SUNS4503 Monday 6 September 1999

Labour: Steady rise in hours at work by US workers

Geneva, 6 Sep (Chakravarthi Raghavan) -- Workers in the United States put in the longest hours (among industrialized nations) on the job, nearly 2000 hours per capita in 1997, and in the period from 1980, the annual working hours in the US has been steadily rising.

It was 1883.4 hours in 1980, jumping to 1942.6 in 1990 and 1996 hours in 1997 - a period that marked end of post-war Keynesian economics and unleashing of the reverse class war and attack on organized labour, with the rise of neo-liberalism under President Reagon and successors.

In contrast, in Japan, workers in 1980 clocked an annual per capita 2121 hours per year, declined to 2031 hours in 1990, and 1889 hours in 1995 (year for which latest data is available). The US workers in that year clocked 1952.6 hours.

Canadian workers also saw their work schedules decline by more than a full work week during the last decades - with 1732 hours in 1996 compared to 1784 in 1980s. These and other data are in a new statistical study of global labour trends,"Key Indicators of the Labour Market 1999", published by the International Labour Office.

The KILM project is the result of collaboration of ILO, OECD and several national and international agencies. The study draws also on data from the UN Statistical division, the World Bank, the EU's Statistical Office and the US Bureau of Labour statistics.

"The number of hours worked," comments ILO Director-General Juan Somavia, is one indicator of a country's overall quality of life."

But, "while the benefits of hard work are clear, working more is not the same as working better," he said. But other factors including productivity, compensation, unemployment, levels of technology, social benefits, job security and cultural attitudes to work and leisure need to be considered for any meaningful analysis of working time, he said.

"And there is a widespread tendency to under-estimate and under- value the working time of women."

The KILM project, he adds, aims among others to provide an up-to- date statistical profile of world-wide employment trends so that the full range of social and economic consequences of different labour market operations can be examined.

As in other areas, the data is more detailed and available for the industrialized nations grouped in the OECD, but is clearly of varying quality and reliability across countries and over time periods.

The 598-page publication is priced at Swiss Frank 140 (also available on CD-Rom) and on ILO's web pages on internet, provides valuable reference data, despite gaps in data collection across countries and over the years (some by actual recorded data, and others through sample survey and estimations) that make comparisons difficult.

The ILO publication provides information on key indicators under 18 heads: labour force participation rate, employment to total population ratio, status in employment, employment by sector, part-time workers, hours of work, urban informal sector employment, unemployment, youth unemployment, long-term unemployment, unemployment by educational attainment, time- related under-employment, inactivity rate, educational attainment and illiteracy, real manufacturing wage indices, hourly compensation costs, labour productivity and unit labour costs, poverty and income distribution.

Somavia said he hoped the volume, containing comparative data from 240 countries and territories would provide a valued reference in the "search for equity and efficiency in the world of work."

One of the KLIM indicators relates to poverty and income distribution - data intended to capture different aspects and dimensions of poverty and inequality. The data relate to personal expenditure, personal consumption expenditure or personal incomes of different individuals or households in a particular year or a
series of years. Poverty measures include estimates of percentage of population whose consumption/expenditure/income fall below a prescribed level. Direct measures of inequality as the Gini index look at cumulative distribution of income or consumption and estimate deviation from perfect equality norm.

While data relating to poverty cover some 106 countries, while data on a standardized $14.40 per day poverty line is available for 16 developed countries, while estimates of percentage of population below a national poverty line is available for 35 countries for at least one of the years in 1990s. Virtually all countries with poverty data, comments the ILO in the chapter on this indicator, are developing nations - reflecting the fact that significant parts of the population of industrialized countries are not afflicted by poverty.

However, the data for this indicator are such that "they cannot be used to make international comparisons," says the ILO. But estimates based on international poverty lines of $1 and $2 a day, using 1995 purchasing power parity are available for 51 countries for at least one year in the 1990s, but a significant number of countries across regions don't have recent estimates.

Given this limited data availability, says ILO, it is not possible to build complete regional pictures for comparison. But the World Bankis likely to prepare and provide figures on the basis of estimates of international poverty lines in future annual World Development Indicators, ILO adds.

But gini index data are more easily available for at least one year in the 1990s for 77 countries from all parts of the world.

From the data available, it appears that poverty percentages are generally higher in rural areas. In nine countries, severe (below $1 a day) poverty proportions exceed half, while severe to moderate exceeds three-quarters in 11 countries.

There are considerable disparities in average income and consumption levels, and such inequalities exist in particular in south-eastern Asia, Latin America and Caribbean and sub-Saharan Africa.

But the contrast between the industrialized, transition, and the industrializing and other developing countries shows the accentuating divide (over the last two decades of globalization) among them, and the longer distance and time needed to bring about equity and efficiency in the world of work globally.

While the hours at work, in the industrialized world (and contrasts within it) provide one vignette, at the other end, where much of the data is based on surveys and estimations, informal sector employment which is an integral part of the employment scene in developing countries, shows that of 42 countries studied, thirteen registered informal urban employment rates of 50% and above compared to total urban employment.

The 13 included nine in Africa (Cameroon, Cote d'Ivoire, Gambia, Ghana, Kenya, Madagascar, Mali, Tanzania and Uganda), three in Latin America (Bolivia, Colombia and Peru) and one in Asia - Pakistan.

The highest level of informal sector activity, more than 70 percent, were recorded in Gambia, Ghana, Mali and Uganda.

The long working hours of workers in the US (rising trend) and Japan (declining trend) is in sharp contrast with those of European workers, who are progressively working fewer hours on the job.

