Genuine Progress Index for Atlantic CanadaIndice de progrès véritable - Atlantique

Working Time and the Future of Work in

Canada

“The number of hours worked is one important indicator of a country’s overall quality of life… While the benefits of hard work are clear, working more is not the same as working better.”

- Juan Somavia, Director-General, International Labour Organization

GDP (the economy) can grow while:• Poverty, insecurity, and inequality

increase

• The gap between rich and poor widens

• The earth’s resources are depleted

• While communities collapse

• Our quality of life worsens

GDP (the economy) can grow while:• The quality of work deteriorates

• We work longer hours for pay

• We have fewer hours of free time

• Work stress and stressed-induced illnesses increase

• Family breakdown and crime, associated with underwork, increase

Key indicators of progress related to work• A decline in unemployment

• A decline in underemployment

• A decline in hours polarization

• An increase in job security

• A decline in overwork, or the proportion of people who work long hours

Key indicators continued...

• An increase in work that is socially or environmentally benign and a decrease in work that is damaging to communities or the environment

• A reduction in work stress and an increase in work that improves work/family balance and contributes to quality of life

There has been a decline in progress among these key indicators over a 25-year period in Canada.

“The paradox of our times is that many Canadians today work long hours while many others have no work at all.”

--Advisory Group on Working Time and the Distribution of Work (1994)

Troubling Trends over 25-year period (1976-01)• Hours Polarization

• In 1976 roughly one-quarter of all Canadians with full-time jobs worked over 41 hours/week. By 2001, the proportion had risen to one-third

• During the same time period, the proportion who worked less than 30 hours/week increased by 30 per cent

Trends continued...

• Rising Insecurity:

• Since 1997 (data first available) the proportion of workers employed in temporary jobs increased by 12 per cent

• Part-time on the rise: In 1953 four per cent of Canadian workers held p/t jobs. By 2001, nearly one-fifth of the workforce was working p/t

• Part-time work not necessarily bad, but...

Trends continued...• Part-time jobs in Canada tend to pay

poorly, carry no benefits, provide limited job security or room for advancement

• Characterized by high turnover

• In Canada in 2001, full-time employees were paid on average 49% more per hour than their part-time counterparts

• Jobs most likely to offer non-wage benefits are high-wage, unionized, full-time and permanent

Trends continued...

• Involuntary Part-time:

• Many who work part-time would rather be working full-time but can’t find f/t work

• Between 1976 and 1995 proportion of involuntary part-time nearly tripled

• In 2001, 26 per cent of part-timer workers in Canada did so involuntarily

• In Nova Scotia, the 2001 rate was 43%

Trends continued...• Overtime:

• The incidence of overtime increased by 11 per cent between 1997 and 2001 alone

• Moonlighting:

• Between 1976 and 2001 the incidence of multiple job holding more than doubled.

• “…more people are arming themselves with several jobs in the event that one disappears.” -- Statistics Canada

Trends continued...• Leisure:

• Between 1991 and 1999 the proportion of Canadian workers regularly working on weekends has jumped from 11 per cent to 18.5 per cent

• Leisure time declines with marriage and raising children

• Between 1992 and 1998 (time-use data) married men and women each clocked an extra two hours per week of paid work

Trends continued...

• Canadians have less free time than most Western Europeans

• Europeans enjoy up to 3 times more vacation time. Canadians would have to work, on average, 15 years before receiving the vacation time mandated by some European countries after just one year of work

Danes Have 11 hours more free time each week than CanadiansSource: Andrew Harvey, “Canadian Time Use in a Cross-National Perspective,” Statistics in

Transition, November, 1995

0

5

10

15

20

25

30

35

40

45

50

Unpaid Work 25.6 24.3 25 24.4 21.9 16.8

Free Time 33 35.4 36.7 40.5 41.1 46

Bulgaria Canada U.S.A. U.K. Finland Denmark

Trends continued...

• Inequality:

• The rich-poor gap widened, partially as a result of hours polarization

• 1990: the richest 20 per cent of Canadians had seven times as much disposable income as the poorest 20 per cent. 2001: they had nearly nine times as much

Trends continued...

• Unemployment:

• Canada’s official unemployment rate is just over 7 per cent. This excludes:

• Growing number of hidden unemployed such as involuntary part-timers and “discouraged” workers -- those who want work but have given up looking for it

Canada’s Unemployment Rate by Decade, 1950s to 1990s

4.25

6.7

9.4 9.8

0

2

4

6

8

10

12

l950-59 l960-69 l970-79 l980-89 l990-98

Rate

(%)

Trends continued...

