The thirty-five-hour workweek
Askenazy, Philippe
MANY AMERICANS were perplexed when a French Socialist government intro— duced a thirty-five-hour workweek nearly a decade ago. It seemed anomalous, especially given the constraints imposed by...
...But it is unlikely to make the French work or earn more...
...In the meantime, the principal unions that supported RTT are also at a strategic dead end...
...In her presidential campaign Segolene Royal tried to steer a middle ground between criticisms of and support for the sort of ideas that went into the Aubry laws, but she ended up sounding inconsistent...
...Several industrial organizations negotiated agreements by July 1998, but many of these contained provisions that, in fact, limited the effectiveness of RTT...
...Subsidies, wage restraint, and increases in productivity associated with flexibility compensated for the increase in labor costs induced by RTT...
...This is about the cost to the state of a nurse or a police officer...
...As in 1982, the Socialists now encouraged a negotiated RTT, pledging later ratification of agreements by law...
...Mitterrand wanted to reduce the legal work limit to thirty-five hours by 1985...
...These were to come in a second law, which would be enacted after negotiations with representatives of the different sectors of the economy together with companies and corporations...
...Companies that had already moved to a thirty-fivehour week were "punished," receiving lower state subsidies, whereas competitors that had stayed at thirty-nine hours had their social insurance contributions reduced by the state...
...Translated from the French by George Holoch...
...THE TWO-STAGE method of implementing RTT under the Aubry laws gave negotiations by sector and company a pivotal role in defining new norms of work time in conjunction with its reduction...
...Sarkozy's language—"the value of work," "the France that gets up early," "Work more to earn more"—has thus held sway in public opinion, even within segments of the working classes...
...In 2003, when the European Union still had just fifteen members, a full-time worker in one of them averaged 41.5 hours a week...
...It is also difficult to assess the net cost of the law for the public treasury...
...In calculating the actual impact of the law, however, we need to remember that apart from companies that benefited from incentive subsidies of Aubry I, there was no obligation to calculate hours worked before and after RTT...
...Employers denounced their approach, but the right's arguments were undermined by the earlier passage of the Robien law...
...Francois Fillon, then labor minister and now Sarkozy's prime minister, declared that the Socialist-led Popular Front Government of 1936 was responsible "for the collapse of the French nation in 1940" because it introduced a forty-hour workweek...
...This is what makes state intervention necessary, leading to a labyrinth of legislative and regulatory systems...
...The Socialists remain paralyzed and internally focused, lost in idealized terminology and unable to formulate a balanced, alternative program...
...Most of the former lost out financially from RTT...
...Consequently, one of the principal aims of the law was achieved...
...But on average, the thirty-five-hour week was a financially neutral proposition for most companies...
...In the meantime, trade unions were divided on many negotiating issues and also on basic strategy...
...The shift to a thirty-five-hour week came with wage restraint...
...The Socialists hoped for something much more substantial —a gain of a million—but the actual gain also disproves admonitions by employers that half a million jobs would be lost because of the thirty-five-hour week...
...Strauss-Kahn argued that "Employers, economists, unions, and government at least agree on one point: the 35-hour week will create jobs on only one condition, that the competitiveness of companies not be compromised by the program...
...This is, in fact, an invitation to fraud...
...The figures were 43.7 in Britain, 41 in Germany, 40.3 in Denmark, 40.5 in Italy, and 40.7 in France...
...It had to put together quickly a program to reduce the unemployment rate, which had by then reached a record level of 12 percent...
...Conversely, the autonomy of managers and most technicians was preserved, and they reaped the benefit of vacation days known as supplementary RTT, particularly valued by women managers...
...But in the aftermath of Fillon's proposals the issue of work time in France will likely fade from public debate for a while—at least until there is a fruitful reconstruction of the left and the unions...
...Companies with fewer than fifty employees could receive financial incentives by directly applying an RTT agreement signed on the sector level with unions...
...But after 1982-1983, when the government changed its general economic course, reducing working time and the goal of thirty-five hours were abandoned...
...The Patronat—that is, MEDEF, backed by major corporations—counted on failure of the incentive phase of Aubry I to undermine the entire project...
...The employers, who soon reorganized as MEDEF (Mouvement des Entreprises de France), argued that, unlike the Robien law, the "35 Hours" bills made changes obligatory for all companies...
...What about the impact on employment...
...DISSENT / Fall 2007 31 Yet this time, the economic environment had changed...
...There was significant reduction in working hours combined with job creation...
...PHILIPPE ASKENAZY is a senior researcher at the CNRS (National Center for Scientific Research), associate professor at the Paris School of Economics, and a fellow of the IZA (Institute for the Study of Labor) in Bonn...