This is most evident in the Scandinavian countries, where the hours worked in 1997 were respectively 1399 and 1552 in Norway and Sweden.
In France, where legislation has been introduced recently limiting the work week to 35 hours, men and women put in 1656 hours in 1986 compared to 1810 in the 1980s.

In Germany (western), the annual working hours amounted to just under 1560 in 1996 as against 1610 in 1990 and 1742 in 1980.

Workers in the UK, logged in 1731 hours in 1997, but on average have neither lost nor gain much free time since 1980 when they worked 1775 hours. The annual hours of Irish workers dropped from 1728 in 1980 to 1656 in 1996 - on a part roughly with Switzerland (1643 hours), Denmark (1689 for male workers in 1994) and Netherlands (1679 for male workers in 1994).

In Australia men and women logged slightly longer hours than their counterparts in New Zealand in 1996 -- 1867 versus 1838.

Data of annual hours worked per person for developing countries is much less available, and trends are not so easily identifiable, says ILO.

But among the rapidly industrialized regions, East Asia had the longest hours of work with Hong Kong China, Bangladesh, Sri Lanka, Malaysia, Singapore and Thailand all reporting between 2200 to 2300 hours per year. The data relate to pre-1995, prior to the financial crisis that hit the region in 1997.

Figures for Korea show a steady decline from 1980 levels -- of 2064 hours a year in 1980 and now down to 1892 in 1996.

In Latin America and the Caribbean, workers clock in between 1800 to 2000 hours a year, with only modest declines from 1980 levels.

The data on productivity shows that despite the divergence in working hours among the industrialized nations, the major industrialized nations are seeing convergence on the labour productivity front, says Lawrence Jeff Johnson, the ILO labour economist who directed the project.
Comparing the productivity data, Johnson notes that currently the US worker works more hours than his or her counterpart in other industrialized nations, but also leads the way in terms of productivity.

In 1996, the US outpaced Japan by nearly $10,000 value added per person employed, and $9 value added per hour worked, but in recently Japan has been rapidly closing the gap.

"The productivity race is like a never-ending marathon in which the US worker today is ahead of the pack, but a significant number of competitors -- Japan, South Korea and major European countries -- are picking up speed with the US in their sights."

Labour productivity growth is arrived at by dividing a country's gdp by the number of people employed to estimate the averageoutput per worker. But it does not into account other possible factors -- such as access to technology and capital.

If these are factored in, perhaps a different picture across the globe may emerge -- as in the case of per capita GNP data based on purchasing power parity. But without data this is in the range of speculation.

Labour productivity growth in western Europe, the publication shows, has been increasing at a faster rate than in the US (22 percentage points). Asia, excluding Japan, shows a better catch- up performance than advanced countries. Between 1980 and 1997, productivity growth in Asia was about two percentage points faster than for advanced countries, and the productivity gap relative to that of the US has declined by five percentage
points.

In the developing world, Thailand's labour productivity growth rose between 1980-1997 - with value added per person employed rising by 141 percentage points.

On the basis of value added per person measurement, the productivity growth in the Philippines shrank from 100 in 1980 to 84 in 1995; Indonesia's rose by 49 points between 1980-95; Hong Kong's by 91 points over 1980-96, while Taiwan's grew by 120 points in the same period.

Elsewhere in Asia, India's was up 64 points in 1995 and Sri Lanka's 58 in the same year.

Among other developing regions, the ILO report says, Latin America showed very little productivity improvement over the past two decades -with the notable exception of Chile and Colombia both of which saw more than a 20 point increase between 1980 and 1996.

On average, the Latin American region as a whole saw a slight decline in productivity over the period, with that of Brazil virtually unchanged since the 1980.

The indicators show also the world-wide trend of employment shifting from goods production (agriculture and industry) to services sectors.

This is most pronounced in developed countries and transition economies, but much less in sub-Saharan Africa and some Asian countries. But with few exceptions, employment in agriculture is declining worldwide, while in the services sector in industrialized countries it accounts for at least half of total employment.

But through 1996 and 1997, unemployment rates have remained relatively high through much of the world; nearly one half of the countries studied show unemployment rates in excess of seven percent - with 14 of the 29 OECD countries registering a rate in excess of seven percent.

For most countries, women have higher unemployment rates than men. Only in sub-Saharan Africa, men's unemployment rates exceed those of women.

Wage trends are also diverse in much of the world. In major European countries, wage trends have been steady increasing; they have dropped or remain unchanged in the transition economies.

Wages in East and South-east Asia increased rapidly before the financial crisis of 1997, remained unchanged or declined in south-central Asia. Latin America had diverse trends, but sub- Saharan Africa registered steady downward trend.

As for participation of women in labour force, the lowest levels were in Latin America, the Caribbean, the Middle East and North Africa; the rates were highest in Scandinavia, a number of economies in transition and sub-Saharan Africa.

The ILO study found levels of female participation in the labour force varied widely from country to country, unlike the constant high level of male participation in all countries.

Cultural factors influence the level of women's participation in the labour force in many countries, says the KILM. In the Middle East and North Africa, for example, "the education of young women and women's work outside the home are often discouraged, owing to strict gender segregation based on concerns of religion and
marriageability." And in Latin America and the Caribbean, "cultural factors and high fertility play a large role in limiting women's economic opportunities."

The high female participation in the labour markets in sub- Saharan nations is a result of the crucial role women play in agriculture, while in the transition economies, women's high labour force participation reflects "a history of policies aimed at mobilising the working-age population for employment during the period of centrally controlled economies."