You’re not the only one who’s working more. According to “The State of Working America 2000-2001,” while the so-called “new economy” has led to higher productivity, it has not contributed significantly to job growth nor has the high-tech sector set the pace for “any meaningful wage gains” for workers in other sectors.
And the primary factor contributing to income growth over the last decade was working families working more hours, according to the report, with the greatest increase among middle class families, whose weeks worked grew in the last 30 years by the equivalent of one person working more than one third of a year, or an increase of 19 weeks.
Jeff Wenger, economist for the Economic Policy Institute, which published the Working America report, said last week that while a middle-class, married couple’s family income grew 9.2 percent from 1989 to 1998, a substantial part of this growth reflected a growth in work hours, up 182 hours to 3,600 total, or about 4.5 extra full time weeks a year since 1989.
”So more people are working overtime than ever before,” Wenger said, and although he still believes employees have “a lot of bargaining power” in a tight labor market, people are also obviously working when they don’t really want to and part timers are being “pushed into full time employees.”
The use of mandatory overtime has increased in the tight labor market, as has overwork in general, Wenger said, according to the Bureau of Labor Statistics reaching an all time high” in 1996, of 4.5 overtime hours per week, per employee, “for the first time on record.”
According to economist Lonnie Golden, associate professor of economics at Penn State University, in 1998, 46 percent of U.S. workers spent more than 40 hours per week on the job, with 18 percent working more than 50 hours.
And while many workers experience overemployment -involuntarily long or excessive hours – and are willing to reduce income proportionally for a reduction in hours, “they lack that option in their current jobs,” Golden said. “Many workers believe their jobs are at risk if they refuse extra hours or request shorter hours.”
Maintaining that today’s trend to overworking appears to be structural “rather than a temporary aberration,” Golden said that one cause is that the hourly wage rate, the main variable cost to employers, has risen at a much slower rate relative to the increase in fixed costs such as health insurance, workers compensation, and training, which rise with additional employees but not with additional hours worked.
Another factor is that the overtime premium has remain unchanged, providing more incentive for employers “to lengthen hours and lay off workers” rather than consider their employees’ needs for flexibility and control in their working schedules, Golden said. He called the inability of the labor market to redistribute hours from the overemployed to the underemployed and unemployed “a classic case of market failure.”
No choices
Mandatory overtime now applies to 20 percent of the country’s total workforce and 16 percent of the manufacturing workforce, Wenger said, and most workers feel “unable to refuse overtime without facing some penalty including dismissal.”
Unions are increasingly focussing on the issue, he said, with 20 percent of union contracts now citing the trend as an abuse and detriment to their members.
In four major strikes in the last two years Golden said “excessive overtime was a major issue,” and cited one case at General Motors in Flint Michigan where the company eventually agreed to raise employment by 5 percent to ease overtime hours.
The U.S. Department of Labor estimates that 20 million new jobs were created in the United States between 1993 and Nov. 1999 and that more people are working now than ever before. Labor productivity has grown about 2.5 percent per year, well above the 1.4 percent rate that prevailed from the mid 1970s through the mid-1990s.
The Economic Policy Institute is a nonprofit, nonpartisan “think tank” that identifies itself as seeking to broaden public debate about strategies to achieve a prosperous and fair economy.