...Hours worked in excess would he paid at overtime rates...
...After Chirac unexpectedly dissolved Parliament in the spring of 1997, legislative elections brought the Socialist Party (PS) back to power at the head of a left coalition...
...While economists agree on net figures, they disagree on what happened...
...So they reduced work time officially by four hours per week to get to thirty-five hours when it was really a reduction of two hours...
...From 2003 to 2006, the average workweek of a full-time employee in France increased by only 0.3 hours, compared to 0.4 in the fifteen (pre-expansion) members of the EU...
...Both unions and political leaders have refused to ask this question...
...How could the French accept a uniformly imposed reduction of the workweek, even if its aim was to reduce unemployment by creating jobs, and even if "the French work so little," as popular myth has it...
...When negotiations among the five major labor confederations and employers bogged down, a law was passed reducing the workweek to thirty-nine hours...
...Aubry II also instituted 1,600 annual work hours as a legal norm...
...France didn't follow suit...
...Unemployment decreased as the country experienced three of its four best years for job creation in the twentieth century...
...But what is myth and what is reality in the story of this controversial legislation...
...Prime Minister Lionel Jospin's government sought to negotiate the law's formulation with all the interested parties through a national conference on employment, wages, and work time in October 1997...
...Eighty-five percent of workers covered by the laws were in companies with more than two hundred employees, but barely 50 percent in companies with twenty to fifty employees, and 23 percent in those with twenty employees or fewer...
...It would thus be possible to reach thirty-five hours with an RTT that was substantially lower than 10 percent...
...Things began to change after the defeat of the Socialists in the legislative elections of 2002...
...Because RTT was not universally applied, these inequalities reinforced the notion that working more could bring in more, which is why some employees initially supportive of RTT grew hostile to it, although they are a minority...
...In some sectors—notably large supermarkets--managers saw their work time increase with no change in pay...
...If most companies didn't begin negotiations, MEDEF reckoned initially, the government would be forced to abandon or weaken the second phase...
...In the end, the Aubry laws produced neither a miracle (as proponents hoped) nor an apocalypse (as foes warned...
...Supporters of the thirty-five-hour week think that posing it challenges the policy as a whole while leaders of the right and the Patronat see it as a first step to increasing the number of public employees and as a challenge to subsidies granted to companies...
...This was set at 217 days for managerial employees with "genuine autonomy" in their work...
...Most agreements contained clauses providing for it...
...In fact, the thirtyfivehour law had merely brought the length of the workweek in France to the median level of these other EU countries (after years of stagnation...
...On the other hand, some Socialist decision makers always thought flexibility was key to the program's success...
...More generally, wage restraint created a gap between employees working officially thirtyfive hours and those working thirty-nine...
...They wanted to exclude "unproductive" breaks, holidays, and training periods...
...Overtime would be paid at a higher rate...
...All things considered, official statistics that purport to show a reduction of more than three hours in the workweek in France do not take into account the real figures...
...New Work Times Some employers' organizations and company heads began to target the definition of work time in their negotiations...
...The Fillon arrangements merely froze inequalities in the time and organization of work...
...It makes overtime less costly to employers than 34 DISSENT / Fall 2007 regular hours, while it yields more after taxes than regular hours...
...Research now allows us to provide a preliminary evaluation of its shorter-term results...
...Since the election, she has resolved her dilemma by implicitly adopting the right's anti-RTT vision...
...In short, the Socialists sought to legitimize the thirty-five-hour workweek by extensive parleying and hoped to give new impetus to collective bargaining...
...There has, however, been a slight increase in overtime hours...
...Then Aubry I delayed the actual definition of important matters such as "work time" itself, overtime hours, work time of salaried managers, part-time issues, and the minimum wage...
...Impacts The Aubry laws produced more than 2,000 pages of mandates and regulations, not counting collective-bargaining agreements...
...Most employers do not want to question arrangements that guarantee them more flexibility in the organization of work...
...The right used this language to its political advantage in the 2007 elections, and now the Fillon government proposes to undo further the thirty-five-hour week with a surprising arrangement...
...Aubry I" had two parts...
...Two "Aubry" laws were eventually passed (named after Martine Aubry, Jospin's minister of labor), They aimed to link legal reduction of work time to an economy-wide, national conversation to achieve it...
...France's economy resumed a cycle of rapid growth, nearly 4 percent annually, in late 1997...
...Its success depended, finally, on agreements that were to be negotiated relatively quickly...
...There is no evidence that most companies that adopted the thirty-five-hour week have gone back in a significant way on their agreements (the exceptions have received extensive media coverage...
