed at keepingwages down, so that profits will go up and (supposedly) more jobs will becreated. The OECD (1999: 17) has also said, in a special report about the EMU,There is no guarantee that EMU will set forces in motion that wouldautomatically lead to a better functioning of Euro area labour markets. Thesooner countries implement policies that foster greater labour market flexibility,the more they will be to absorb future shocks. But the fight for Europe is in fullswing (Dornbusch, 1997), because in several European countries, mostimportantly France, 1 there are trade unions, social movements and parts of thepolitical left that oppose such policies, and propose a shorter workweek and/oran increase in purchasing power instead. The European Union is facing very highunemployment,and two antagonistic social logics are counterposed to each other(Coutrot, 1997: 40).

    The impasse of European employmentpolicies

    High unemployment levels are undoubt-edly Europes biggest social problem.Official unemployment is 18 million, but 30million is closer to the truth. Althoughpolicy makers take great pains to explainhow seriously they take the problem,

    neither the European Commission nor theEuropean Central Bank (ECB) expects areduction in the coming years, making clear

    that official European employment policiesare in a blind alley. The dominant analysisof persistent unemployment in Europe issummarised by Sterdyniak et al .:

    According to the liberal discourse,European unemployment is not due toproblems of macro-economic manage-ment. It is the result essentially of rigidities

    in the labour market, which handicapEuropean rms in competing on the worldmarket. Wages are supposedly insensitive

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    to the conjunctural situation, which meansthat firms are forced to adjust theiremployment levels rather than their wagelevels. Wage scales are supposedly notopen enough and unskilled labour is toohighly paid: this explains why unemploy-ment rates are higher for less educatedand less-skilled workers. Unemploymentbenets are supposedly too high, whichdiscourages the unemployed from actively seeking work and forms a brake on wagedecreases during recessions. Making peopleredundant is supposedly too difficult, andwork schedules not exible enough. It is

    therefore supposedly necessary toderegulate the labour market, abolish theminimum wage, cut social spending.(quoted in Hoang-Ngoc, 1996: 92-3).

    We will now look briey at the four centralelements of this mainstream approach. 2

    a. Unemployment is not a macro-economic

    problem? According to the dominant paradigm,unemployment in Europe is not caused by insufficient economic growth, but the resultof the fact that growth does not lead toenough jobs. The solution to unemploy-ment should therefore be sought primarily in micro-economic policies to increase the jobs intensity of growth. The problem withthis theory is that economic growth sincethe mid-seventies has been much lowerthan during the so-called post-SecondWorld War golden years of capitalism,while unemployment has risen explosively during those same years of lower growth.Since the mid-seventies, when the post-war expansive long wave of economicgrowth ended and a depressive phase began(Mandel, 1995), there has been a drop in the

    rate of economic growth. The capitalistworld entered a generalised recession, andafter it turned out that traditional Keynesian

    solutions did not work any more, a counterrevolution in economic policy took place(Grieve Smith, 1996: 206; Went, 1996: 83-101). This has led, since the early eighties, torestrictive macro-economic policies. Sincethen economic policies have had low ination as their main goal. This obsessionwith price stability is also codied for theEurope of the Euro in the Maastricht Treaty and the Pact for Stability and Growth.According to official theory lower inationwill lead to more economic growth, buteven mainstream empirical research showsthat this justication cannot be maintained

    (Barro, 1995; Bruno, 1995; Moosa, 1997;Sorel, 1996; Stanners, 1993; Stanners, 1996).Moreover, upholders of the currentorthodoxy, who argue that ination comeswith a cost (Moosa, 1997: 652-4), neglectthe social and human price of unemploy-ment, such as reduced material output,increasing poverty, social inequality,alcoholism, drug addiction and crime

    (Kitson, Michie and Sutherland, 1997:2356; Rifkin, 1996: 178, 208).

    b. Constrained by globalization ? Every day, it seems, citizens of the EU aretold that in these days of globalizationEuropean companies are involved in a lifeand death struggle with competitors in therest of the world, especially with the UnitedStates and Japan. But globalization is oftenexaggerated (Ruigrok and Van Tulder,1995; Went, 1997) and even the EuropeanCommission minimises the consequencesof globalization for the EU (EuropeanCommission, 1997a). To begin with, mosttrade by EU countries is intra-EU trade,and this pattern is stable or even gettingstronger. At less than 10 percent, theopenness of the EU economy is below that

    of the US (12 percent). According to theEuropean Commission (1997a: 52-3), theglobalization of trade only concerns a very

