Михаил Попов - Working Day Reduction as the Ground of Modern Economic Development

Realization of the forecast depended on realization of another basic prerequisite – about as maximum as possible broadening of the range of people participating in production (participation of all able-bodied people is the limit of such broadening). As it was fixed in our research, at realization of this prerequisite shifts lasting less than 3 hours would be introduced at least 40 years before 2030 – by the beginning of 1990s. That frontier, which has seemed to be an unrealizable forecast for most researchers, can be objectively achieved.

Meanwhile, the tendency to broadening of participation in production was paralyzed because of relative and absolute reduction of the number of employees in this sphere. At best, for employees remaining in it, tempos of this reduction are behind tempos of decreasing in the general working time fund what gives employees some growth of nonworking time. Continuing this practice, 3-hour shifts, as a typical form of organization of production labour, will not be introduced by 2030 but even by 2130.

To begin overcoming the gap between existing excessive shift duration and objectively possible shift duration it is necessary, first of all, to neutralize the tendency to decreasing in the number of industrial employees. Its action is conditioned on entrepreneurs’ aspiration for decreasing in constant labour costs what is dictated by the motive to get the required volume of labour from as less as possible number of employees at the same value of the wage fund. That is why at labour saving caused by increasing in its productivity not employees’ working time but their number is reduced. The motive is universal, i.e., it is peculiar to all entrepreneurs.

With that said, neutralization of the tendency to reducing the number of employees in production must be universal too. It means utilization of the state power credentials of which cover everyone.

We are not saying that the state prohibits termination of employment contracts by employers – this prohibition would disorganize the present economy. Measures stimulating all entrepreneurs to keep and increase employment are needed. That is why legislative reduction of normal working day duration without decreasing in wages is actual and necessary.

This reduction, first of all, induces entrepreneurs to use labour saving caused by increasing in its productivity for compensation of decreasing in employees’ working time fund and not for decreasing in employment. The situation preventing from turning a part of employees into redundant employees at conservation of workload at employees remaining at enterprises is formed.

In these conditions the problem of conformity of labour saving to the value of decreasing in the general working time fund in production, owing to legislative reduction of normal working day duration, arises. The data at table 51 show the scale of this problem.

Table 51

The Potential Value of Decreasing in the General Working Time Fund in Production at Reduction of a Shift until 6 hours (as of 2007)

It is obvious that within one year introduction of everyday 6-hour shifts could not be ensured only by increasing in labour productivity in no one of the examined countries. The value of decreasing in the general working time fund would many times surpass the volume of annual labour saving, and that was why full annual compensation of this saving would be unattainable.

These are consequences of keeping old division of labour: during the second half of the 20 thcentury in most of the developed countries pushing employees out of the production sphere prevailed over reduction of their working time, so that in present conditions any appreciable progress in the state of industrial employees making a slight minority among employees is hard to be realized. And it goes against the achieved potential of economic development allowing reducing shifts by 3-4 times without decreasing in wages.

This fact does not mean that it is not possible to reduce shifts. It is about modification of scales of their utilization. For example, it would take more than a century to make daily 6-hour shifts a norm at those tempos of labour saving and the number of people occupied in production of Italy. At the same time, by 2008 it was possible to use 6-hour shifts for 2 days, annually increasing the number of such days. Since 2008 in the FRG 6-hour shifts could make a quarter of the annual working time fund of industrial employees, and their everyday usage would take place during 4 years.

Transition to a 6-hour working day by means of combining shifts of different duration within a working year is a specific form of introduction of increasingly spreading flexible work hours. This specificity is in decreasing in the average annual number of working hours per one industrial employee at keeping the same level of wages.

It was supposed before that legislative reduction of a working day influences only the way of realization of obtained labour saving (stimulating decreasing in duration of employees’ shifts and preventing from pushing employees out of production). However, it should be taken into account that the examined measure induces entrepreneurs to further increasing in labour productivity.

Actually, without this increase reduction of the general working time fund at an enterprise will increase total labour costs what will negatively affect the volume and rate of return. Even progress of labour productivity, going at the same tempo, does not guarantee keeping the previous level of returns because stable employment prevents from making profits at the expense of decreasing in constant labour costs by means of reduction of the number of employees. Consequently, to keep profitability at the same level tempos of increasing in labour productivity have to be raised. Then growing of profits presupposes additional growing of productivity.

Reduction of shift duration is not just an incentive but a necessary prerequisite of increasing in labour productivity. Introduction of new technologies and equipment always includes a stage of their uptake by workers. This uptake made, as a rule, within formally working time means, by the essence, a stop of production work for development of required competences at employees. Actual working time reduction can be in a form of full-time advance training or professional retraining of workers, but this form is a sort of combination of work and professional development along with their daily combination.

In the modern economy connection of legislative working time reduction to progress of advance training and professional retraining of employees is valid. Specific means of this connection can be determined by collective agreements providing corresponding mutual obligations of employers and employees.

That is why one must not be restricted by extrapolation of average annual volumes of labour saving until introduction, at one scale or another, of less endurable shifts for the period after their introduction. It is necessary to have in view the factors assisting in increasing in tempos of this saving. Accordingly, transition to 6-hour shifts would go faster than it follows from the above calculations, even if it would be made only by means of utilization of labour saving owing to increasing in its productivity.

Stabilization of the number of employees in production by means of working day reduction is quite compatible with existing of old division of labour because industrial employees would still be the minority among economically active population. Prospects of economic development are in overcoming this state. Consequences of reduction of normal duration of a working day in production are outside the scope of conservation of the previous number of industrial employees.