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Economy

Would You Like a Thirty-Hour Workweek?

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Authors: Meena Miriam Yust and Arshad M. Khan

In the earliest days, foraging was key.  Fruits, berries, edible plants and roots comprised a varied diet, the roots often mashed and made into meal. 

Then there were days when the men — usually layabouts for foraging — would get the urge in their bellies for meat.  That was when all the chatting and bonding paid off.  Working together they could down a large beast and share the meat with the whole group … feasting for several days. 

No nine-to-five slavery in those times, no five-day work week.  That is all of recent vintage.  And it leads to an unmistakable Monday morning feeling …  

Millions of alarm bells sound in the wee hours of the morning, as semi-comatose individuals slide their snooze buttons hoping for a moment’s rest before the inevitable rush to the office.  The weekend is over.  Fun over, work beckons.  Marching along like ants going to their own funeral, masses of people will soon swarm into the subway, vying for a seat in a stench-free area, surrounded shoulder to shoulder with others like them. 

And for what when we know first hand that wage buying power hasn’t changed in decades while US income inequality continues to grow.  Good luck to the rich who keep getting richer as the stock market booms while trends in wealth show the lower 60 percent have seen a net worth decline.  Can we ever get a real wage increase?  Yes, by working fewer hours for the same weekly salary when the over overtime on a few hours more would boost our financial health.  More money and free time makes for a happier work and life balance.  Just as raising the minimum wage, it would have an impact on pay inequality as economist Ben Zipperer made clear in his testimony before Congress last year.      

For most of us, next come the Tuesday blues, that lethargic, listless feeling of no escape.  Wednesdays mark the halfway point, Thursdays bring the hope of almost-Friday, and then Friday arrives with the joy of the weekend break.  But soon it will be Monday morning again.  The majority of our lives are spent working.   The weekend leaves barely enough time for recovery, laundry, and if we’re lucky a smidgen of fun, before returning to the tedium of the five-day work week.   It’s not that the powers that be are unaware of our circumstances.  As long ago as 1935, the Senate Judiciary Committee held thirty-hour work week hearings but the idea failed to get traction. . 

But is this weekly misery necessary?  And where did it come from?

One year marks an orbit of the Earth around the sun.  Months too are derived from astronomy. Five thousand years ago, the ancient Sumerian calendar had 12 months marked by the sighting of a new moon.  They did not have weeks.  And archaeologists have discovered a hunter gatherer calendar from Aberdeen, Scotland dating farther back from 8,000 B.C., which also appeared to mimic phases of the moon to track months.  

The history of the seven-day week leads us to Babylon 4,000 years ago.  With a lunar month they used seven days to represent each of the four phases of the moon, adding an intercalary day(s) to synchronize it to the actual lunar cycle.  All of which worked out very well because they believed there were seven planets in the solar system and deemed the number significant.  The seven-day week eventually spread to Egypt, Greece, and thence to India, China and Rome, ending up in the Gregorian calendar we use today. 

The five-day work week was first introduced in a New England mill in 1908.  Before this, Saturdays were a half day and Sundays a holiday.

It was not expected that humans would still be doing this a century later.  John Maynard Keynes in 1930 predicted that the work week would be reduced to 15 hours, within a couple of generations, due to advancements in technology.  In 2017, economist and historian Rutger Bregman put forward its feasibility by 2030 in his best seller, Utopia for Realists.  A Senate subcommittee in 1965 also predicted we would be working 14-hour weeks by the year 2,000.  

More recently, companies have started to study whether there are benefits to a four-day work week.  Microsoft Japan recently reported the results of a four-day work week study.  The company had employees work four days while receiving five-day pay.  The results were striking – a whopping 40% increase in productivity.  The firm also reported increased efficiency in several areas, including lower electricity and paper usage.

A New Zealand company Perpetual Guardian in 2018 experimented with a four-day work week with five-day pay.  It resulted in a 20 percent increase in productivity while employees experienced a 45 percent improvement in work-life balance.  The company has now made the policy permanent. 

Another example is a company called Basecamp.  Employees work 8 hours a day for four days. Jason Fried, the CEO, states in a New York Times op-ed that “Better work gets done in four days than in five.”  

Despite the jokes about civil servants they do work, and some very hard.  In a study of British civil servants, it was determined that those who worked 55 hours per week showed a comparatively greater cognitive decline some three years later than those working for 40 hours.  Imagine what happens to us when we extend this to a lifetime of 40-plus-hour weeks. 