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    limited share of the EU economy and tradewith low-wage countries is not only very limited but also in balance. TheCommission also notes that an increasingshare of Foreign Direct Investment (FDI)59 percent in 1994from member statesgoes to other EU countries. Displacementof production because of high wage costs israre, limited largely to textiles, shoes andtoys. The EU is almost a closed economy,and neither globalization nor low-wagecountries can justify the current Europeansocio-economic agenda.

    c. Too high wages? The third recurring explanation for thehigh level of unemployment in the EU isthat wages are too high. Not strange becausefor official economic theory unemploy-ment is always and everywhere a wagephenomenon, to paraphrase MiltonFriedman (Husson, 1999, 175). If protsincrease, the argument goes, more will be

    invested and unemployment will decline.Helmut Schmidts famous theoremTheprots of today are the jobs of tomorrowleads to various proposals by free-marketliberals (reduce the minimum wage andsocial benefits) and social democrats(reduce the burden of social premiums onwages) which have the common aim of limiting wage costs (Hoang-Ngoc, 1997:193). The principal problem with thistheory is that the rate of return on capitaland the share of capital income in the EUhave increased sharply since the early eighties, while during the same yearsunemployment increased instead of decreasing. One explanation for this blatantcontradiction is that for individualemployers wage costs are an expense, whilefor all companies together wages are

    responsible for most demand. Wage-cutting is therefore not a solution tounemployment because it reduces

    purchasing power at the same rate as itreduces costs (Grieve Smith, 1996: 11).3

    During the post-war golden years thereexisted temporarily a more or less stablerelation between increases in production,labour productivity and wages, whichmeant that steadily growing productioncould be bought by wage-earners. But thisFordist coherence has disappeared in the years since the generalised recession of themid-seventies (Hoang Ngoc, 1996; Husson,1996). Since the early eighties the share of capital income in national income hasgradually risen, and according to the

    European Commission (1997a: 29) protsas a share of national income are back to thelevel they were at in the early seventies.Because employers only invest when they expect higher sales and sufficient prots,higher prots as a result of wage restraint donot automatically lead to more investmentsand employment, and the opposite may even be the case. If the Dutch policy to

    restrain wage increases were to be followedby other countries in the EU, Europe wouldnd itself in crisis, because demand wouldfall even more.

    d. Rigid labour markets? Very popular among policy makers andinternational organisations is the theory that unemployment in the EU is highbecause labour markets are too rigid andnot exible enough. The idea behind thistheory is that the labour market is a marketlike any other, in which equilibriuminthis case full employment will be reachedas soon as those who demand and thosewho supply labour behave rationally andadapt their prices sufficiently. From thisapproach follows the policy prescriptionthat the exibility of the labour market has

    to be increased, for example by reducing oreven abolishing the minimum wage,Iowering unemployed benets and making

    Making Europe Work 3

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    redundancies easier (see for exampleSiebert, 1997). Again, there is evenmainstream research that questions thistheory. Much to the chagrin of the editor of The Wall Street Journal (6/7/1999) theOECD for example joined the doubters inits latest Employment Outlook: Laboreconomists at the Organization forEconomic Cooperation and Developmentpartly reversed the findings of theirlandmark study of ve years ago that linkedhigh unemployment and labor laws. Somemight say that, for reasons known only tothemselves, they reversed the laws of

    economics as well. Earlier Nickellconcluded after inquiry to what extentfrequently mentioned rigidities such as toogenerous benets, strong trade unions andlack of education can explain Europeanunemployment:

    It is clear that the broad-brush analysisthat says that European unemployment

    is high because European labor marketsare rigid is too vague and probably misleading. Many labor marketsinstitutions that conventionally comeunder the heading of rigidities have noobservable impact on unemployment(Nickel, 1997: 73).

