Only So Much To Go ‘Round
The Sandwichman commented the other day on The Economist article, “Britain’s Green Party proposes a three-day weekend.” Regrettably, though, I didn’t pay much attention to their “rebuttal” to the alleged assumption of a fixed amount of work:
In fact, if people worked fewer hours, demand would drop, and so fewer working hours would be on offer.
I have seen stupid explanations before of why there is not a fixed amount of work. Layard, Nickell and Jackman argued that if work time reduction and redistribution succeeded in reducing unemployment, it would be inflationary and that would probably cause the central bank to intervene to re-establish the “non-accelerating inflation rate of unemployment.” That’s pretty stupid but not nearly as stupid as what The Economist article claimed as “fact.” Pardon me for repeating the whole dreadful argument:
The Greens’ proposals encounter two problems. First, the theory. They argue that the reduced hours worked by some could be redistributed to others in order to lower underemployment. They thus fall prey to the “lump of labour fallacy”, the notion that there is a fixed amount of work to be done which can be shared out in different ways to create fewer or more jobs. In fact, if people worked fewer hours, demand would drop, and so fewer working hours would be on offer.
According to the above, the Greens “argue that the reduced hours worked by some could be redistributed to others in order to lower unemployment.” So the idea is that a given number of hours of work could create more jobs if each person worked fewer hours.
For example, if there are 100,000 people employed 40 hours a week and 25,000 unemployed, you could, ceteris paribus, employ all 125,000 people for 32 hours a week. That is admittedly a very big ceteris paribus, but the argument is clear for illustrative purposes. In spite of using the number in the example, there is no assumption –implied or otherwise — that there actually are “4,000,000 hours” of work to be done. Likewise there is no assumption that the actual number of hours of work to be done, whatever they may be, is unchanging.
But in addition to reprising the straw man attribution of a “notion that there is a fixed amount of work to be done,” the Economist article introduces an innovation in stupidity: using the same example as above, the hours of the 100,000 employed people cannot be redistributed because… they vanish! If the hours of 100,000 employees are reduced from 40 to 32, then aggregate hours of work are reduced accordingly from 4,000,000 to 3,200,000. The 100,000 employees have less money to spend and demand falls correspondingly.
But, using a similar logic, presumably those 100,000 employees commute to work. At some point in their trip, they are half-way between home and work. Later, they are half-way between work and the half-way point from home to work. And so on. They will never get there!