Yesterday, companies across the employment spectrum announced more than 65,000 job cuts around the country and around the world, another alarming indication that more pink slips, pay freezes and economic hardships are in store for working families. President Obama cited the layoff announcements in remarks yesterday morning as he urged action on an $825 billion economic stimulus package of tax cuts, emergency benefits and public spending projects.
On the commentary section of Guardian.co.uk, Dean Baker discusses why Congress needs to approve a version of President Barack Obama's stimulus package as quickly as possible to further that all important first step toward stopping the downward slide of the economy. "However, the package is only a first step," says Baker.
"The other obvious way to provide a quick boost to the economy is by giving employers tax incentives for shortening their standard workweek or work year. This can take different forms. An employer who currently provides no paid vacation can offer all her workers three weeks a year of paid vacation, approximately a 6% reduction in work time.
"Alternatively, employers may cut the standard workweek, say from 40 hours to 36 hours, a 10% reduction in work hours. Employers could also adopt policies such as offering workers paid sick leave. If this averaged five days a year, this would come to a reduction in hours of 2%....These policies would bring the US in line with the rest of the world. In other wealthy countries, paid vacation time is standard, with the average being close to five weeks a year."
Baker details a scenario wherein the government could give employers an incentive to provide paid time off now by giving tax breaks to cover all or most of the paid time off, giving the example that if firms gave workers 3 additional weeks of paid vacation a year, the government could offer to provide a tax break for two years that would cover this cost up to $2,500 per worker for the two years covered by the stimulus package.
Baker's workweek concept "less is more" would, more than likely, be met with significant push back from corporate opponents of the shorter work week, despite the fact that the U.S. still remains "the only wealthy country that does not require employers to give workers paid time off for parenting or to provide paid sick days." Baker backs up his proposal by saying that if employers of 50 million workers took up this deal that a six percent [reduction in work time] would translate into 3 million jobs...and "this would be a very good start for getting the economy back towards full employment," he concludes.
Do you agree with the reduced work week as a possible solution to help bring about economic recovery? Please leave a comment and share your thoughts [link to sign-in and comment below]
