Economics in One Lesson

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HAPTER
8
Spread-the-Work Schemes
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Committee on Administrative Procedure, the railroads gave innumer-
able examples in which the National Railroad Adjustment Board had
decided that 
each separate operation on the railroad, no matter how
minute, such as talking over a telephone or spiking or
unspiking a switch, is so far an exclusive property of a
particular class of employee that if an employee of
another class, in the course of his regular duties, per-
forms such operations he must not only be paid an extra
day’s wages for doing so, but at the same time the fur-
loughed or unemployed members of the class held to be
entitled to perform the operation must be paid a day’s
wages for not having been called upon to perform it.
It is true that a few persons can profit at the expense of the rest
of us from this minute arbitrary subdivision of labor—provided it
happens in their case alone. But those who support it as a general
practice fail to see that it always raises production costs; that it results
on net balance in less work done and in fewer goods produced. The
householder who is forced to employ two men to do the work of one
has, it is true, given employment to one extra man. But he has just
that much less money left over to spend on something that would
employ somebody else. Because his bathroom leak has been repaired
at double what it should have cost, he decides not to buy the new
sweater he wanted. “Labor” is no better off, because a day’s employ-
ment of an unneeded tilesetter has meant a day’s employment of a
sweater knitter or machine handler. The householder, however, is
worse off. Instead of having a repaired shower and a sweater, he has
the shower and no sweater. And if we count the sweater as part of
the national wealth, the country is short one sweater. This symbolizes
the net result of the effort to make extra work by arbitrary subdivi-
sion of labor.
But there are other schemes for “spreading the work” often put
forward by union spokesmen and legislators. The most frequent of
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Economics in One Lesson
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these is the proposal to shorten the working week, usually by law. The
belief that it would “spread the work” and “give more jobs” was one
of the main reasons behind the inclusion of the penalty-overtime pro-
vision in the existing Federal Wage-Hour Law. The previous legisla-
tion in the States, forbidding the employment of women or minors
for more, say, than forty-eight hours a week, was based on the convic-
tion that longer hours were injurious to health and morale. Some of it
was based on the belief that longer hours were harmful to efficiency.
But the provision in the Federal law, that an employer must pay a
worker a 50 percent premium above his regular hourly rate of wages
for all hours worked in any week above forty, was not based primarily
on the belief that forty-five hours a week, say, was injurious either to
health or efficiency. It was inserted partly in the hope of boosting the
worker’s weekly income, and partly in the hope that, by discouraging
the employer from taking on anyone regularly for more than forty
hours a week, it would force him to employ additional workers
instead. At the time of writing this, there are many schemes for
“averting unemployment” by enacting a thirty-hour week.
What is the actual effect of such plans, whether enforced by indi-
vidual unions or by legislation? It will clarify the problem if we con-
sider two cases. The first is a reduction in the standard working week
from forty hours to thirty without any change in the hourly rate of
pay. The second is a reduction in the working week from forty hours
to thirty, but with a sufficient increase in hourly wage rates to main-
tain the same weekly pay for the individual workers already employed.
Let us take the first case. We assume that the working week is cut
from forty hours to thirty, with no change in hourly pay. If there is
substantial unemployment when this plan is put into effect, the plan
will no doubt provide additional jobs. We cannot assume that it will
provide sufficient additional jobs, however, to maintain the same pay-
rolls and the same number of man-hours as before, unless we make
the unlikely assumptions that in each industry there has been exactly
the same percentage of unemployment and that the new men and
women employed are no less efficient at their special tasks on the
average than those who had already been employed. But suppose we