Timesizing® Associates - HOMEPAGE
©1998-2014 Phil Hyde, The Timesizing Wire, Box 117, Harvard Sq PO, Cambridge MA 02238 USA (617) 623-8080
- 1933: The Depths of the Depression:
When We Missed the Easy & Effective Fork in the Road: Cutting Hours
For 1938-1940 & War, see bolded section below. Click here for the 1920s and prior history.
In 1933 official unemployment reached 24.9%. One quarter of the nation was unemployed and either hungry or starving. President Franklin Delano Roosevelt (FDR) had just been elected - he immediately had the chance to solve the Depression quickly, intelligently and market-orientedly by picking the easy fork in the road = straight ahead in line with the repeated private-sector cuts in the workweek that had taken place over all the previous history of the nation, especially since 1840. But FDR swung from Hoover's rightwing fork of too little action to socialism's leftwing fork of too much of the wrong kind of action - inefficient, patronage-vulnerable, eventually tax-intensive, government job creation instead of efficient, market-directed, private-sector work sharing and more of that most fundamental freedom, financially secure free time. FDR rejected the shorter workweek (30 hours!) passed by the U.S. Senate on April 6 by a vote of 53 to 30, and went instead for a minimum wage and maximum makework - and anything else he could throw together to placate the shorter-hours forces without giving them (and American labor in general) the one thing they needed to survive = control over the supply of...themselves...which they could have by controlling worktime per person.
Once Hoover's "No Controls" path was rightly rejected, the Great Fork in the Road faced us with two choices, One Control or Many Controls. Unfortunately FDR careened the country from one extreme to the other, from No Controls to Many Controls, and missed the One Control option in the middle. So FDR -
It was now back to the balking zigzag between stifling micromanagement and stifling megaconcentration of spending power that had been going on ever since the start of the Industrial Revolution, and back to that cursèd Chesterton pan-utopian flaw, the assumption that no one will want more than his share (or even know what it is) -
- rightly rejected the path on the right (No Controls is a mirage, because the most aggressive players rush into the vacuum & bend the "free" market their way),
- wrongly recoiled from the path in the middle (Art Dahlberg's one planned adjustment to make capitalism hum, the 30-hour workweek bill that Sen. Hugo Black pushed through the US Senate on April 6th) mistaking it for socialism, and
- tragically lurched down the only path left (left-leaning Rex Tugwell's burgeoning bureaucratic micromanagement, as good an imitation of socialism as you can get),
- only to start regretting it two years later (Ben Hunnicutt: "voiced regret that he had not got behind the 30 hour bill and pushed it through Congress"),
- and never solved even half the Depression before the War. The Depression's unemployment rates (& sequel) were 1929:3.2%, 1930:8.7, 1931:15.9, 1932:23.6, 1933: 24.9% (=Depression high), 1934:21.7, 1935:20.1, 1936:16.9, 1937:14.3,
1938: 19.0% (2 hrs/wk/yr cuts start), 1939: 17.2%, 1940: 14.6% (U.S. still at peace, cutting hours, not lives),
1941: 9.9% (workweek frozen, U.S. into Lend Lease & war), 1942: 4.7%, 1943: 1.9% (data thus far from Ross Robertson's History of American Economy, 3rd Ed., p.682) & 1944: 1.2% (=best of "wartime prosperity"), 1945: 1.9%,
1946: 3.9 (war ended, workweek still frozen), 47:3.9, 48:3.8, 49:5.9, 1950:5.3, 51:3.3, 52:3.0, 53:2.9 (from Historical Statistics of the US, Table D85-86). So, with a one-year lag, the New Deal started in 1933 and got unemployment down to 14.3% by 1937, not even half the 1933 rate. Worse, it slipped back up to 19% the next year. However...
in 1938-1940, weak timesizing (too high, too late) was finally enacted, yet it still worked to cut 2% unemployment for each 2-hour/year cut from the workweek, or 1% per 1-hour cut, similar to the more recent 4-hour-cut results in France between 1997 (12.6%) and spring 2001 (8.6%) before the US-led recession hit. In the U.S., a nationwide 44-hr/wk cap was instituted on Oct. 24, 1938. The 1938-39-40-41 figures in the U.S. are: undefined hrs 19.0%, 44 hrs 17.2%, 42 hrs 14.6%, 40 hrs 9.9%. So workweek definition in late 1938 yielded a nearly 2% drop in 1939 to 17.2%. The 42-hr/wk cap on Oct.24,1939 yielded more than another 2% drop the next year to 14.6% (the extra possibly already reflecting Britain's declaration of war on Sept.3/39 and subsequent mobilization and demand for US exports). The 40-hr/wk cap in the U.S. took hold on Oct. 24, 1940, and yielded much more than another 2% drop in 1941 to 9.9% (the extra now attributable to the formalization of Lend Lease on March 11 and to Pearl Harbor on December 7). In France between 1997 and early 2001, the workweek was cut from 39 to 35 hours and unemployment went from a high of 12.6% when workweek reduction was voted in in '97, to a low of 8.6% in the spring and early summer of 2001 before the US-led recession hit France and dragged its unemployment rate back up.
