We need to work less, like those feckless Germans

Germany never really struck me as a haven for the bone-idle, but if this opinion piece in today’s Grauniad is to be believed, the old Protestant work-ethic seems to burn low over there. At least compared to the poor old Americans, who may live in the richest country on Earth but seem to have ended up working the longest hours in the developed world. And ended up with sod all annual holiday (vacation) allowance to boot.

Looks like the lazy Germans work only four fifths of the amount of time the Americans put in. Nevertheless, Dean’s comment here made me take a double-take

The most important point to realize is that the problem facing wealthy countries at the moment is not that we are poor, as the stern proponents of austerity insist. The problem is that we are wealthy. We have tens of millions of people unemployed precisely because we can meet current demand without needing their labour.

I spent about five minutes going WTF, this guy is totally full of crap, before coming to the conclusion that he is probably absolutely right. Now of course there was the same old same old in the comments, indeed the first one I saw was Chris

If I do less work I get paid less money.

You’d be solving unemployment at the cost of making those who have jobs much poorer.

No thanks.

Chris’s problem is that he feels that he can’t maintain his current lifestyle on less than what he currently earns. The solution, Chris, is to live below your means. Buy less shit, do more with less Stuff, and y’know, maybe see more of your family? It’s amazing how much really interesting stuff is nearly free – as Mr Money Mustache summarised with panache in Get Rich With – Nature

And yet I have a curious fellow feeling with those Germans. I’ve chosen to take their solution in a different way. Give or take a few months, I have retired 8 years short of the normal retirement age for The Firm, and had I run to term I would have had 37 years of working under my belt (from coming of age at 18 and after knocking out three years as an’ undergraduate and one postgrad year). That’s pretty close to a German-style 20% fewer hours, it’s just that I’ve packed them all in at the end. There was, in 2008, the option of going part time which was offered by The Firm in a German-style response to the recession, but I was already in the final sprint and lowering my income would have delayed my exit date. So for different reasons to Chris, I responded in a similar manner that I couldn’t afford it.

Where I differ from Chris is that I didn’t need the money to maintain my living standard. Indeed, what this story shows is one of the tragedies of our time. I saw a BBC programme a while ago called the Century of the Self with Adam Curtis, who showed some archive footage from the dawn of the 20th century. There was a real fear that the nascent industrial mass-production would be in serious trouble once people had got all the stuff that they needed.

Yeah, I know, stupid buggers, eh, how on earth could they ever have thought something so daft? But apparently it took some effort to find the path that took us to the place we are today, and the talents of a chap called Edward Bernays, who according to Curtis (quote is about 1 minute in from the start)

was the first person to take [Sigmund] Freud’s ideas about human beings and use them to manipulate the masses.

He showed American corporations for the first time how they could make people want things they didn’t need, by linking mass-produced goods to their unconscious desires

Now Adam Curtis gilds the lily somewhat, but he does have a point. Bernays was the nephew of Sigmund Freud, and I’d say that Westfield Shopping centre is the logical fruition of Bernays’ ideas – a place where it is virtually impossible to buy anything useful, a shrine to the supremacy of Wants over Needs. Is there really a need for Peppa Pig

Meet Peppa Pig, exclusive wristband only in advance extra

or pretty much any of the rest of the stuff on offer in the Westfield shopping centre? Breitling watches? McDonald’s? Massage Angels? Previous generations of Londoners managed with keeping their ostentation down to luxury departments like Harrods, we now need two Westfield shopping centres and Harrods to service London’s wants 😉

The problem may well be that we are wealthy – and we have ended up engineering society to that people like Chris feel they need to earn as much as he feels he requiress, so that he can spend that money to be able to service his job-house-home-car wants to the level that he is told he needs.

Now I’m not sure that this is really what the Guardian’s Dean Baker meant. The possibility that he doesn’t acknowledge is that perhaps German productivity is higher. However, his point is valid in isolation; you can adapt to varying load by varying hours as well as varying the number of people employed. From a human point of view it is a lot easier to cope with an expectation of up to a 20% variation in income compared to an expectation of full income with unexpected and uncontrollable outages of uncertain duration, otherwise known as periods of unemployment. You can adapt to a fall in income by cutting back on elective expenses like going on holiday. You can’t adapt to a loss of income without having savings or a passive income – I should know, after all I have electively prepared for a loss of income for up to eight years, and cutting back is not the route to success there, you have to forestall it or go under 😉

However, something that Dean Baker also doesn’t acknowledge is that there is a threshold effect. Any task needs so many man hours, but hiring 30 workers for one hour a week is nto the same as hiring one worker for thirty yours a week. The government needs to tax employment, via national insurance to provide unemployment benefits among other this. That is a hit on employment, making an incentive for employers to employ fewer people but increase the hours they work, and there are other disincentives to employing more people such as the cost of checking work permits and other social costs which are, unfairly in my view, loaded onto employers. It should be the Government that checks eligibility to work from the NI number an employer submits, not for the employer to do the grunt work ahead of time.

So I’m all for working less, like Germans. But if we are going to do that, we need to teach people not to rabidly live all the way up to their instantaneous income. Even at work, far too many people took their bonuses and because it was a unusual spike that month spent it on wants and toys.

A bonus is part of their pay, indeed shifting the balance from basic pay to bonuses is a way for the Firm to pay less (it wasn’t pensionable) and keep open an option of paying less in future (it wasn’t consolidated). I observed The Firm slowly increase the portion of pay that went to bonuses from a couple of percent in the 1990s to about 10% this year. People didn’t arbitrarily save up 10% of their income and blow it regularly on toys in the 1990s, so why they treated their later pay in such a cavalier fashion at the end beats me. But they did, and this tendency to live up to the peak of one’s instantaneous means is a large part of why unemployment is such a cause of great pain in recessions – there is no buffer to keep the wolf from the door.

In the German model the company takes over some of the responsibility of smoothing the peaks and troughs, and in general as we have seen with pensions in the UK, companies show a far greater capability to do strategic long-term planning than most individuals do. However, in the Anglo-Saxon world at least, companies are running as hard as they can away from taking any responsibility for their employees’ financial well-being, other than to provide them with a pay packet.

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