The question is, do we need to work even 40 hours per week?  If Keynes predicted humans would only need to work 15 hours by this point in time, and there has been an explosion of technological advancements in the last 30 years unimaginable to him — from computers to robotics to the internet and advancements in every type of engineering and medical field — then why are we still 40-hour slaves, particularly when the Basecamp example has demonstrated that 32 hours per week is equally or perhaps more productive? 

Next is the question of whether even 32 hours, as at Basecamp, are necessary.  David Graeber is an anthropologist at the London School of Economics.  His 2018 book Bullshit Jobs: A Theory describes jobs that appear to have no useful purpose.  These are far more common that one might expect.  In a poll of British citizens, 37% considered their jobs meaningless.  In the Netherlands, 40% of respondents believed their job had no reason to exist.  Graeber defines bullshit jobs as “a form of paid employment that is so completely pointless, unnecessary, or pernicious that even the employee cannot justify its existence even though, as part of the conditions of employment, the employee feels obliged to pretend that this is not the case.”  

In many of these jobs, employees sit at a desk five days a week with nothing to do.  In other jobs, higher management invents tasks for subordinates to complete solely to fill their time.  Some jobs exist merely for appearances.  He splits them into categories, encompassing jobs with which we are all too familiar.  “Flunkies” serve the purpose of making others feel superior (these include doormen, assistants, etc.).  “Goons” encompass those such as the public relations professional whose job is to show the public that Oxford is a top school!  “Duct tapers” are people in an organization who have to deal with its incompetence.  For example, the person who handles lost luggage at an airport or addresses complaints on the phone. “Box tickers” are designed to look busy and push paper work forward. “Taskmasters” are split into two types – those that assign more bullshit work to subordinates “bullshit generators”, and those who supervise people who do not need supervision. 

For the 60% of people who do not have “bullshit jobs” – studies have shown that fewer work days increases productivity and efficiency, not to mention mental well being.  Companies will be more efficient, workers will work better and will be rested and refreshed, and employees will be more likely to stay in their jobs.  It’s a plus-sum game if the work week is cut to 30 hours/ 4 days forthwith.  Anything beyond 30 hours would be overtime, at time-and-a-half rates.  The proposal is still twice John Maynard Keynes’ 15-hour expectation.  

There is another very good reason for this proposal:  Real wages in the US have been stagnant since the 1960s while the GDP is up over four fold and the stock market Dow is up about ten times, also in real terms i.e. after allowing for inflation.  It means stock and asset holders have been getting much, much richer while the working sucker is getting nowhere.  Cutting the work week down is a fair way to get part way (a very small part) even.  It is 25 percent less work and a one-third real increase in wages making a minor dent in the horrendous inequality in the US, which happens to be way ahead in this dubious honor among all developed countries. 

It is a long time since the hunter gatherers of Scotland or the Babylonians.  Their week remains ingrained, and the weekend created thousands of years later expanded from the Biblical single day of rest to one-and-a-half days in England, and then finally to two in New England at the beginning of the 20th century.  A hundred years later, is it not high time we advanced to three days?  Or perhaps to diminish the chances of worse Monday morning blues, it might be better to work two days, have a day off, then two more days of work before the regular weekend.  Humans were not designed for undue stress, we were designed for leisure, to be gathering food as we need it, and occasionally hunting, as the Scots mentioned earlier, and others of our ancestors did happily for generations.  

Authors’ Note:  This article first appeared on Truthout.org in a shorter edited version.

Meena Miriam Yust is an attorney based in Chicago, Illinois. Educated at Vassar College and Case Western Reserve University School of Law, she published a draft Migratory Insect Treaty with commentary in the Case Western Reserve Journal of International Law.

Economy

The Economic Conundrum of Pakistan

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The State Bank of Pakistan (SBP) is due to convene on 20th September 2021. The Monetary policy Committee (MPC) will be announcing its policy rate after retaining it since March 2020. As the world deals with the uncertainty of the delta variant along with the dilemma between inflation and growth, it is a plenary to watch as Pakistani policymakers would join heads to decide the stance on the economic situation. However, the decision would be a tough one. Primarily because the mixed signals could either lead to burgeoning inflation and subsequent financial deterioration or they should guide the central bank to strangulate the growth prematurely. Either way, the policymakers would have to be cautious about the degree of inclination they lean to each side of the argument – economic contraction or growth with inflation.

A poll conducted by Topline Research shows that about 65% of the financial market participants expect status quo; the MPC to maintain the policy rate at 7% to further accommodate economic growth. Pakistan has barely mustered a 4% growth rate after the contraction of 0.4% last year. In this regard, Mr. Mustafa Mustansir, head of Research at Taurus Securities, stated: Visible signs of demand-side pressure are still quite weak. In another survey conducted by Policy Research Unit (PRU): a policy advisory board of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI), 84% of the market participants believe there will be no change in the policy rate. The sentiment implies that the researchers and the business community don’t expect a rate hike in this week’s policy meeting.