    And after comparing the effect of institu-tional factors on employment in the USwith those in Germany, England, Franceand Italy, Buchele and Christiansen (1998:134) also conclude that such factors cannotexplain the general rise of unemployment,and that further research should pursuethe suggestion of several analysts that theoverall upward trend in unemploymentrates is related to a global decline in thegrowth of aggregate demand throughout

    the advanced industrialised economies. Incomparing the US and the EU, the US lowerunemployment gure is often credited to

    the fact that its labour market is moreexible. But Eatwell (1997) shows that thislower gure for people who are officially jobless is a consequence of the fasterincrease in the number of (often badly paidand insecure) jobs with low productivity.Following Joan Robinson (selling matchboxes in the Strand, cutting brushwood inthe jungles, digging potatoes onallotments), he characterises suchemployment as disguised unemployment(see also Mishell and Schmidt, 1995). Forthe Netherlands Delsen and De Jong (1997)calculate that 60 percent of recently created

    new jobs are marginal jobs. As they pointout, this fact has important social andeconomic consequences, because these jobs are very sensitive to conjuncturaldevelopments, lead to poverty anddependence, result in lower investment ineducation and training, and affect the socialinfrastructure. 4

    In short, it is no accident that European

    employment policies are in a blind alley.The rationale for the dominant approachis highly questionable, and the presentpolicy agenda is first and foremost anexpression of a changed relationship of forces between labour and capital to thebenefit of the latter. Fundamentally, capitalis not really interested in solvingunemployment (Coutrot, 1997: 47-50). In1968 Business Weekwrote: You have tokeep unemployment high enough so thatworkers don't get too greedy (quoted inPollin and Zahrt, 1997: 49). Recently, theparliamentary spokesperson on financefor the Dutch social-democratic party (PvdA) Van der Ploeg (1997: 27) wroteto the same effect when he tried toconvince the FNV, the main trade unionfederation in the Netherlands, that it

    should drop the goal of reaching fullemployment: Only when unemploymentis high enough can it have a preventive

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    effect as punishment for those who arepicking their nose during work time.

    An alternative logic for full employment

    To be able to successfully attack Europesmost important social problem it will benecessary to put full employment back atthe top of the political agenda. 5 Chances forsuch a Europe-wide change of prioritieshave increased, because as the neo-liberalexplanations for unemployment becomeless and less credible, the political spaceand support for alternatives is growing. In

    several European countriesincludingFrance, Italy, Spain, Germany and Belgiumthere are trade unions, social movementsand parts of the political left that want toght for a shorter workweek. 6 A real ghtagainst unemployment means a break withthe current economic orthodoxy and withthe neo-liberal market ideology. Theobvious mechanism to reduce unemploy-

    ment drastically is a collective shortening of the workweek without loss of pay and withcompensatory hiring, enforced by (European) law. Such a reduction of theworkweek makes sense because it is betterand more social if one hundred percent of the population works ninety percent of the time than the other way around. Itshould be collective and enforced by law ,because only then will all companiesparticipate, even the smaller ones, so thatthe effects on employment are maximised.It should also be without loss of pay,because since the early eighties prots haverisen spectacularly in the EU as the gainsfrom the yearly rise of productivity havebeen unilaterally appropriated by capital(Coutrot, 1997; Husson, 1996). Husson(1999: 115) calculates for the four biggest

    countries in Europe that 92 per cent of increased productivity went to wages inthe years 1965-1981, but only 48 percent in

    1981-1997. In most countries, the gradualreduction of the workweek stopped at thebeginning of the eighties. A shorterworkweek should involve compensatoryhiring , nally, to avoid its leading only to anincreased workload and more stress andflexibilization instead of additional jobs.The extent to which these conditions canbe met is not beforehand given butdependent on the relationship of forcesbetween capital and labour, that is on thepower of workers, unions, and self-organisations and movements of unemployed.

    There are in principle many advantagesto shortening the workweek in this way.

    1.) It potentially creates many new jobs,even in cases where it is not possibleto enforce complete compensatory hiring. Depending on how many hoursthe workweek is reduced and on thelevel of compensatory hiring, research

    institutes in France estimated that thenumber of newly created jobs couldeven go up to 2,450,000 (Chanteau andClerc, 1997: 31).

    2.) When everybodys workweek isreduced, new jobs are created at alllevels. As a result more people can workat the level they are trained for, so thatthere is less downward pressure on mostnotably the least-educated and -trained,who are now often the rst victims of unemployment.

