Thought Leaders of the Emerging Regenerative Economy
Thought Leaders of the Emerging Regenerative Economy
Juliet Schor, a Professor of Sociology at Boston College, writes and lectures on the connections between consumerism, work life, and environmental sustainability. She is a founding board member of the Center for a New American Dream and author of the best-seller The Overworked American: the Unexpected Decline of Leisure, of The Overspent American: Why We Want What We Don’t Need, and Born to Buy: The Commercialized Child and the New Consumer Culture.
We spoke with Schor about her new book Plenitude: The New Economics of True Wealth (published as True Wealth in paperback), in which she questions the conventional wisdom that maximizing income and growth is the path to well-being.
What Drives Juliet Schor?
How can Americans trade work time and income for a more meaningful life and a healthier economy and ecosystem?
The World According to Juliet Schor
“If we think about it in the global context where half the world’s population does not have access to ecological resources and we will likely have 2 billion more people on the planet, it is clear that the wealthy who are overconsumers of ecological resources need to reduce the pressure they are putting on those resources. For that segment of the population a shift from work time to leisure is key.”
“Before the current downturn many people were reporting that they were working more hours than they wanted to and would prefer to trade some income for more time. So while there may be a mindset now of ‘let’s just get back to where we were,’ we need to be reminded that the status quo prior to the recession was not optimal for most people with full-time jobs.”
“When people work too many hours they tend to feel deprived and they use consumption to reward themselves, whether that be for an expensive vacation, kitchen remodel or a bigger diamond. The downturn has actually opened up space for people to think about different trajectories for their consumption expectations over their lifetimes.”
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Juliet Schor’s Storyline
Juliet Schor’s personal trajectory and that of her work as a scholar of labor and consumer culture have intersected often and fruitfully. Born during the McCarthy era to parents whose politics were decidedly left of center, her father lost his position in the last year of his surgical residency at Maimonides Hospital in the Bronx. Unable thereafter to find work in New York City, he accepted an invitation extended by the United Mine Workers Union to establish the country’s first specialty health clinic for miners in a small southwestern Pennsylvania mining town. Schor grew up in the town, where she developed a strong consciousness of class differences and labor exploitation. Although she was unaware of her parents’ political past, she found her way to Marx at an early age. (She reports that his writings weren’t hard to find on the family bookshelves.)
Juliet went on to study both philosophy and economics as an undergraduate at Wesleyan University, but found herself gravitating increasingly toward the latter “more worldly” discipline. Later, as a doctoral student in economics at the University of Massachusetts, she began exploring the interrelationship between how employers controlled and disciplined workers, and conditions outside the workplace. She and her advisor, Sam Bowles, quantified these conditions in a variable they called “the cost of job loss.” “The cost of job loss included things like how long a person can expect to be unemployed and the social welfare benefits he or she will be eligible for as an unemployed person,” Juliet explains. “We showed that the cost of job loss drove a lot of outcomes in the economy including wage movements, the propensity to strike, and how hard factory workers actually work.”
She went deeper into labor market studies as an economics professor at Williams College where she worked with colleague Gerald Epstein (now co-director of the University of Massachusetts’ Political Economy Research Institute) on research that showed how the cost of job loss affects monetary policy. Schor and Epstein discovered that the cost of job loss was a strong predictor of Fed policy—when the cost was high the Fed had more flexibility to lower interest rates without wage inflation consequences. When the cost of job loss was low, the Fed raised interest rates. As Schor notes, “This was an unusual theory at the time. No one was connecting Fed policy with labor market conditions.”
In 1984 Schor joined the department of economics at Harvard University, where she was assistant professor, associate professor and eventually senior lecturer. In her first year she taught Ec 10, the storied intro class which had and would be the focus of considerable political attention over decades. At that time, Martin Feldstein was taking over the class and cancelled the section on “radical” economics that Schor had been planning to teach. Radical sections were never instituted, but in recent years, Stephen Marglin has taught an alternative to Ec 10 in the General Education curriculum.
