"There needs to be higher rewards for working"

October 6, 2017 - 06:20

Society should be doing more to motivate young people to work. The future economy of Norway depends on this. Mandatory activities for persons on welfare could be instrumental, thinks a University of Oslo professor.

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Sonja Ranta and Louice Fogel from Sweden found jobs at a bakery in Oslo. A University of Oslo professor thinks more Norwegian young people should be urged to work. (Photo: Berit Roald / NTB Scanpix)

Should we all be working more today to counteract future fiscal deficits? If so, how does that concur with calls for a six-hour work day? Can the Norwegian Green Party’s slogan about working less and living more be anything more than wishful thinking?

These were some of the themes in a recent debate at Kulturhuset in Oslo, organised by the University of Oslo’s Department of Economics.

Steinar Holden had few doubts about the answer. He is a professor of economics and leader of the department.

Pension costs will soar

Retirement pensions and costs of care for the elderly will be increasing steeply in the next few years as the large baby boomer generation born after WWII leaves the work force, receiving social security and starts entering assisted living facilities and nursing homes. This means that a greater share of those who can work will need to be in jobs, creating value and paying taxes. An inevitable alternative is that everyone who is currently employed in Norway should be paying even higher taxes than they already do.

Could cheap imports of food and commodities coupled with robots taking over work functions create the productivity need to power the wheels of the economy?

“Maybe we can work less if we combine it with consuming less?” queried the discussion moderator Halvor Mehlum of the University of Oslo’s (UiO’s) Department of Economics.

Illusional 6-hour day

But Professor Holden was sceptical.

Norway has had a 37.5 hour work week for decades and everyone has the right to five paid weeks of vacation. They also get 100 percent sick-pay from the first day of absence. Norwegians can certainly work less if they consume less. But the average number of working hours in Norway is already lower than in most other countries, mainly because of all who work part-time. 

Holden thinks the six-hour day will lead to a considerable reduction in our consumption and probably in levels of public welfare too.

“I don’t think the majority want that reduction, especially cuts in public welfare benefits. In many jobs it will also be hard to reduce the work day to six hours because the work assignments cannot be reduced correspondingly. The result could be less pay for greater contributions and efforts,” said Holden.

Holden thinks many who have reduced their work to an 80 percent position can testify to this. Generally that would be as a four-day work week. Many squeeze five days of work into four days. This is particularly the case for professions where the individual employee has his or her specific work tasks, where nobody else is taking on a person’s work load to compensate for their day off.

Building a career

People struggle and compete in many professions to cultivate their careers. This sort of rat-race is hard to combine with reduced working hours.

The professor also pointed out that many employees work long hours because demonstrating a willingness to go the extra nine yards can put them on the path to permanent positions.

“If the six-hour work day is implemented, in such jobs this will lead to reduced pay and heavier workloads,” he asserted.

The above seems to apply to much of Norway’s university and college sector, where academic tenure is hard to achieve.

“Many researchers will continue to conduct just as much research even though the general workday is reduced to six hours. The six-hour day could lead to fewer hours of lecturing per employee but for many that would probably just lead to more hours spent on research,” claims Holden.

Similar arguments can be made for people working as consultants or lawyers, where it would be very hard to complete all that is expected in the course of six hours.

Increase the advantage of working

Holden pointed out that the wave of ageing baby-boomers is pulling society in the opposite direction – towards more total work performance.

“It’s important that as many as possible are working and paying taxes because they need to pay for mounting numbers of pensioners,” he explained. 

Importing immigrant labour helps some but it is far from the only solution because immigrants also age and will be requiring social security.

So how to raise employment levels?

“An important measure is to widen the difference between welfare income and work income, so that young people with poor job prospects become more motivated to work,” he said.

As things are now in Norway, in some cases there is little remunerative motivation to start in a low-paying, low-skilled job. After taxes, take-home pay might be just a little more in a job than what a person can earn on welfare.

Holden thinks many young people make that comparison and think short-term, not realising that as years pass they will lose lots of potential income by being jobless. 

Lower taxes for the lowest incomes

Holden suggests that the difference between job pay and welfare pay could be raised to create more motivation to work, especially in the low-paying jobs.

He thinks this can be done by lowering the taxes for the lowest incomes.

“Most young people are motivated to find work. But some need to be pushed a little harder to go out and get a paying job. This is for their benefit. It is much preferable to being pacified by unemployment benefits,” he says.

The professor thinks an obligation to engage in activities when receiving welfare benefits can be a suitable tool.

Another issue is to get employers to hire persons whose functionality and productivity might be below the norm. This can be done by providing government subsidies to cover some of the payroll outlays.

Some work too much

Holden understands that on the other hand some people also work too much. Workload variations are excessive. Some could work more and others could work less.

“Invigorating work assignments, competition among colleagues and pressure from the boss can cause many to work far too much.”

This can have health impacts.

“Many might work too hard, too long, before they comprehend that it is detrimental to their health. They risk burnout, which can also have large costs for society,” says Holden.

Fathers work less

Another issue is that parents with young children are among those who work the most, even though this is when domestic and family needs are greatest.

“Fortunately, however, the fathers of young children are spending more time at home that they used to,” says Holden.

Growth in productivity could indeed be compensated for with more time off from work. The challenge is how to spread this out collectively.

Most of Norway’s labour practices and benefits are a result of political struggles and negotiations between unions and employer’s associations, with the government pitching in at some point with legislation.

“Our 37.5-hour work week has not just dropped out of the sky. It was negotiated,” argued Maria Berg Reinertsen, an economist and journalist in the newspaper “Morgenbladet”.

Employee self-determination

Professor Steinar Knardahl, a researcher at the National Institute of Occupational Health, STAMI, confirms that employees in Norway can be shouldered with stronger demands than their counterparts in other countries.

“The reason that we tackle this pretty well is that we also have a high degree of control over our work situations,” he says.

He reminded the audience that detrimental stress at the work place is unhealthy and can lead to heart attacks, diabetes and strokes.

A low degree of control over one’s workday leads to poor health. This is why it is so important for us to retain the high degree of control we have in our jobs, he asserts. His definition of control in this context entails letting employees largely decide when and how to perform their job tasks.

“The worst possible work situation is when a consultant has an enormous workload and simultaneously an employer who steers him or her in detail,” he says.

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Read the Norwegian version of this article at forskning.no

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Translated by
Glenn Ostling

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