...Aubry II tried to foreclose this by defining actual work time as "time during which the worker is at the employer's disposal and must conform to his orders without being able to take care of personal matters...
...Annual calculation of work time alDISSENT / Fall 2007 33 lowed companies to avoid overtime that was lucrative for employees in periods of strong demand...
...Most of the jobs were created under Aubry I, that is, the law that required a genuine reduction in working hours...
...This question probably cannot be answered...
...The cost of overtime hours was reduced...
...Overtime was now paid at only time and a quarter in companies with more than twenty employees and time plus 10 percent in those with less...
...Strict application of the thirty-five-hour laws lost much political relevance...
...It gives employers and employees a shared interest in reducing basic hourly pay and in declaring the largest number possible of false overtime hours...
...some employees may have lost as much as 30 percent of their monthly pay as a result...
...This system appealed particularly to companies with seasonal variations in sales...
...For instance, some supermarkets excluded three-minute breaks (on the hour) for cashiers from the calculation of time worked...
...It would have been easiest for employers to negotiate this kind of reorganization at the most decentralized level, that of company or division, but the weakness of French unions hindered this...
...As of late 1999, on the eve of the passage of Aubry II, 122 sectors of the economy and 30,000 companies employing about ten million workers had signed on to the thirty-five-hour week...
...Most research points to a net job gain of 300,000 to 350,000...
...Policy makers such as the finance minister, Dominique Strauss-Kahn (now nominated to be head of the International Monetary Fund) went from pessimism to euphoria...
...Consequently, Aubry I did not impose thirty-five hours immediately but laid out a two-stage process...
...Here, statistical evaluation is extremely difficult...
...At the same time, negotiations between unions and employers in other European states, sometimes pushed along by governments, led to a reduction in work time for about half the work force in countries such as Germany and the Netherlands...
...Incentive subsidies were replaced by permanent ones, conditioned only on the shift to thirty-five hours (or the annual 1,600 hours) and accords ratified by a vote of employees or unions...
...To what extent did they achieve their goals...
...But MEDEF soon saw many benefits in negotiating by sector in order to attenuate Aubry I and to influence the formulation of "Aubry II...
...In short, a company could stay at a thirty-nine-hour week (thirty-five hours plus four hours overtime) at no extra cost...
...However, the abolition of pay guarantees automatically implied that a minimumwage worker in a company that had adopted the thirty-five-hour week might earn 11 percent less than one working thirty-nine hours...
...Theoretically, a managerial employee could work more than 2,800 hours a year and be officially at thirty-five hours a week...
...So thirtyeight or even forty-three hours of work could become "equivalent" to thirty-five hours actually worked...
...Consequently, the law modified the rules of labor representation...
...There was no required method of counting hours or establishing the number of jobs created...
...Although the thirty-five-hour week did not necessarily have a major impact on employment and the total length of time worked, its implementation allowed many companies to modify working hours and introduce more flexible organization...
...It would be legitimate to wonder if these billions might have been better spent in developing public services...
...A unique Socialist program will thus be pushed aside by Fillon's novel device...
...Should quick agreements be the priority or current wage levels...
...A fifth week of paid vacation was also granted...
...Hotel and restaurant employees ratified a system of "equivalent hours," which took into account time spent waiting for customers...
...A new conservative government adopted MEDEF's line and blamed the Aubry laws for economic slowdown after 2001...
...Studies also show that this came with an increase in inequality among wage earners: between those of different professional categories, social status, and age, and between companies and economic sectors...
...France has the lowest rate of private sector unionization (5 percent) in the Organization for Economic Co-operation and Development...
...It aimed to encourage 10 percent voluntary reductions of hours worked (and the creation of jobs in proportion to the reductions) through government incentives to companies, such as a statefinanced reduction in social insurance contributions...
...The "Fillon adjustments" passed in 2003 and 2004 maintained the legal limit of thirty-five hours but abolished the incentive mechanism of the Aubry laws...
...Once again, the French figures need to be compared to the rest of Europe...
...Employers' representatives also sought to limit the number of managerial employees covered by RTT...
...It was an ambitious approach, because large sectors of the French economy are not unionized...
...Small companies would be granted special dispensation (two extra years 30 DISSENT / Fall 2007 to reach the goal), and financial incentives would be provided to companies that negotiated a reduction in work time on their own...
...Employees will no longer pay taxes on overtime, and employers will pay practically no social insurance contributions on that pay...
...They created a moderate number of jobs and did not interfere with the competitiveness of companies...
...Without state subsidies, companies would not have reduced working hours in advance of the law...
...Nicolas Sarkozy was elected president last spring with a clear program: "Work more to earn more...
...The process met with some success, but unemployment persisted...