Meanwhile another determinant of “the cost of job loss” equation—the number of hours worked—began to draw Schor’s interest. The theory of labor discipline she was working on suggested that employers would raise hours of work beyond what employees preferred. She wondered, “if workers are working more hours than they want to, then why don’t they just save up money and reduce their hours of work, a kind of intertemporal choice?” She knew one of the reasons was that companies provided incentives to people to work long hours. By keeping the cost of job loss to the employee high they had more control over labor discipline. Conversely, it was no surprise that companies provided disincentives to part time workers, including penalties like lack of benefits and compromised career trajectories.
But still another question remained, “What do workers do with the money they earn and why is it so hard for them to save money?” That led to an investigation of the social pressures to spend and to an exploration of consumer culture and the social dynamics of spending.
Thus, from the early 1990s on, Juliet’s research and writing turned more and more to an examination of consumer culture. In 1992 she published her first book, The Overworked American, a look at the relationship between the number of hours Americans work and the decline of leisure in this country. “Writing the Overworked American coincided with having a child, which in turn made me more family centered than I had been,” she reports. Her next work, The Overspent American, was an analysis of the social determinants of spending and, in 2004, she published a withering survey of the commercialization of childhood: Born to Buy: The Consumerized Child and the New Consumer Culture. She wrote both books during a period in her own life whenshe was becoming more conscious of her own spending habits.
With Plenitude (2010)—published as True Wealth (2011) in paperback—Juliet returned to her study of the labor market, this time with the environmental dimension of working hours front and center. The book addressed not only the work and spend cycle, but the role of time use in reducing ecological impacts and improving quality of life.
Over the last 20 years, Juliet, her husband and their two children have been on a steady path of reducing their own ecological footprint. “We were longtime vegetarians, but now we live close to where we work, we compost, we had our house retrofitted to reduce energy consumption, and we have reduced our vacation travel and cut out flying as a part of that almost entirely,” she reports. “That said, we have not gotten as adventurous as many have. We have a garden but we are not keeping chickens and we don’t have a windmill in our backyard!”
Our Conversation with Juliet Schor
In Plenitude you make the point that policymakers continue to look to the GDP growth model as a cure-all for society’s ills and yet it has failed to deliver higher levels of well-being, solutions to long-term unemployment or a sustainable global economy. You also maintain that developed nations now need to adjust to a lower or zero growth economy because the very survival of the ecosystem requires that they begin to cede their disproportionate use of the earth’s finite resources to developing countries. Can we talk about how a shift to fewer hours worked in the market economy and more hours spent in meaningful, creative nonmarket activities will facilitate this transition?
Juliet Schor: First of all, we need to understand that it is not going to be possible for wealthy countries to downshift into the required lower or zero growth mode unless we start taking productivity growth in the form of fewer hours of work. Let me unpack that. There are two key components of growth in a market economy: one is “extensive” growth where the market takes over areas of activities that were not previously within it. For example, we have had the marketization of domestic services and household production, which has been going on since the 19th century, as women joined the market labor force. The other kind of growth is “intensive,” which involves increases in labor productivity for a given amount of work time–more produced in less time. Since the second half of the 19th century the US and all industrializing countries took a significant amount of productivity growth to shorter hours of work. They transitioned from an average 60-hour work week, down to a 40-hour work week. In Europe work hours have continued to fall with productivity gains. However, since the 1970s the United States has used all of its productivity growth to work more, and to produce more. That means that our ecological impact is expanding and we are putting more pressure on the environment than it can handle. We are seeing the impact on climate, biodiversity, the nitrogen cycle, water scarcity, etc. So if we think about it in the global context where half the world’s population does not have access to ecological resources and we will likely have 2 billion more people on the planet, it is clear that the wealthy who are overconsumers of ecological resources need to reduce the pressure they are putting on those resources. For that segment of the population a shift from work time to leisure is key.