However, the macroeconomic indicators paint a bleak picture for Pakistan’s economy: warranting a tougher policy response. The external trade figures released by the Pakistan Bureau of Statistics (PBS) project a debilitating situation for the national exchequer. According to the data, Pakistan’s trade deficit has increased to $7.5 billion in the first two months (July-August) of the fiscal year 2021-22. The deficit stands at $4.1 billion: 120% higher than the same period last year. Due to the accommodative policies implemented by the government of Pakistan, the trade deficit has already climbed 26% up to the annual target of $28.4 billion, set in the fiscal budget 2021-22. Despite excessive subsidies, the bi-monthly exports have only grown by 28% to stand at $4.6 billion. And while it is an increase of nearly a billion dollars compared to the same months in the preceding year, the imports have more than perforated the balance of payments.

During the July-August period, the imports have grown by a whopping 73% to stand at $12.1 billion: 22% of the annualized target. What’s more worrisome is the fact that despite a free-float currency mechanism, the exports have failed to turn competitive in the global market. According to the data released by PBS, Pakistan’s exports have dropped from their previous levels for three consecutive months. And despite a 39% net currency depreciation in the past three years, the exports continue to drift sluggish around the $2 billion/month mark. Yet, the imports are accelerating beyond expectation: clocking a 95% increase last month alone. Clearly, something is not working.

Moreover, while the forex reserves with the State Bank stand at a record high of around $20 billion, the rapid depreciation in the rupee is gradually damaging the financial viability of Pakistan. According to Mettis Global, a web-based financial data and analytics portal, the rupee recently slipped to its all-time low of 168.95 against the greenback. While the currency reserves are at their peak, the rupee continues its losing streak as the State bank has refrained from intervening in the forex market to artificially buoy the currency. Primarily because the IMF program stands contingent on letting the rupee float and find equilibrium. As a result, the rupee is touted to breach the 170 rupees against the US dollar mark by next month. The bankers around Pakistan have urged the State Bank for an intervention to put an end to “abnormal volatility in spite of increased reserves.” However, an intervention seems highly unlikely as the SBP Governor, Dr. Reza Baqir, already warned regarding currency devaluation in the last policy meeting: citing supply constraints, debt repayments, and increased imports as primary reasons for the temporal slump.

Nonetheless, almost 10% of the market participants, according to the survey, expect a rate hike of 50 basis points in the policy rate to hedge against inflation. Furthermore, analysts at Topline Securities expect a hike of 25 basis points to counter “vulnerabilities in the current account and control inflationary pressures.” Regardless of the prudent beliefs in the market, however, a few players actually believe that a rate cut of 50-100 basis points is plausible in the meeting. They argue that while the Consumer Price Index (CPI) – a national inflation measure – refuses to let down, the core inflation of Pakistan has dropped perpetually down to 6.3% in August. A stratum of the business community, therefore, also believes that the policy rate should be gradually brought down to 5% to match the regional dynamics.

I somehow find this notion ironic, as the government has already doled billions of dollars in subsidies, provided lucrative loans, and slashed taxes periodically. Yet, the exports have stayed relatively redundant. While it may not be the most effective time to hike the policy rate and tighten the monetary policy, in my opinion, a cut in the policy rate would be detrimental – catastrophic for the current account and incendiary for prevailing inflation.

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Economy

Global Revolution in the Crypto World: Road to Legalization

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The raging popularity of virtual currencies is hardly unheard of in today’s day and age. If not by the damning crackdown in China, price swings in cryptocurrencies – especially bitcoin – are definitely deemed perpetual and inherent: unlikely to go away. And while the volatility does bring along a unique thrill to retail investors, the experienced pundits of the financial world are expectedly skeptical. Regardless of the apparent discomfort and resistance to tap into the pool of virtual currencies, policymakers across the world are aware that the future is digital. Therefore, while digital fiat seems to be the direction of most developed economies to counter the decentralized giants, the economic gurus are preparing to harness the mania on another front as well – before the craze overtakes the globe.

The first – and most popular – cryptocurrency is undoubtedly bitcoin. In the aftermath of China’s crackdown on mining activities, bitcoin lost more than half of its valuation. However, acceptance around the world in the past few weeks has helped the currency to buoy past the slump. Bitcoin currently stands at a market cap of $863.8 billion: flirting with the $46,000 mark. Naturally, the rest of the crypto world flows in tandem as fanatics have placed bets for the currency to breach the $50,000 psychological mark again in the following months. However, the rally is largely attributed to the blooming acceptance by governments around the world; something the officials were wary of to avoid risks and uncertainty. However, I still don’t understand the change of perception given the market is more volatile than ever.

