Fluctuations in Weekly Hours and Total Hours Worked Over the Past 90 Years and the Importance of Changes in Federal Policy Toward Job Sharing

Abstract

During the Great Depression of 1930s, changes in the workweek drove a larger portion of changes in total labor input than in other decades. Work-sharing policies appear to be responsible. Hoover created various work-sharing committees lead by key industrialists, which pushed for shorter workweeks and Roosevelt's President's Reemployment Agreement called for sharp cuts in weekly hours. The hope was to spread available work amongst more people. While between 50 and 90 percent of declines in labor input were accommodated by falling hours during these periods, in recent decades employers have primarily relied on layoffs to achieve the same end. During the Great Depression of 1930s, changes in the workweek drove a larger portion of changes in total labor input than in other decades. Work-sharing policies appear to be responsible. Hoover created various work-sharing committees lead by key industrialists, which pushed for shorter workweeks and Roosevelt's President's Reemployment Agreement called for sharp cuts in weekly hours. The hope was to spread available work amongst more people. While between 50 and 90 percent of declines in labor input were accommodated by falling hours during these periods, in recent decades employers have primarily relied on layoffs to achieve the same end.

Failing the Test? The Flexible U.S. Job Market in the Great Recession

“…The reason for the low employment-output relation was that firms undertook massive work-sharing to limit the spread of joblessness. According to Neumann, Taylor, and Fishback (2013), “between 50 and 90 percent of declines in labor input were accommodated by falling hours” in the depression, in part because the federal government encouraged firms to reduce hours instead of jobs. 12 By contrast, between 2007 and 2009, output declined by 4.7 percent (six quarters into the recession) while employment fell by 6.3 percent (nine quarters into the recession) for an employment to output elasticity of 1.34—over twice the employment-output elasticity in the Great Depression.…”

“… 12. Neumann, Taylor, and Fishback (2013). President Hoover created work-sharing committees of industrialists to encourage substitution of cuts in hours for cuts in jobs.…”

Failing the Test? The Flexible U.S. Job Market in the Great Recession

“…The reason for the low employment-output relation was that firms undertook massive work-sharing to limit the spread of joblessness. According to Neumann, Taylor, and Fishback (2013), "between 50 and 90 percent of 9…”

“…Taylor, and Fishback (2013). President Hoover created work-sharing committees of industrialists to encourage substitution of cuts in hours for cuts in jobs.…”