Fair distribution of work

In most countries, there is legislation to ensure a fair distribution of work and rate of pay. The legislation can cover the following:

a) Number of hours worked in a week
b) Minimum wage

Take a country with a work week of (say) 40 hours and a real unemployment rate that is close to 10 percent. The official unemployment rate is usually lower, as many unemployed people are not captured in the statistics.

The unemployment rate can be reduced by legislating a work week of 36 hours. This will require employers to employ 10% more workers and give work opportunity to the unemployed workers.

To keep business cost at a competitive level, the wages of employed people working 36 hours a week should be 10% lower than before (when they work 40 hours a week).

It is difficult to cut the monthly salary of workers. But, if they are on an hourly rate, the adjustment is automatic. To create a flexible work environment, we need to change to hourly rate of pay.

Some employers will find it necessary to get their employees to work longer than the legislated work week. This can be allowed, but the employer should be required to pay a tax on the wages paid for the additional hours. This will give the incentive for the employer to employ other people, rather than ask the existing employees to work longer hours.

If the opportunity to work is fairly distributed to more people, we will have a better society. Most people can find work and get a wage that is sufficient to meet their cost of living. They will have more free time, due to the shorter work week. The free time can be converted into leisure activities and hobbies, and create opportunities for other supporting businesses to be developed. Some people can use their leisure time to do part time work and earn a supplementary income. This will create higher economic growth and a better quality of life.

Tan Kin Lian