    3.) A collective shortening of the workweekgoes against the current sex-segregationof the labour market, due to whichwomen especially work (and earn) parttime, very often involuntarily.

    4.) An important argument often used (e.g.in France, Denmark, and Germany) to

    support a reduction of the workweekis that less work will improve the quality of life and health, with more free time. 7

    Making Europe Work 5

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    5.) A shortening of the workweek changesthe relationship of forces betweencapital and labour: with a tighter labourmarket unions can make moredemands.

    6.) When every person who would like towork gets a job and this new employ-ment is paid for out of capitals greatly increased share in the national income,social differences will decrease.

    For all these reasons it is no wonder that(international) policy-makers, employersand mainstream economists strongly

    oppose a reduction of the workweek: cuts inthe working week are always the result of afundamentally conictive process.

    It is important to realise that theeffectiveness of a reduction of the workweek would be increased by European co-ordination, because that would mean thatcountries reinforce rather than undermineeach others efforts, and real differences

    among countries would not be increased.Contrary to current practice, the EU wouldtherefore have to initiate and co-ordinatecross-border employment policies.8 TheFrench social-democratic candidate Jospinpledged during his election campaign in1997 to create 700,000 new jobs by reducingthe work week by 10 percent without loss of pay. Most of his social democraticcolleagues in the rest of Europe commentedthat he would not be able to do this, becauseof the consequences such a measure wouldhave for the competitive position of Frenchcompanies. The alternative response to thisproblem is that not only France but all EUstates should reduce the workweek at thesame time by 10 percent without loss of pay then their relative positions would notchange, and progressive social policies

    could less easily be frustrated by capitalight or investors strikes. The ght againstunemployment, which cannot be won on a

    national level, therefore also means astruggle for a different Europe.

    In most trade unions such a re-orientation will require hard ghts. From1960 to 1980 many trade unions in Europelaunched struggles for a reduction of theworking week, as a means to share thebenets of productivity increases. But inthe 1980s and 1990s capital went more onthe offensive and the downwardconvergence of working time acrossWestern Europe was broken by the anti-labour offensive of each nationalbourgeoisie (Dupont, 1998: 24). Todays

    European Trade Union Confederation(ETUC) strategy is characterised by [a] anapproach to employment in which thereduction of the working week has only ageneral place; [b] the centrality, not of any general demand, but of a method:negotiation; and [c] acceptance of flexibilization on condition that it isnegotiated (Pernot, 1998: 90). Especially

    since the introduction of the Euro, the only real alternative is building a strong European dimension into demands; mobilis-ations of labour and social movements fora social Europe; and a process of levellingup of national norms. Moreover, withoutsuch common mobilisations and demands,advances in each country will be partialand permanently threatened. This has beenunderstood very well by the pan-EuropeanEuromarch campaign against unemploy-ment, job insecurity and social exclusion(see Mathers, 1999: 15-20).

    A European-wide campaign for areduction of the working week can be animportant element of a strategy to improveliving and working conditions, cut un-employment, and reduce the unequaldistribution of wealth. But of course it is far

    from an answer to all social and economicproblems. First, a shortening of the workweek can not be seen in isolation, butas

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    for example the Euromarches have pointedouthas to be part of a broader strategy,including the extension and rebuilding of the public sector to be able to guaranteebasic rights for all, and a guaranteedminimum income for everybody. 9 Andsecond, there exists under the currentconditions the danger that reductions of the workweek will be used by governmentsto force unemployed into precarious jobs,and by employers to increase exibilization.This last thing is increasingly the case inFrance, and also in Italy, whereRifondazione (Refounded Communists)

    spectacularly forced the Prodi governmentto accept a reduction of the workweek in

    2001. The union federations have reactednegatively to this agreement, and the few examples of a reduction of the workweeksince then involve terrible concessions by the workforce in terms of flexibility(Rigacci, 1998, 28). However, such anegative outcome is not a fatality, but aquestion of building movements towards adynamic of social change. As Vercammen(1998) notes: The bourgeoisie has alwaysresented the lazinessof the common folk.For them, our free time is a lost opportunity to exploit our labour power. For 150 yearsthe length of the working week has been

    dened through class struggle. This is stilltrue today.

