Working hours – the worm turns

John Quiggin28 Comments

Ross Gittins latest column says

the great epidemic of overwork is subsiding. Of late, we’re working less, not more. And, in any case, the latest research suggests the whole story’s been a bit overdone.

The first point is, I think correct. Gittins quotes ABS data to show that average working hours for full-time employees increased from 42 to 45 hours a week between 1982 and 1994, levelled out, and have declined slightly over the past two years.

This seems pretty much consistent with the anecdotal evidence. Concern about increasing working hours started in the early 1990s and was widespread by the mid-1990s. There was a clear cultural shift around this time – people who willingly worked very long hours, who had typically been presented in very positive terms in the 1980s were presented much more negatively. A particular turning point was the publication of an email sent out at 10pm by a partner in a law firm complaining that no-one else was working. He was held up to universal ridicule. And increasingly, people decided the game wasn’t worth the candle and pulled out of full-time work altogether. Clive Hamilton’s “downshifters” are part of this response. So the decline in working hours is basically an illustration of Stein’ Law “If a trend is unsustainable, it won’t be sustained” I’ve been pointing out the unsustainability of the push to longer worker hours and greater work intensity for quite a few years (PDF file), so I’m not surprised to see a turnaround.

On the other hand, I don’t agree with the claim that “the whole story’s a bit overdone”. It’s important to observe that the rise in fulltime working hours was a reversal of a trend that had continued for more than a century. It was accompanied by a substantial increase in job stress and job insecurity, and these things were needed to induce workers to put in longer hours. Gittins makes the point that a lot of unpaid overtime was “compensated” by salary packages, but the shift towards such packages in the 1980s was precisely one of the devices used to extract more work effort, along with the conversion of employees into supposedly self-employed “contractors”.

Gittins also quotes data on the relatively small proportion of employees who said they would rather work less hours for less money, but doesn’t mention the large proportion of those on long hours who said they wanted to work less hours for the same money (12.4 per cent of those working 49-59 hours and 21 per cent of those working 60+ hours). This response “was not a preference option, [but] interviewers recorded this response when it was given. ” You might say this is simple wishful thinking, but very few people working part-time or standard full-time hours gave this spontaneous response. I’d interpret it as the response of people who feel that they’ve been pressured into working excessive hours for no extra compensation.

Beazley beaten!

John Quiggin12 Comments

Of the many commentators in both print and blog media who’ve written their views, I think the most accurate were, Margo Kingston and Ross Gittins. My main views:

First, the poll-driven choice of Beazley as the anti-Crean candidate turned the ballot into a referendum on the ‘small target strategy’ run by Beazley (advised by Swan and Smith) in 2001. My waning hopes for the Federal ALP have been strengthened slightly by the fact that Beazley was so thoroughly beaten.

Second, having positioned himself as the ‘policy’ candidate, Crean now has to actually deliver on this. In particular, , he has to decide whether he’s for lower taxes or higher services. At present, as Ross Gittins points out, Labor is the ‘denial of opportunity cost’ party. Of course, this is true to some extent of all opposition parties.
Given the absence of any serious policy initiatives from Labor for the past seven years, and the sporadic attention of the government to anything more than triumphalism and wedge politics, a serious policy program could make a big impact.

Third, and assuming he meets the policy test, Crean’s position has been strengthened by this episode. He called Beazley’s bluff, faced him down and beat him decisively, and, in the process, acquired some sort of identity. I don’t know whether this will be reflected in the polls, but it should be.

A snippet on foreign currency loans

John Quiggin13 Comments

I’m always thinking about new things to do with the blog. Some ideas, like the Monday Message Board, have been successful, others haven’t worked quite so well. What I’m doing here is posting a couple of paras I was going to put into an opinion piece, but which I’ve had to cut for space reasons. I hope the blog will provide a way of implementing an idea I’ve had for many years and never fully realised, that of a text database of thoughts on various topics, useful quotes and so on, that I can dip into as needed in my work. Of course, even though a lot of the material won’t be of general interest, I still welcome comments – in fact, comments on esoteric topics are often more useful to me than debate on current issues. I’d also welcome thoughts about the merits or otherwise of this idea and proposals for other uses of the blogging medium.

The idea of offering loans denominated in Swiss francs, pushed vigorously by the major banks received a rapturous receptionin the mid-1980s . What could be more natural as a consequence of financial deregulation than that Australian borrowers should gain the benefits of low interest rates prevailing overseas. No-one bothered to do the elementary risk analysis that would have shown this to be a fundamentally unsound idea, and even in retrospect, its failure was widely seen as the result of bad luck.

In reality, the product was equivalent to the combination of an ordinary Australian-currency loan with an unhedged bet on the foreign exchange market. The interest rate differential between franc-denominated and dollar-denominated loans reflected a market expectation that the dollar would depreciate. Borrowers were invited to bet that the market was wrong. Such a bet made no sense for the vast majority of borrowers and in fact the depreciation was even greater than the market forecast.