• In 2001 the official unemployment rate in Canada was 7.2%. Add discouraged workers and underemployed portion of involuntary part-time work, and the number rises to just above 10%

• Official figures also disguise the rise in long-term unemployment. In Canada the proportion of people unemployed for a year or longer has more than doubled over a 25-year period-- from 3.8 per cent in 1976 to 9 per cent in 2001, peaking at 16.3 per cent in 1996

“The emergence of an economy that grows by shedding labour has heightened anxiety about jobs and increased the number of people who find themselves without prospects and without a stake in the current order of society.” -- David Cayley

Total Work Hours• Dual-earner couples with children

working longer total hours today than their counterparts 100 years ago

• Total average work hours per week (paid and unpaid) for couples with children increased from roughly 111 hours in 1900 to 137 hours in 2000

• For full-time employed parents it was even higher in 2000 at 145 hours/week

Total Work Hours, Couple with Children, Canada, 1900 and 2000 (includes both f/t and p/t work)

1900 2000

Male, paid work 58.5 44.8

Female, paid work -- 25.2

Male, unpaid work N.A. 24.5

Female, unpaid work 52 42.7

Total work hours 110.6 137.2

Dual Earner Families as Percent of All Families in Canada

Sources:Statistics Canada, Characteristics of Dual-Earner Families, Charting Canadian Incomes 1951-1981, Women in Canada

0

10

20

30

40

50

60

70

1951 1961 1971 1981 1991 2001

Dual Earner FamiliesSingle Earner FamiliesNo Earner

Dual-earner parents/non-parents, LFS data:• In 2002, dual-earner couples between

25-44 years of age without children worked a combined week of 77.2 hours per week

• Couples in this age group with children worked 75.1 hours per week

• Full-time employed parents in this age group worked a combined week of 81.2 hours per week. Their non-parent counterparts worked 80.7 hours/wk

Time Stress on the Rise• Couples with full-time jobs and

children work 145 hours per week

• Women double labour force participation rate, but still do nearly twice the housework of men

• Single mothers with f/t work most time-stressed group: average 75-hr paid + unpaid work week

Time Stress on the Rise

• In medium and large-sized Canadian firms/organizations, 58 per cent of workers now report work/life conflict and “role overload” -- defined as having too much to do in any given moment of time

Women’s Share of Household Work Has Remained Almost Unchanged Despite Dramatic Increases in Paid Work

Statistics Canada, General Social Surveys, Households’ Unpaid Work, Labour Force Surveys, Women in Canada, Women in the Workplace, CANSIM

0

10

20

30

40

50

60

70

80

1956 1961 1966 1971 1976 1981 1986 1991 1996 2001

Female Share of Unpaid Household WorkFemale Labour Force Participation Rate

Labour Force Participation Rate of Mothers with Infants Age 0-2, Canada, 1961-1995

Statistics Canada, Canadian National Child-Care Study, Labour Force Annual Averages, Charting Canadian Incomes 1951-1981, Caring Communities

44.4

62.3

31.7

25

56.360.3

0

10

20

30

40

50

60

70

1961 1976 1981 1986 1992 1995

Participation Rate

Work effort and income

• Working couples with children were working, combined, about 206 more hours a year in 2000 than they were two decades earlier

• During the same time period, their average real disposable income increased by 8.4 per cent

Work effort and income• Comparison of work hours and income

shows that a substantial portion of people’s increased income comes from working more

• Therefore, increased disposable income has been bought with increased work effort

• Work and spend cycle- treadmill of consumption (average American today consumes 2X what they did 40 years ago)

Working harder: percentage change in hours worked per capita, 1970-2002source: OECD (2004)

-23.5

-17.1 -16.6

-7.2

11.9

16.820

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

France Germany Japan U.K. NewZealand

Canada U.S.

Working harder

• Between 1970 and 2002, annual hours worked per capita rose 20 per cent in the U.S. and 16.8 per cent in Canada

• OECD latest figures show that U.S. and Japan work longest hours/year among all industrialized countries

• OECD attributes rise in average U.S. incomes over this period to longer work hours

Long Work Hours and Health• “It seems that overwork can kill, but that we

know precious little about when, who, and how.” -- British Medical Journal (l996)

• Clear link between work stress and heart disease: recent Finnish study (BMJ) found that people with stressful jobs were twice as likely to die from heart problems than those with less stressful jobs

• Japanese have a name for sudden death caused by overwork: karoshi

Long Work Hours and Health• Links to anxiety, strain, irritability,

fatigue, sleeplessness, poor eating habits, accidents, depression, burnout, etc.

• Statistics Canada NPHS data found long hours increased chances of heart disease; unhealthy weight gain in men; alcohol consumption and depression in women; smoking in both men and women;

• Glaring gap in literature regarding work stress in relation to total work burden

Other costs associated with long work hours• GPI estimates absenteeism associated with

stress from long work hours cost Nova Scotia nearly $70 million in 2001

• Lower productivity in the workplace

• Costs associated with family breakdown

• Effects on children

• Long term societal costs related to breakdown of family life and parental absence from home

Underwork is also stressful:• Insecure work and the anticipation of job

loss are important sources of work stress

• In 1991, 11 per cent of workers worried about lay offs. By 1994, this more than doubled to 23 per cent. By 2000, 13 per cent cited fear of job loss as a source of workplace stress.