Do shorter work hours mean a shorter workweek?
Juliet Schor: There are many ways to realize shorter work hours. You can go to a 4-day workweek. A whole extra day is a lot more valuable than a little more time off every day and it cuts off one day of work travel which is a good in terms of carbon impact. But there are other ways to do it. For example in Europe it has been through increases in vacation time with people getting more and more paid vacation—up to 6 to 8 weeks of paid vacations in some European countries. In the US we have no mandatory paid vacation and the average vacation is around two weeks. The other way is to have people work less over their entire working life, retiring earlier, for example, or taking sabbaticals.
Why has this shift been so difficult to accomplish in the United States?
Juliet Schor: When I published The Overworked American: The Unexpected Decline in Leisure in 1992 people were feeling extremely overworked in this country and the reality of rising hours of work hadn’t yet been described. What the book had to say resonated with a lot of people. Before the current downturn many people were reporting that they were working more hours than they wanted to and would prefer to trade some income for more time. So while there may be a mindset now of “let’s just get back to where we were,” we need to be reminded that the status quo prior to the recession was not optimal for most people with full-time jobs.
I have been really surprised since the current downturn how the idea of working less has not been seen as a solution to long-term unemployment. The academic economists who should have been expected to think about this, who should have come to this idea fairly naturally, haven’t. I think it has to do with the hegemony of neoclassical or neoliberal ideas in the economic conversation where growth is seen as the only solution to any economic problem. It is really not so much that people are averse to talking about work-time reduction but that they are averse to questioning growth. Work-hours reduction will be pretty easy to put on the table once we understand that we are not going to be able to grow our way out of unemployment.
At the same time I think it is also important to say work-hour reduction is not completely off the table now. A number of states have moved to authorize what are called shorter work-time policies where rather than lay people off companies can put them on shorter hours and those workers are eligible for unemployment insurance. In the downturn many companies across many different industries used furloughs and shorter hours to avoid layoffs. Some states like Utah and Georgia went to a four-day workweek. They did that in a nice spirit of equity rather than forcing a small number of employees to bear all the pain.
But the four-day workweek didn’t take hold in more than a few states because there was no underlying public policy to reinforce it. Contrast that with European countries such as Germany who used shorter work hours as a primary mechanism of adjustment. They ended up with much less unemployment in the downturn. In the Netherlands the financial sector went to a four-day workweek very successfully in response to high unemployment in the 1980s. It was part of a larger social response to keep their whole population employed. They now have one of the most successful and highly productive economies in Europe, with the shortest hours and high quality of life and personal satisfaction. [Editor’s note: See Schor’s blog post: The 80 Percent Solution.]At the same time I think it is also important to say work-hour reduction is not completely off the table now. A number of states have moved to authorize what are called shorter work-time policies where rather than lay people off companies can put them on shorter hours and those workers are eligible for unemployment insurance. In the downturn many companies across many different industries used furloughs and shorter hours to avoid layoffs. Some states like Utah and Georgia went to a four-day workweek. They did that in a nice spirit of equity rather than forcing a small number of employees to bear all the pain.
THE FIVE BOOKS THAT HAVE MOST INFLUENCED JULIET SCHOR
Pierre Bourdieu, Distinction: A Social Critique of the Judgment of Taste
Karl Marx, Das Kapital, vol 1
Georg W. Friedrich Hegel, Phenomenology of Mind
Thorstein Veblen, The Theory of the Leisure Class
Vandana Shiva, Earth Democracy
Can we talk about the variety of benefits that individuals and society will realize from shorter working hours?
