Challenge for Europe

Unemployment is a destructive pest in our society. It is leading to the worst way of sharing work and revenues: a fading minority of actors lives in fear of failing and losing their livelihood. They dedicate a growing part of their revenues to the maintenance of forced idleness, painful and sterile for a growing majority of inactive workers who are sinking into violence and hatred of themselves and others.

One way of contributing to the reduction of employment is to share the time worked by salaried workers. This work sharing is operational in most industrial economies, on various terms though it is often not understood like this: low rates of activity in women beyond the age of 25 in Japan, imposed part time in the United States, the putting in place of a large category of “handicaps” in the Netherlands…

A disputed issue of European debates

The question of the legal limitation of the work week is a recent and very controversial issue in European debates, particularly with the United Kingdom demanding to benefit from opt-out clauses. The main issue in these recent (and ongoing) debates was to limit the abuse of employers’ dominant position by acting on a key parameter of working conditions. The present proposal goes beyond the ordinary and considers work time as an essential tool in fighting against mass unemployment – which is becoming a new a major social issue with the recent economic crisis.

The expected benefits from a massive, coordinated and staged reduction in working time are as follows: (1) a reduction in poverty, (2) an increase in the level of training (necessary for adapting the number of qualified people to the shortfall in demand by various sectors), (3) an increase in charitable, civic, and associative activities and (4) reduction in the amount of time dedicated to commerce (because of the availability of clients on days other than the weekend).

Robien’s Law and Aubry’s Laws

The importance and effectiveness of the terms of this reduction in order to increase salaried employment was demonstrated by hundreds examples of businesses of all sizes and from all sectors in France in the years 1995-1997 (called “Robien’s Law”).

“Robien’s law” is different from subsequent laws adopted by France reducing the work week to 35 hours (“Aubry’s laws”) in four ways: (1) the time separating the promulgation of the law and its entrance into force, (2) decentralized negotiation on the final implementation, (3) the scope of the reduction in work time and (4) the wage reduction accompanying the reduction in work time.

The Aubry laws were applied immediately, in a centralized way, with a limited scope that did not impact on the number of days worked in a calendar period (week, month) and maintained a constant salary. All these elements minimized their effect.

Granted, a work is not a uniform measure: the adaptation to reduced work time demands a redefinition of jobs and tasks (implying specific procedures so that 2 or more salaried workers can take turns in the same job), as well as a massive requalification. All actions demand time and subtle adaptation to realities on the ground, business by business, branch by branch. Moreover, a slight reduction in work time is compatible with adaptation on the margin (RTT days), without redefinition of jobs or the creation of new jobs from the sharing of the same job. In the end, the dogmatic refusal of any reduction in salary (based on constant or increasing schedules) resulted in a simple supplementary cost to businesses, without visible benefits, and reinforced their ideological opposition to this measure.

The current proposition lifts all these sticking points and makes the reduction in the work time a efficient and massive tool for the reduction of unemployment.

Collectively accepting a reduction in our resources in order to do away with mass unemployment is like subscribing to a mutual insurance against unemployment, fear, misery, the spread of drug abuse and extortion.

Deciding to see our revenues decrease with the recent economic crisis, even slightly, in order to have more personal time for our family and friends, communal life, sports and culture is a way of proclaiming that money does not reign supreme over our spirits. It is a collective affirmation that material riches are not the ultimate goal of our existence and of how we understand that liberty comes at a price.

The implementation of this apparently simple idea demands that we take numerous precautions.

Our Proposals

We propose that we move to a legal work week of 33 hours over an average of four work days within the next two years. The timeframe of two years between the promulgation of the rule and its implementation is an essential element of the proposition in order to give time for the necessary adaptations and complimentary training to be undertaken.

The weekend keeps its current status. Factories and Offices keep the same hours (or are perhaps slightly lengthened).

In compensation for this 15% reduction of work time, salaries will be reduced by 5% on average (3% for the lowest salaries and 8% for the highest salaries).

The wage burden for businesses is constant: their unemployment contributions (on the order of 10% of total wages) are definitively abolished if they take on 10% more salaried workers.

The objective of the rule is to obtain a reduction in the gross work time for all salaried workers (in particular executives, including directors) from businesses.

The reduction in work time will be mandatory after an adaptation period of 2 years. From then on, businesses not conforming will be sanctioned in accordance with labour laws. Beforehand, the following incentive mechanism will be put in place.

The above reduction of social contributions will not be realised unless work time passes below a threshold equivalent to an average of four days per week. This threshold will be defined following a collective negotiation by branch or by business. This negotiation will define the amount of time to be taken into account in order to calculate the average work time (week, month, year, etc..) and the amount of the subsequent reductions (or temporary freezes) of salaries. These negotiations respect the following rules.

  • The total annual work time must be even less when the average is calculated over a long duration (an exchange between work time and flexibility);
  • The reduction in work time must result in whole days not worked by the salaried worker;
  • The reduction in salary must be smaller when the initial salary is small. The reduction in salary is always inferior to the reduction in work time.

On this side of the threshold, no reduction in the rate of social contributions is attributed and the rate of taxes on business is at an increased rate: it is set at 37.5%. The increased revenue this generates will be dedicated to assistance to businesses in the transition to the 4 day work week.

The reduction in social contributions of a given establishment is not applied unless at least 80% of personnel in the establishment in each of the following categories have an effective work time less than the threshold: workers, employees, technicians and maintenance agents, engineers and executives, and executive directors. As long as this condition is satisfied, the unemployment contributions of May 2009 will be reduced by 80% for the establishment concerned. If these unemployment contributions need to be increased in the future above the May 2009 rates, the establishment is also subject to this increase (but starting from a lower starting rate).

The tax rate on businesses is not restored to its May 2009 value for a given business unless all its establishments satisfy the above condition.

Respect for these arrangements will be controlled by time-keeping in the business: the work time of each salaried worker ( no matter what their status) is measured, registered, and recorded in the accounting documents. These documents form the legal source of data for the calculation of rates of unemployment contributions and taxes on businesses. Their falsification therefore comes under the penal code of financial fraud. These data are equally useful for the subsequent establishment of social indicators for the business or time-saving dedicated to training or developing of personnel.

This proposal is inspired by a thesis defended in 1993 by Pierre Larrouturou.

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