November 1998  

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Shorter working hours – solution for the future?

by Suvi Arapkirli

Two worlds: one formed by motley groups of part-time workers who are driven to worthless jobs by a semi-collapsed social benefit system, and the other formed by highly qualified people who earn high salaries but have to work incredibly long hours. Surely this kind of reality is not the only alternative for the future of work.

A seminar at the Finnish Institute looked for ways to reform the tax and social welfare system in order to increase employment and stop the deepening of social inequalities.

Dr. Pekka Peltola, Project Manager from the Finnish Ministry of Labour, told the participants about an experiment of shortening working hours in twelve Finnish enterprises. The experiment was called 6+6. Instead of one worker’s eight-hour shift, two workers do a six-hour shift each. In spite of this common starting point, practical solutions can vary a lot.

Peltola mentioned several results from the experiment: "The use of machines becomes more efficient, work is being organised better, flexibility increases, individual worker’s productivity improves, overtime work disappears almost completely, absenteeism falls and technological development becomes faster."

Peltola emphasised that the most crucial result of the re-organisation of work has been the growth in productivity. This happened in all the companies taking part in the experiment. The record growth was experienced in Imatra Steel where the productivity per working hour increased by 25 per cent.

According to Peltola, international research has shown that the work efficiency of all workers falls dramatically between the sixth and eighth working hours. This also underlines the usefulness of the 6+6 hour model.

Employers defiant?

Pekka Peltola told the Demari newspaper that private employers in Finland oppose vehemently any shortening of working time.

"When the employers’ representative hears that an experiment of 6+6 model is being planned in the company, he immediately phones the Managing Director and demands a stop to the project – after all it means shortening the working hours!

"If the Managing Director does not seem sufficiently alarmed, the employers’ representative contacts the leading share holders demanding: ‘This is not allowed, make sure that your Managing Director falls back in line.’"

The Managing Directors and Human Resources Managers willing to participate in the experiment have described these intimidation attempts which aim to stop any experiments in shortening the working hours.

Peltola believes that Finnish employers want to follow the British example.

"They want a highly skilled workforce to put in long days and leave the rest of the work to part-time workers who come and go. This is a question of power inside the work places but I don’t think that the British model can be implemented in Finland."

A 30 hour working week

Barry Camfield, Regional Secretary of the Transport and General Workers Union, told the Demari newspaper that in his view the only way to oppose the loss of jobs accelerated by automation is to radically reduce working hours.

"To be able to implement a 30 hour working week, with five six-hour days, is a real challenge."

Camfield blamed companies for endangering their own future by using mass redundancies as the only method to increase their profits.

"The people thus sacked not only have less money to buy products manufactured by the company. They also cannot put down money into the pension funds which are an increasingly common source of loans for the company’s investments."

From taxing work to taxing production?

Kati Peltola, Director of Social Services in Central Region, Helsinki City Social Department, has consistently demanded a drastic reform of the social welfare system. The basis of the reformed system would be the collection of state revenue by taxing production, not work.

"The money for social benefits in Finland would come from taxing the manufacturing process.

"Under the present system the employer pays about 30 per cent of every employee’s wages as national insurance and the employee him/herself pays another 30-40 per cent income tax for those wages."

According to Kati Peltola, this a tax which punishes the use of work in production. No other factor of production is punished in this way. According to Peltola, all employers’ national insurance payments should be eliminated and replaced by the taxation of the whole production process, possibly using three different tax rates. In this model, the unemployment benefit would be collectible for only four months, after which period the unemployed person would be required to participate in part-time citizen’s work in local communities.

This is a translation of an article which was first published in the Demari newspaper in Finland. Suvi Arapkirli is the paper’s correspondent in London.

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