The Coronavirus is already causing great economic difficulties, and the situation is expected to get worse. Jobs will be a central question of any recovery, and as Stewart Smyth argues, in order to protect workers, we will need a 4-day week.
While we are all trying to comprehend the number of cases, hospitalisation and deaths caused by Covid-19, the scale of the predicted economic collapse is still somewhat nebulous. This is both in public consciousness and also governing circles. At the start of April the Central Bank of Ireland published its regular quarterly bulletin; the numbers shocking both in scale and uncertainty.
By the end of March, unemployment in the south (on the Live Register) struck 500,000. This number includes 283,000 workers receiving the COVID-19 Pandemic Unemployment Payment. To get a sense of the scale involved, the Central Bank reported the current unemployment rate at 5.5 per cent. This is expected to rise to 24.7 per cent by the end of June and falling to 10.5 per cent by the end of the year. Peak unemployment after the 2008 crisis was in 2012 and hit 16 per cent.
These predictions are probably overly optimistic as they assume the crisis will be over within 3 months, implying the economy returns to something like its previous normal state for the latter half of the year. The economy overall is expected to contract by 11 per cent during the year, with a huge fall of up to 30 per cent in quarter 2 (April to June) and recovery in the rest of the year.
In-depth statistics are not yet available for the north, but the picture is just as bleak. At the end of March, management consultants EY predicted peak job losses of 175,000 in Northern Ireland.
We need jobs
Given these levels of unemployment, job creation will be central to the recovery. Our governments won’t be able to repeat the previous trick of quantitative easing (QE) – flooding the financial system, and particularly the banks, with cheap money, as they did after the global financial crisis in 2008. In part, this is because interest rates are already so low due to ongoing QE actions. More importantly, there is no link between QE actions and job creation.
Post-2008, quantitative easing schemes were supposed to allow the banks to become financially stable and recommence lending to stimulate productive economic activity. In reality, the money was hoarded by the banks and then channelled through the financial networks into speculative asset investment activity – see for example the vulture funds buying up residential properties. This is the essence of financialisation.
At the same time the banks have been shedding jobs. In 2018 the Irish Times reported that almost 50 per cent of jobs from 2008 had been lost in the sector.
A 32-hour / 4-day week
Austerity cuts to public services, won’t work either – in fact this crisis has shown us we need to value our key-workers more and build-up (not cut) essential services resources that can be called upon for when the next pandemic or crisis hits. The old economic ideas are bankrupt for a post-COVID-19 world.
We need to implement new ways of working – ways that only a few weeks ago were unthinkable. One of which that will help with job creation is a 4-day working week. The idea is simple. By reducing the normal working week by 20 per cent (e.g. from 5 to 4 days, or 40 to 32 hours) for every 5 jobs pre-COVID-19, we will have 6 jobs post-Covid-19.
In addition, to job creation reducing the working week has enormous social benefits – a reduction in the pressure on the childcare system; a proportionate reduction in commuting, resulting in reduced greenhouse gases and pollutants; time to engage with adult education and lifelong learning; reskilling or upgrading skills for the new technology-related jobs of the future.
For those in our society (mainly women) who are battling the double or triple burden of juggling work, caring for elderly relatives and childcare, a reduction in the working week allows for less pressure on the caring responsibilities. Or an extra day will allow us all engage with those activities that make life worth living – playing music, writing, baking, painting or whatever your passion is.
To make a four-day week work, and help the economy start again, there must be no reduction in the wage levels from before the crisis.
One route to do this was adopted by the British Labour Party at their conference last autumn (and in their election manifesto), where the reduced working hours would be paid for from increased productivity, over a ten-year lead-in time. The Labour Shadow Chancellor, John McDonnell, in support of the policy, stated: “It’s not just about a fulfilling life at work, we should work to live, not live to work.” It is of course right that workers should benefit from changes in technology, but we don’t have ten years to see such benefits realised.
A second route to a four-day week is being considered by the Irish Labour party, and is based on the experience of New Zealand company, Perpetual Guardian, where the reduction in the working week was matched by an increase in productivity of the same amount.
While there may be benefits through either improved future technology or current productivity, neither of these routes will lead to increased employment.
A class issue
Instead socialists understand that the structure of work and working practices are the outcome of the ongoing struggle between workers and employers. Throughout the nineteenth century campaigners (such as utopian socialist Robert Owen) and organised labour groups (including the International Workingmen’s Association) won legislation introducing regulation of working hours, initially to ten-hours, then reduced to eight-hours a day.
In the early twentieth century, James Connolly, recognising the lack of employment opportunities at home was giving rising to emigration, supported the call for an eight-hour day. Connolly said: “our people are flying to the uttermost ends of the earth; seek to retain them at home by reducing the hours of labor” and with an eight-hour day “employment would be provided for thousands”.
This is the radical history from which we can take inspiration today, and struggle for a 4-day working week.
Any such policy will be fought tooth and nail by the employing class, their political lackeys and the hired-prize fighters that constitute most industry groups, think tanks and the news media. This is what happened to the British Labour party policy during the general election last year. The charge was made that in certain sectors, such as the NHS, a 32-hour working week was impossible to implement.
Labour spokespeople were not able to counter this argument effectively, as their policy was based on improved productivity through technological advances. If they had based their policy on seeking to generate more employment, then there are no difficulties. For shift work, a four-day working week does not necessarily mean working shorter shifts (although working 13+ hours straight, as many healthcare professionals do, should be revised anyway). Instead, the rest days would become more plentiful.
For example, a typical monthly shift pattern for nurses and midwives is three thirteen-hour shifts a week (leaving aside the issue of breaks that were a “give-back” in the Lansdowne Road agreement). This results in twelve shifts a month. If a four-day week is introduced this shift pattern would be reduced by at least two shifts per month.
Of course these shifts still need to be covered and this is where we can employ more nurses and midwives and, following Connolly’s aim, keep more of our new graduates from emigrating by offering a more attractive work package, same pay for less hours.
Implementing this across the public sector will result in more jobs and also an increased wage bill, in the short-term at least, that the government will have to fund. Following the current crisis there is no way round an increase in government borrowing – that will happen.
The issue is about what this money is used for: putting it in the pockets of the bosses who seek to put people out to work despite the lockdown, or the workers who are on the frontline day-in, day-out. Creating thousands of new jobs in vital public services should be a top priority.
In the private sector the costs of implementing a 4-day week will be borne by the shareholders, through lower profits and dividend payments. As outlined above, these may only be short-term costs once technological advancements emerge. The intention behind the policy is not to put small businesses into financial difficulties, so a form of government subsidy could be put in place, with stringent qualifications attached for such businesses. And those on hourly pay rates will need to see their rate increase proportionately.
None of this will happen by itself or be handed down by those on high. Achieving a 4-day week will require significant pressure from social movements and especially the unions. To date our union leadership has been conspicuous by their absence during the COVID-19 crisis – they will not lead a charge on this, unless they are forced to by pressure from rank and file union members.
A 4-day week is an eye-catching proposal, that could quickly gain support among union members and workers more generally. Most importantly, if successful such a policy will help us recover from the impending recession on the basis of supporting working people. Because, one way or another, we will need a massive state intervention – an entirely new way of doing things – if we are to learn the lessons of the recent past and have a humane outcome to the current crisis. That intervention must be in our interests, not those of financial elites.