Goal 8:Lower the work week to prevent both overwork and under employment.ObstaclesThe implicit goal of changing the work week is to promote full employment. Objections can be expected from the corporate sector which prefers a labor excess to keep wage pressures down, and a longer work week to lower per employee overhead. Overwork is a driving force for those who fear for their economic well being if they work less. Many are prompted to overwork by excessive pursuit of materialism. Corporate motives can be changed by altering the tax laws so that there is no per capita government overhead, but rather, costs are related to the amount of labor purchased. Worker's need to work longer has been fueled by the decline in the standard of living and the reduction in the stability of the social safety net. If social programs were made more comprehensive extra work motivated by fear or underpayment would subside.ImplementationMuch of the developed world is faced with the paradox of simultaneous over- and under-employment. Those that have jobs are pushed to produce more so that the fixed employee expenses can be amortized over a larger output. At the same time we have unemployment rates of five to fifteen percent in these countries. The work week needs to be restructured so that firms have a negative incentive to overwork their present staff. This will induce them to hire more workers and raise the standard of living for the entire work force. The excess work disincentives can be stronger overtime pay adjustments, limits on the class of "exempt" employees, and changes in the tax costs of each employee.If community costs such as health care and retirement were assessed as a function of overall business activity rather than on a per employee basis, the present economic incentives would change. This can be done, for example, by creating a universal health fund and a universal retirement and disability fund. These funds would be financed by an alternative tax not tied to each individual employee. There are lots of such schemes in developed countries to use as proven models. Common ones are a value added tax (VAT), a universal sales tax, or a gross receipts tax. Coupling the taxes collected to overall business activity in this way reduces the incentive to exploit the workforce and also captures tax revenue that is currently avoided by shifting expenses to low tax regions. Companies don't mind paying their taxes if they feel that it does not put them at a disadvantage to their competitors. It is not just the level of profit that drives companies, but also the relative performance compared to their peers. By universalizing the social costs of employment they are relieved of the pressure of having to deal with local dislocations due to prior employment liabilities or changing business patterns. Companies that "outsource" part of their business would not stand to gain relative to their local competitors since the level of taxation would be based upon the volume of business and not upon explicit employee expenses. If it is felt to be wise public policy then cost savings from use of external labor and supplies can be compensated for with the appropriate adjustments to the tax rates. This does not have to take the form of a tariff, but can be in the form of "social cost avoidance equalization" taxes. |