Juliet Schor: We can view shorter work hours two ways: as a short-term, defensive strategy and as a long-term, offensive strategy. In the first instance it is a way of forestalling unemployment during periods of downturns in demand. But we can also use it as an offensive strategy along with productivity growth as a way to prevent ecological degradation and to create more time outside of work. Right now the short- and long-term value of shorter work hours are converging in ways that make this both a policy that is good for the environment and good for the downturn. It gives people more free time, solves unemployment and has positive ecological impacts—it is a triple dividend policy with good outcomes along three dimensions. And we can add a fourth dimension because we know shorter hours of work lead to higher quality of life, less stress, and more happiness.
What can policymakers do to transition us from an overworked society to one that enjoys the many dimensions of reduced work hours?
Juliet Schor: We can do it in a number of ways. If we do it with new workers coming into the labor force it is easier because they won’t have gotten locked into expenditure patterns and fixed payments whether they are mortgages or credit cards. While it is difficult to go voluntarily from full-time employment to part time, the more we do to ensure social goods and put less of the burden on the individual to pay for them the easier it will be for individuals to work less and earn less.
Another reason people don’t feel they have an option to work fewer hours is because in many jobs you can’t go to 80 percent time without implications for your career and for promotions, or without giving up benefits. So we need to build that type of flexibility into the labor economy. We need a federal law that allows shorter hours of work to be compensated through the unemployment insurance system. Now states have the option under federal law to apply for this but there are many that haven’t done it—it has been off the radar screen. A second initiative would be for government to begin new hires on an 80 percent schedule. Government is a big employer and this will have a ripple effect.
Policymakers could also structure tax credits to give incentives to employers who hire on 80 percent schedules, giving them a bigger credit than if they hire full-time employees because this would enable more people to be brought back into the labor force than if hiring is done on the full-time schedule. Policymakers could also raise the overtime premium to make it more expensive for firms to use overtime.
What actions can individuals take, in the absence of enabling policy, to transition their lives to shorter working hours?
Juliet Schor: A curious observation I have made from my years studying consumer culture is that when people work too many hours they tend to feel deprived and they use consumption to reward themselves, whether that be for an expensive vacation, kitchen remodel or a bigger diamond. The downturn has actually opened up space for people to think about different trajectories for their consumption expectations over their lifetimes. Younger people coming into the labor market have different expectations than they had 10 years ago when it was much more about money and a go-go economy. We are seeing the rise of the sharing mentality, more car-sharing, for example. The percentage of young people owning a car has fallen pretty dramatically. And people are using the Internet to get access to used goods or for sharing goods. The recirculation of products is an exploding trend.
So you move on each side. As you learn how to have a highly satisfying consumer life with less expenditures, that allows you to work less hours and value your time outside of work more.
What role can the financial markets play in facilitating the transition to reduced working hours?
Juliet Schor: If we want to see a shift to a less consumption-driven regime with more leisure time and more sharing the financial sector needs to start innovating products that make that possible. We could use financial products that allow people to borrow to do housing and car sharing. I would also like to see the expansion of products such as location efficient mortgages that make it easier for people to buy houses closer to mass transit.
Creative savings vehicles would also be key financial sector contributions. The more the financial system can help people save the easier it will be to shift to a declining work hours trajectory. The interesting thing is that countries like the Netherlands that have managed the biggest declines in working hours are also countries where people save a lot.
What are the parts of the market economy that will be most affected by this shift to shorter working hours and more leisure?
Juliet Schor: People will be able to spend time doing a variety of things with their leisure time that were formerly commoditized in the market economy. The archetypal examples are growing vegetables, or the care of children, the elderly, the sick and the disabled. We are already seeing huge amounts of activity going on outside the market with nonprofessionals being the source of entertainment through home-produced videos, music, writing, software coding, wikis and blogs. People are able to do them because they have time outside their paying jobs, it is called peer production and there is an enormous amount of activity going on in that space. People are producing things for the love of doing it and for the enjoyment of their friends and colleagues.—Susan Arterian Chang is Director of Capital Institute’s Field Guide to Investing in a Regenerative Economy project.