...The left, back in opposition, was on the defensive, although most of the polarized debate with the right had little to do with the reality of the thirty-five-hour week...
...This would enable both labor unions and employers' organizations to shape its content and eventual implementation...
...The statutory number of overtime hours was increased to 220...
...By the 1990s, the idea of RTT returned in order to address persistent mass unemployment...
...The Socialist government wanted to encourage companies to reduce work hours by 10 percent and increase the number of employees by 6 percent before legal deadlines were set by granting financial subsidies...
...Research suggests that "flexibility" was intended to compensate employers for the reduction in work time...
...The right even dusted off an old Petainist argument...
...The End of RTT The Aubry laws illustrate an important aspect of French economic life: the lack of unions able and strong enough to conduct innovative negotiations...
...First, it set the legal limit of the workweek in the private sector at thirty-five hours, to begin on January 1, 2000, for companies with more than twenty employees (two years later for others...
...Shorter working time was to compensate for work-time flexibility (that is, for fluctuating, irregular, and unpredictable schedules and long working days...
...This was done by one out of five of the companies that adopted the thirty-five-hour week to receive subsidies provided under Aubry I. Another provision provided that an employee "mandated" by a union organization could negotiate and sign an agreement...
...The main employers' organization actively opposed the proposed law...
...If the effort to attain a thirty-five-hour week had been carried out fully, state subsidies to companies would have amounted to sixteen billion euros in 2006 for about 400,000 jobs created, or about 40,000 euros annually for each job...
...Estimates of base pay show that the monthly wage bill in companies that adopted the RTT grew more slowly by one point compared to similar companies of identical size and sector...
...The government began to accept modifications of it...
...Were the new jobs due to the reduction in work time as such, to reduction of labor costs, or to increased flexibility...
...But the 1997 conference didn't achieve a consensus...
...Most small companies have no union delegations at all...
...Statistics published by the European Labor Force Survey make it possible to compare working time in different European countries 32 DISSENT / Fall 2007 on a common basis...
...If the total equaled 1,600 annually, workers would receive no overtime pay...
...The goal was a thirty-five-hour law within the next year...
...Decreases in social-insurance contributions by companies were no longer linked to a reduction in working time...
...In companies adopting yearly measurements, the employer could ask workers to work fewer hours some weeks (say, thirty) and more other weeks (say, forty...
...Socialist ministers focused on youth employment (under age twenty-five) and returned to the idea of RTT...
...In exchange for four hours of free time, employees must agree either to a near freeze of wages for several years or to greater flexibility of work in the company" (Liberation, February 2, 1998...
...It seemed anomalous, especially given the constraints imposed by globalization...
...The right has won a real ideological victory on work—a central historical theme of the left...
...With a constant method of calculation, the average reduction in the length of the workweek was in the end only 5 percent to 6 percent (about two hours a week) instead of the 11 percent (four hours) expected by the socialists...
...While Aubry II incorporated the main results of the nationwide negotiations, it also deleted provisions that imposed stringent conditions on companies for job numbers and actual RTT...
...and if working hours had not been reduced, wage earners would not have accepted increased flexibility...
...The law allowed for agreements by collective bargaining that calculated the number of days worked (rather than hours...
...Two Laws, One Principle Following the left's electoral victory in 1981, President François Mitterrand aimed to expand DISSENT / Fall 2007 29 employment by making la reduction du temps de travail (RTT, reduction of work time) a priority of labor policy...
...She could have pointed out that the French work as much as the Swedes, despite those laws...
...President Jacques Chirac's conservative government, headed by Prime Minister Alain Juppe, sought to reduce it with the "Robien" law in June 1996 (named for conservative parliamentarian Gilles Robien...
...Incentives were offered to promote bargaining in advance of the formalities of the second law...
...THE SOCIALIST government did not anticipate that RTT would create inequalities...
...When workers and office employees, in particular, are confronted with flexible working hours, they tend to experience worsening working conditions...
...In 2003, nearly 60 percent of private sector workers were in companies with a thirty-five-hour week...
...Moreover, the actual decrease in their working time was significantly less than four hours a week at the same time that flexibility was imposed upon them...
...The Socialists passed their first law in June 1998...
...The reduced workweek was also presented as a way for companies to improve their performance by making work time more "flexible...
...This turned out to be inadequate because it still allowed corporations considerable leeway to circumvent the law's aims...
...This revived a principle from the Socialist-led Popular Front of 1936 (the issue then was a forty-hour week...
...From 1983 on, the only factor reducing work time was increased part-time labor...
...There was union unanimity in favor of a nominal increase in the minimum hourly wage...
Vol. 54 • September 2007 • No. 4