Last week’s headlines were all about El Salvador and its adoption of bitcoin as a legal tender. The fiasco that followed was hardly a surprise. Though the incident bolstered the crypto critics, the event projected nothing that was a mystery before the launch. A glitch in the virtual wallet, called “Chivo Wallet,” was one of the countless impediments that had already been warranted as risky by economists around the globe. While the problem was resolved in a matter of hours, the price of bitcoin nosedived by 19% from the 4-month high of $53,000. President Nayib Bukele boasted about “buying at a dip” yet overlooked a crucial aspect from a broader perspective. He failed to realize that a minor glitch in his small nation was significant enough to send the currency spiraling; that in mere hours, billions of dollars were wiped from the global market. All because the app couldn’t appear on the designated platforms for a few hours.

What happened in El Salvador is a vital example to analyze. The resulting confusion is exactly why a passage of regulation is being placed. If the domestic and international markets are to rely upon cryptocurrencies in the near future, then the need for a detailed framework becomes even more amplified.

Recently, Ukraine became the fifth country in weeks to legalize bitcoin. However, while the Ukrainian parliament adopted a bill to legalize the cryptocurrency, regulations are put into place to handle its precarious and volatile nature. Unlike the loose move by El Salvador, Ukraine did not facilitate a rollout of bitcoin as a form of payment. Moreover, the parliament has refrained from placing bitcoin on an equal footing with Hryvnia – Ukraine’s national currency. Primarily because adding another currency prone to unprecedented and wild swings in value could prove complex in policymaking matters including drafting fiscal budgets and taxation planning. And while Kyiv is pushing to lean further into bitcoin to gain more access to global investment, the authorities are prudent. Therefore, unlike the brazen entry by El Salvador, the Ukrainian authorities are underscoring a strategy to learn about the crypto world before bitcoin is etched into Ukrainian law forever.

Meanwhile, the United States is proving rather stringent against the rise of bitcoin – and the crypto world – as nightmares of another financial crisis are caging a progressive adoption. The lawmakers are already vigilant to put braces on the market before it blooms beyond control. The Infrastructure Bill recently passed by the senate provides a hint of direction being adopted by the US legislators. The tax provision, estimated to collect $28 billion over a decade, has been placed as a regulation of the crypto market that stands at a valuation of $2 trillion. The Treasury directives are driven to mobilize the Internal Revenue Service (IRS) to tax crypto brokers while monitoring mandated reporting requirements. The goal is obvious: gradually tighten the screws before regulating the uncharted territory as any other capital market. However, the bill is purposefully vague regarding market actors deemed as brokers under the new law. Naturally, the frenzy follows as miners are left scrambling to define the meaning of a broker in an extremely complex and unorthodox market mechanism. It is clear that prominent lawmakers, like Senator Elizabeth Warren, are the main driving forces to put a leash on the emerging market.

Furthermore, the US Security and Exchange Commission (SEC) has been vocal about Treasury’s long-awaited intervention in the crypto market. Allegedly the virtual currencies have come across as a key tool for tax evasion in the United States. Therefore, much of the lobbying to amend the tax provision in the infrastructure bill is to limit the strictness of application rather than simplifying the vague terminologies. Moreover, the Treasury Department has also been active in discussing the financial stability of Stablecoin – crypto assets pegged to the US dollar and other fiat currencies. While extreme volatility is not a risk in this scenario, the Federal agencies – particularly the Financial Stability Oversight Council (FSOC) – have been keen to set tougher regulations over the market with more than $120 billion in circulation. The move has been swift since the tax provision made its way into the Senate debate. The main intent to regulate stablecoin – particularly Tether – is to harness the market, primarily because the sector acts as an unregulated money market mutual fund holding massive amounts of corporate debt. A plunge in price is enough of a spark to send ripples through the fixed income markets: posing a financial threat to the entire market. Thus, the FSOC is touted to be mobilized soon to probe and regulate the market as it continues to grow.

