In 1938 the Roosevelt Administration passed the Fair Labor Standards Act (FLSA) that established the 40-hour maximum work week, a national minimum wage, and time-and-a-half for overtime pay. The primary goal was to increase employment by spreading the available work among more people.
It was recognized by President Roosevelt and the Democrats that the massive unemployment of the Depression required the government to intervene. The private sector simply wasn’t capable of dealing with the massive economic downturn.
This FLSA landmark legislation was passed primarily to address the massive Depression Era unemployment. It was generally agreed that by lowering the number of hours worked per individual, it would give opportunities for new employment to additional unemployed Americans. Prior to this legislation, workers were subject to a work week of 60-80 hours. Using that logic, if one person was working 80 hours per week, their work could be divided and shared with an additional unemployed person and both would be employed for 40 hours a week.
The FLSA accomplished that goal and set the 40-hour standard we still have today. Currently the average full time worker puts in an average of 47 hours per week although a 40-hour week remains the standard.
We have been stuck with the 40-hour week and there has been little effort to reduce the number of hours worked per week since the 1938 legislation. Democrats under President Roosevelt successfully set that 40-hour standard nearly 80 years ago and now it must be updated based on the current economic reality. It’s past time to adjust that 40-hour standard and provide more employment opportunities today.
Thanks to President Obama, we have seen a strong, steady increase in employment since the 2008 recession. President Obama’s economic policies successfully brought unemployment down from a high of 10% in October 2009 to the current 4.3% today (a gift to Trump, now he’s taking credit for it).
Democrats are pushing for an increase in the minimum wage but more needs to be done. Reflecting on the success of the 1938 FLSA decrease in hours worked per week suggests hours should be further reduced today. That might seem like a radical approach, but we are facing a future economic upheaval unless we act.
It’s very popular to blame unfair trade for today’s loss of jobs, stagnant wages and the slow economic growth. But numerous studies identify automation as major cause for loss of jobs. A recent Ball State University study shows that between 2000-2010, 87% of manufacturing jobs were lost due to automation. Only 13% of job losses were caused by trade.
Predictions of future job replacement by robots is even more disturbing. Oxford University researchers estimate that, “47 percent of U.S. jobs could be automated within the next two decades.” An Obama Presidential report in January predicted that, “between 2.2 and 3.1 million car, bus, and truck driving jobs in the U.S. will be eliminated by the advent of self-driving vehicles.”
Andrew Yang, the founder and CEO of Venture for America, predicts, “Self-driving cars are the most obvious job-destroying technology, but there are similar innovations ahead that will dislocate cashiers, fast food workers, customer service representatives, groundskeepers, and many others in a few short years.”
The rapidly growing online ecommerce is killing many brick-and-mortar stores and eliminating substantial employment with store closing. The future trends suggest ecommerce will continue to cannibalize traditional stores and negatively impact service jobs.
Stephen Hawking warns, “we are at the most dangerous moment in the development of humanity, and that the rise of artificial intelligence, is likely to extend job destruction deep into the middle classes, with only the most caring, creative, or supervisory roles remaining.”
In the 1930s President Roosevelt and the Democrats boldly established the 40-hour maximum work week. No one could have predicted then that robots and automation would someday eliminate the need for workers spending 40-hours a week at a job. Today we face a future of massive unemployment unless we reduce everyone’s maximum work week.
Sam Hinkie, a former basketball GM, asks, “How are you preparing your kids for a life with 60% unemployment?”
There is a solution. Follow Roosevelt’s example and reduce the amount of work required per employee to 30-hours per week or less. It should be noted that the original 1932 draft of the FLSA law proposed 30-hours per week rather than 40. It was proposed by Senator Hugo Black, (he later was appointed to the U.S. Supreme Court). Senator Black’s 30-hour week passed the U.S. Senate 53-30 on April 6, 1933 by a vote of 53-30, but was blocked in the House. The revised bill passed in 1938 and set the maximum at 40-hours per week.
Roosevelt faced tough opposition from business for lowering the maximum work week to 40 hours. Today business would definitely oppose a 30-hour work week by claiming that paying the same 40-hour salary or wages for 30 hours of work would raise their labor expenses.
The answer to that criticism is to point to business productivity increases. Businesses have been gaining substantial productivity from automation and efficiency, yet wages and salaries haven’t increased accordingly. They have been getting a free ride at the expense of their workers. It’s time they shared their productivity gains with their employees. Businesses raised the same criticism in 1938, but they survived and prospered.
by Rick Smith