• Insufficient work hours can also lead to stress associated with poverty

Health impacts of underwork:• Studies show that those with low income

are more likely to have poor health and die earlier

• Unemployed tend to develop irregular sleeping habits, eat less nutritious food, smoke/drink more, are less physically active, experience symptoms of diseases that are exacerbated by stress

• Unemployed suffer higher rates of a wide range of mental/physical ills than those with jobs do

Health impacts of underwork:• Unemployed tend to be less satisfied

with their mental and physical wellbeing:

• They report more long and short-term disabilities than the employed do

• Are sick almost twice as often as the employed

• Visit their physicians more frequently than those with jobs

Health impacts of underwork:

• The unemployed are 20-25 per cent more at risk for heart disease, chest pain, high blood pressure, and joint paint than the general population

• Does unemployment directly cause these adverse health outcomes? Still unclear. More study required in this area.

Costs associated with unemployment• GPI estimated unemployment in Nova

Scotia cost the provincial and national economy at least $4 billion in 2001 in lost output and taxes and in direct payments to the unemployed

• Unemployment may cost Nova Scotia between $250 million and $400 million/yr in excess disease, crime, and divorce costs (higher figure includes hidden unemployed and a wider range of crime cost estimates)

Both overwork and underwork create health, social problems• Increasing polarization of hours in

Canada = main cause of growing income inequality throughout Canada

• Inequality, low income reliable determinants of poor health.

• Overworked, underemployed = equal risk of heart attack

A Better Balance: Learning from the Europeans• Belgium: 1995- 8 per cent of the civil

service (7,000 workers) took a 20 per cent reduction in work hours in exchange for a 10 per cent reduction in pay

• Netherlands: “Dutch Disease” to “Dutch Miracle”

• 1/3 of all Dutch workers works under 35 hours a week with many job-sharing

Netherlands: Making Part-time Work Desirable• Non-discrimination law: equal hourly

pay, pro-rated benefits, equal promotion opportunity

• unemployment 12.2% —> 3.8% (2003) - Highest rate of part-time in OECD (33%)

• Involuntary part-time = 6% = 1/4 of Canada’s rate; 1/5 of Nova Scotia rate

More vacation time• Sweden, Luxembourg, France, and

Austria have up to 5 weeks of holidays per year

• 70 per cent of German workers have 6 weeks or more of paid vacation per year

• Dutch work 469 fewer hours/year than average U.S. worker -- the equivalent of 3 months less work per year

New work schedules • Job sharing

• Shorter workdays

• 4-day workweek

• Longer vacations, sabbaticals, or educational leaves

• Phased-in retirement

• Flexitime

• Telecommuting

Sharing the Work Can...

• Reduce unemployment, underemployment and overwork

• Improve work-life-family balance and health

• Increase free time and community service

• Protect the environment, spare the planet from over-consumption, natural resource depletion

Voluntary Work Reduction: An Alternative to Layoffs• Direct cost savings through reduced

EI, SA, & severance payments, and maintaining tax base

• Indirect savings - less health and social costs

• Retains valuable workplace skills

• Reduces stress and improves work-life-family balance

Voluntary Work Reduction: An Alternative to Layoffs

• Improves morale, service delivery, productivity through reduced stress, absenteeism, lateness, turnover, fatigue and errors

• European studies show 50% of work time reduction made up in increased productivity

Voluntary work reduction can create jobs:

• In 2001, 1.2 million Canadians were out of work. At the same time, workers clocked 9 million hours of paid overtime -- the equivalent of 225,000 full-time jobs

• Example: Union at Powell River, B.C., pulp and paper plant restored 89 lost jobs in 1997 by reducing its workers’ overtime hours

Voluntary work reduction can create jobs:• “Research shows that a major reduction in

working time could result in a meaningful decrease in unemployment and a significant redistribution of jobs.” -- Donner Report

• Informetrica simulation (1995-2004) showed that a 10 per cent reduction in working time would result in:

• A 5 per cent increase in hourly productivity

• Drop in unemployment rate by 4 percentage points

Informetrica simulation continued...• Slight decline in disposable income

due to shorter work hours

• Substantial increase in leisure time

• Little change to the GDP

• Decrease in government spending on EI and SA

• Widening of the tax base

• Slight increase in corporate profits

Reduction of work hours in Nova Scotia: Case study

• GPI Atlantic showed that 10 per cent reduction in work hours in Nova Scotia would free up enough hours to create 20,000 new jobs (after productivity offsets)

• If these jobs were filled from the ranks of the unemployed, the provinces jobless rate would be nearly cut in half

If we explicitly value...• Our free time

• The time we spend with family and children

• Productive unpaid work done in households

• Our voluntary contributions to community

Then we will naturally explore policy options that are currently not on the political agenda

By including these values in our core measures of progress...

The Genuine Progress Index can draw attention to workplace models that:

– go beyond superficial coping, stress relief

– can improve health and wellness

– enhance the quality of our lives

Genuine Progress Index for Atlantic CanadaIndice de progrès véritable - Atlantique

www.gpiatlantic.org