The crypto world has been cited by global lenders such as IMF as a haven for money laundering and tax frauds. Such tags could lead to negative credit ratings and ineligibility to gain investment and aid packages, especially when debt-ridden countries like El Salvador dabble along without any fixed legal framework. However, with broader regulation, like the steps taken by the US and Ukraine, the risk could be minimized. Another area is to initiate with experienced investors before gradually easing market restrictions for retail investors. A prime example is Germany which recently allowed institutional investors to invest as much as 20% of their holdings in bitcoin and other crypto-assets. While the portion still congregates to billions of dollars, such deft institutional investors are trained enough to manage and monitor trillions of dollars in a vast array of capital markets. Moreover, such large-scale institutional investment firms already have strict regulatory requirements and thus, by default, are bound to consciously maintain conservative holdings.

In my opinion, the crypto market is the financial future of the technological utopia we aspire to build. The smart choice, therefore, is to learn the system down to its spine. Correct the loopholes and irregularities while monitoring experienced professionals participating in an open market. Sketch and amend the legalities and a financial framework along the way. And gradually let the market settle as second nature.

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Economy

CPEC: Challenges & Future Prospects

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Global economy paradigm is shifting from the West to the East while China is torch bearer in this context with it’s master stroke OBOR project. The beauty of this unique project is that it provides a new trade corridor and a new route to at least 60 countries. If we make an educated guess, then about 80% of the world population would get benefit from this project. This project can be divided into “Silk Road economic belt” and Maritime silk road”. For disbursement of funds, five financial institutions are opened so that the complete burden should not fall on China. Now it has been a proven fact that the US, few Western countries and India are lobbying and conspiring against the OBOR project.  

The most important project of this initiative is CPEC as it gives China access to the most important geo-strategic location of Gwadar that had always been dream of Russia and NATO for their strategic, military and economic interests in the region. The only project which gives landlocked countries access to the sea. CPEC certainly can be game changer due to its potential of creating mass industrial productivity, exports, and job creation not only for Pakistan but for entire South Asian region.  

Due to various factors, there are always chances that mistrust may prevail among Pakistan and China, which can have a direct impact on Pakistan’s economy. The economy plays a fundamental role in the development and strengthening of any country, but unfortunately, Pakistan was unable to stabilize this sector for decades. As soon as the situation becomes better, another incident of unrest happens. Attacks like the Dasu hydropower plant in Khyber Pakhtunkhwa or like Serena Hotel Quetta are preplanned efforts of our enemies like India to destabilize the project. Although, it has been accepted by Chinese think tanks on various occasions that the security situation has improved in Pakistan during the recent few years. 

Luckily, due to the US withdrawal from Afghanistan, Indian investment is also dying. There is no doubt that the economic stability that Pakistan will achieve after the completion of CPEC cannot be digested by an eternal enemy like India. India is intensifying its covert operations against CPEC, as its discomfort is growing day by day with the cozying Pak-China relations. Modi’s government believes that once operational, CPEC will reduce its sphere of influence in Central Asia, IIOJ&K, and Afghanistan.  The terrorist network formulated in Afghanistan to create unrest in Pakistan under the garb of diplomatic activities has also been jeopardized. As CPEC passes through Gilgit-Baltistan which India claims as a disputed territory but their claim was rejected out rightly by Pakistan and China. Now India may try to reinstate its sleeper cells inside Pakistan to disrupt CPEC.

CPEC in particular offers a win-win situation for participating nations and it has a strong component of social development, poverty alleviation, and demographic uplift, unlike similar programs offered by other international donors. CPEC would not impact its balance of payments of Pakistan at any stage. The payment schedule is very relaxed. It’s about geo-economics and the establishment of a non-exploitable economic system. Another point is that CPEC is a transparent project with all its details present on its websites. The projects of CPEC are not only confined to specific areas but its network is present in the whole of Pakistan. 

Although, it’s correct that Pakistan has a risky security environment, but Pakistan has taken various positive steps in this regard like raising two “Security Divisions” in Pakistan Army, incorporating special paramilitary forces, increasing intelligence apparatus, and improving local police networks.  

There are eight main core areas linked with CPEC which are ‘integrated transportation system’, ‘information network infrastructure’, cooperation in ‘energy related’ fields, ‘trade and industrial parks’, ‘agricultural development and poverty alleviation, ‘tourism’, ‘social development and non-government exchanges’ and lastly ‘financial cooperation’. CPEC is now attracting other countries around the world who are also expressing their desire to join it. 

In present circumstances, the CPEC projects must be completed as soon as possible so that Pakistan’s geographical location can be truly exploited. Our narrative building part is weaker in International media as India and other lobbies are floating a huge bulk of anti-CPEC stories with fake facts and figures, we have to give proper rebuttal and our side of the story must be backed with verified facts and figures. Another point to be focused on is that a prosperous Balochistan would strengthen CPEC’s foundation. This is a real game-changer and we have to engage maximum countries of the world in this project to get moral, social, and financial support. 

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