    Making Europe Work 7

    ______________________________Notes

    1. See for example Appel des economistes pour sortir de la pensee unique, 1997; Aznaret al ,1997; Chanteau and Clerc,1997; Coutrot,1997;Gaspard,1997; Guedj en Vindt,1997; HoangNgoc,1996 and 1997; Husson,1993 and 1996;Rigaudiat,1993; Salesse,1997.

    2. According to another popular theory (see forexample Rifkin, 1996 and Dunkerley, 1996),the present high level of unemployment isthe result of a rise in productivity which iscaused by the increasing use of computers,information technology and robots. Theproblem with this thesis is that the rise of productivity in the eighties and nineties ismuch lower than in the fifties and sixties,when full employment was more or lessmaintained (Sengenberger,1996; Went,1996)

    3. Kalecki (1977: 26) noticed this as early as 1935:Now, one of the main features of the capitalistsystem is the fact that what is to the advantageof a single entrepreneur does not necessarily benefit all entrepreneurs as a class. if oneentrepreneur reduces wages he is ableceteris paribusto expand production; but once allentrepreneurs do the same thingthe result

    will be entirely different.4. Eatwell (1997: 93) points to another price thatsociety and future generations pay for the big

    increase in marginal, low-productivity jobs:An increase in disguised unemployment isclearly a waste of resources, since labour isworking at a level of productivity below itstrue potential. Moreover, high levels of disguised unemployment when associatedwith very low wages may discourageproductivity-boosting innovation in othersectors, so slowing down the overall rate of productivity growth.

    5. See also the memoranda published by thenetwork of European Economists for anAlternative Economic Policy: Full Employ-ment, Social Cohesion and Equity for Europe:Alternatives to Competitive Austerity (May,1997), and Full Employment, Solidarity andSustainability in Europe: Old Challenges, NewOpportunities for Economic Policy' (December1998).

    6. See: Dossier on the 35 hour week in Europe,International Viewpoint no. 297; La reductiondu temps de travail en Europe, numero special,Chronique Internationale de lIRES(September1998); La reduction du temps de travail,Futuribles analyse et perspective, no. 237

    (December 1998); Working time policy inEurope,Transfer: European Review of Labour and Research, vol.4/4 (Winter 1998).

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    7. For Ernest Mandel the struggle for a shorterworkweek was always of decisive importancein a strategy for a really self-managed socialistsociety without exploitation, oppression andbureaucracy: (N)o real qualitative progress

    can be made toward self government unlesspeople have the time to administer the affairsof their workplace or neighbourhood. As longas the average man or women spends ten hoursa day at work or between home and worknotcounting womens second workday athomethey have neither the time nor thepsychological inclination to spend anotherfour hours attending meetings or performingadministrative labour. Self administration and

    self management will then to a large extentremain formal and ctitious. irrespective of any bad intentions of political parties,politicians or entrenched bureaucrats (Mandel,1992: 202).

    8. In 1993, after pathetic procrastination andhesitation, the European Commission nally produced a directive, fixing the maximumworking week at 48 hours, dened as a weekly average over four months. This directiveimposes 11 hours daily rest (the minimumtime between the end of one shift and the

    beginning of the next) and a break of at least 24hours every week. Paid holiday is xed at aminimum of four weeks. In other words, theEU is xing worse minimum conditions thanexist in every member state except Britain,

    which refused to approve the directive InDecember 1996, the European Court of Justicerejected Britains protest against the directiveon maximum labour time. The application of the clauses on the maximum 48-hours weekand four weeks paid annual holiday, representssignicant progress for many British workers(Dupont, 1998: 25-6).

    9. A group of intellectuals, among others Gorz,Negri and Lipietz, published an open letter in

    Le Mondein 1996 calling for common sense,humanity and equity. Concretely, they proposed a reduction of the workweek, a thirdsector of the economy which is not based onprot but on social and ecological priorities,and an unconditional guaranteed income forall. This statement seems to have had quitean impact in Italy after it was published inIl Manifesto(27/10/1996). Thankswithoutimplicating him in any sense in the open letteror this articleto Massimo De Angelis, whokindly provided this information.

    8 Capital & Class #71

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