In the United States, World War II got "better" results than timesizing by drafting millions of surplus labor hours out of the job market - for war service - and thus gave the coup de grace to the Great Depression - which timesizing had already solved - by reducing unemployment to less than 2% by 1943 (1942: 4.7%, 1943: 1.9%).
So the over-credited, "feel good" New Deal of FDR did not solve the Great Depression. Timesizing did. But then its role was obscured as the War finished the job in the worst possible way - by killing and maiming large portions of the workforce. The US labor surplus was not restored until 1965-75 when the postwar babyboomers entered the job market. The labor surplus's wage-flattening, consumption-damping, recession-inducing effects were augmented by the by-now rebuilt factories of Europe and Japan and the consequent reduction of US exports.
The lesson - you get roughly a one-percent drop in the unemployment rate for every one-hour cut in the workweek - was overlooked, forgotten and by the 1980s, completely denied and even ridiculed as the "Lump of Labor Fallacy." Why? One reason - if we can automatically guarantee full employment by automatically adjusting the workweek so that unemployment maintains a predetermined target level, automatically reducing as long as unemployment is too high, etc.), then we don't need economic micromanagement and so many economists....
After 1933, the open moment ended and creative discussion ceased, as FDR desperately threw together the hodgepodge of the New Deal and revved up a propaganda campaign against the shorter-hours forces ("Defeatism!", "Spreading unemployment!", "Go get him, Rex!" - Rexford Tugwell penned the rebuttal to Dahlberg's shorter-hours solution to "involved governmental interference and industrial control": Tugwell called it "The Industrial Discipline and the Governmental Arts" in a dramatic early example of spindoctoring). Thus FDR was committed to trying to satisfy labor without giving them the one thing they wanted and needed; namely, the best of the options of the time - the Black-Perkins private-sector work-sharing bill, based on Kellogg's 30-hour week and Dahlberg's 20-hour recommendation - overly rigid and arbitrary perhaps, but at least we could have been "tinkering in the right garage" for the last 67 years instead of completely wasting our time
straining for government job creation,
bandaiding the economic life-support system of Keynesian borrow & spend, and,
once the war "solution" wore off and babyboomers grew up and began entering the job market and replacing the labor surplus of the Depression, downsizing our way from recession to deeper recession.
- Hoover wanted to stay with only a political definition of "share," the one-person one-vote principle that hadn't prevented the Depression. This was the last time we could equalize on a point (one:one).
- FDR wound up trying to get an economic definition of "share" by defining everything but an upper limit, hence his Many Controls. Hey, at least he got the focus moved over from the political to the economic sphere. He also got clear on the concept that we could equalize on a range (with two required definitions: an upper and a lower limit), not just a point (with only one required definition). Definitions of lower limits popped up like mushrooms: Minimum wage, minimum income (federal poverty line), under-time (for state unemployment insurance benefits), disability (for workmen's comp), under-age (for child labor prohibition).... One peripheral upper limit even popped up: Over-age (for purposes of Social Security retirement benefits). And at last, too little too late, a central upper limit appeared: Over-time was defined as hours over 44/wk in 1938, 42 in '39, and 40 in '40 with 40¢/hr minimum wage - the famous 40-40-40 Plan, whose overtime provisions motivated overtime as much as they discouraged it, and whose enforcement quickly lapsed as World War II geared up.
- Art Dahlberg and the AFL and Hugo Black got an economic definition of "share" by defining nothing but an upper limit, hence their One Control. Kellogg's, Sears Roebuck, GM/Tarrytown, Standard Oil/NJ, Hudson Motors, several cotton mfrs and uncounted small firms were doing it successfully in practice at the 30-hour level to avoid layoffs (Hunnicutt, 148). And it's been independently reinvented by countless small firms in every recession since then, in the form of "cutting hours, not jobs", i.e., timesizing, not downsizing.
Nixon of all people advocated a 32-hour workweek in 1956 on the stump in Pueblo, Colorado, until Ike gagged him. Walter Reuther pushed for "fluctuating adjustment of the workweek against unemployment" at the UAW Convention in Atlantic City in 1964. But then Reagan squelched the air-traffic controllers in 1981 who were demanding not only $10,000-a-year pay increases but also "shorter hours to relieve the strain of their high-tension jobs." Quote from David S. Broder in ed/op article "Obama's welcome display of backbone" in 4/01/2009 Seattle Times via seattletimes.nwsource.com.
So Timesizing.com is trying again. It's the one place where we detest DOWNSIZING - of our companies, our company loyalty, our domestic markets and our whole future - of our jobs, our job security, our morale, and our ability to support ourselves, and if we're still working, of our free time.
For more details, our 1998 campaign piece, Timesizing, Not Downsizing, is available on the third floor at the Harvard Coop in Harvard Square, Cambridge, Mass. or from *Amazon.com online.
Questions, comments, feedback? Phone 617-623-8080 (Boston area) or email us.
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