Despite the obvious impropriety of advising financially unsophisticated customers to take on gratuitous risks, the banks were generally successful in enforcing their contracts, except where their initial incompetence was compounded by subsequent wrongdoing, such as the suppression of evidence. Judges and the legal system more generally proved incapable of coming to grips with the basic issues.

Another counterexample to consequentialism

John Quiggin7 Comments

Jason Soon alerted me to this obituary for Sir Bernard Williams in which he is said to have refuted utilitarianism, or rather consequentialism, with arguments such as the following

Williams pointed out, a very quick way to stop people from parking on double yellow lines in London would be to threaten to shoot anyone that did. If only a couple of people were shot for this, it could be justified on a simple Utilitarian model, since it would promote happiness for the majority of Londoners.

I guess one shouldn’t try to refute an obituary, but it’s better for an intellectual to be criticised than ignored, so I will respond with the observation that I hope this wasn’t really one of Williams’ strongest criticisms of utilitarianism. Does anyone really think such a policy would actually work in the way claimed?
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Getting and spending

John Quiggin1 Comment

Via Jeremy Osner a nice post by Mark Kleiman with a critique of the Protestant Work Ethic.
Tom Runnacles has more. In particular, I agree with his view that the growth in American and Australian (standard fulltime) working hours over the past twenty years has more to do with labour market (de/re)regulation than with ingrained cultural preferences. After all, who would have believed in the 1970s, that the British would be criticising the Germans for laziness. And although the cultural stereotypes haven’t caught up, Americans now work harder and longer than Japanese or Koreans.

What I'm reading, and more

John Quiggin15 Comments

The Pope’s Battalion’s: Santamaria, Catholicism and the Labor Split by Ross Fitzgerald. Not surprisingly, perhaps, I’m more sympathetic to Santamaria now than I was twenty-five years ago, which was about the end of his period as a politically influential figure. Still, reading this book reminds me how much there was to disagree with as well as to agree with in his thought and actions.

On the movie front, I’ve on a thematic kick and am looking at movies set in Brisbane or, more generally, in Queensland. So far in the last month or so, I’ve seen Swimming Upstream an autobiopic by Tony Fingleton, He Died with a Falafel in his Hand (claimed as) autobiopic by John Birmingham and Praise, a quirky but enjoyable film about an odd couple. When I lived in NQ I watched and enjoyed All Men are Liars, filmed in South Johnstone. Any further recommendations much appreciated.

I’m also thinking about trying to watch all the Oz movies with one-word titles, Praise, Proof, Innocence and Lantana come to mind from recent years, but there must be many more.

New on the website 3

John Quiggin7 Comments

Another Fin article is up on the site Voters favour better services from 22 May. Here’san excerpt.

If tax scales were indexed, the community would face a clear choice between private consumption and public services financed by taxation. As the opinion polls following the budget show, responses to such choices depend on the way in which they are framed, as well as the way in which they are reported
Newspoll found that 15 per cent of voters thought the budget would make them better off 38 per cent thought it would make no difference, and 32 per cent though it would make them worse off. This mildly negative result (fairly typical of responses over the 15 years Newspoll has asked this question) was spun by The Australian into a ringing endorsement ’53 per cent of voters thought the Budget would make them better off or no worse off (emphasis added)’.

The AC Nielsen Poll asked a clearer question and got a clearer answer. Asked whether they would prefer the tax cuts announced in the budget or improvements in health and education, 20 per cent opted for the tax cuts and 77 per cent for improvements in services.

Welcome !

John Quiggin1 Comment

My old mate Chris Sheil has joined the blogging team at Troppo Armadillo. His first post is a contribution to the debate on economic rationalism.

Someone else I’ve been meaning to mention for a while is Paul Watson, whose blog is devoted to “Comedy, media commentary and general bitterness”. Paul’s general bitterness is particularly savage when it comes to reform (scare quotes intentionally omitted) of the higher education sector. Despite having managed to secure my own escape from the general shipwreck (thanks Brendan!), I share Paul’s bitterness on this topic, and his posts are well worth reading.

Real jobs in remote Aboriginal communities (repost)

John Quiggin1 Comment

Ken Parish has an excellent post responding to the recent speech by Pat Dodson on the violence endemic in Aboriginal communities, and linking to a piece by Rob Corr. Although he raises a number of points, Ken’s focus (correctly I think) is on the corrosive consequences of the absence of productive work. I don’t have any new thoughts on this, but I thought it might be worth reposting some old ones (first posted 17 Jan 2003).

Following my posts the Windschuttle controversy, I promised to put forward some ideas on the current policy problems facing Aboriginal Australians, and particularly the problem of economic development. It’s always problematic for white ‘experts’ to tell black communities what to do and I want to make it clear that I’m not trying to do this. Although I have given economic advice to Aboriginal organisations on a range of issues, I don’t regard myself as an expert on the problems facing Aboriginal communities. My perspective on the issue comes more from a consideration of the general economic problems of rural Australia and particularly the general decline in population and employment.
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