When I was an undergraduate at CCNY in the late 1960s I had an opportunity to work with the late Professor John Neulinger who had a grant to study leisure and was writing a book on leisure. He believed that human civilization was on the road to becoming a leisure based society where modern technology and science would free the average person from work and concern about providing for subsistence needs. Boy- Did he miss the mark. Instead of expanding, leisure time is rapidly becoming extinct as America workers work longer hours with less time off.
Consider this curious fact from Schor (1991), since 1948 the level of productivity of the U.S. worker has more than doubled. This means that the average worker could do their job in half the time as the 1948 employee and produce the same goods and services. This would suggest that Professor Neulinger was right; a 4-hour work day and lots of leisure time. But it did not happen. Instead management demanded that their employees do the work of two 1948 employees and executives and their stockholders got rich. What happened to the employees that were bounced out of their jobs? They had plenty of time on their hands but it wasn't leisure time.
The reduction of the work force led to change in the hours of work. It was during the late 1970s that a trend toward a decline in work hours ended. From the early 1900s to the 1970s (except during the Second World War), the numbers of hours worked per week declined for most Americans. But in the late 1970s the share of employees working more than 40 hours per week began to increase. Those working 50 hour weeks also increased, 25-to-64-year-olds who worked 50 or more hours per week rose from 14.7 percent in 1980 to 18.5 percent in 2001, and continued to climb. In 2007, employees worked a half a day more each week than they did in 2002, and a day more than they did a decade ago. In 2010 American employees worked longer hours than any time since the industrial revolution. In addition, one-third of American employees did not take their 10 days of paid vacation offered by their company, leading to a vacation-deprived workforce (HR.com, 2006). According to Bauerlein and Jafffery (2011), Americans now put in an average of 122 more hours per year than Brits, and 378 hours (nearly 10 weeks!) more than Germans. The differential isn't solely accounted for by longer hours. Almost all countries maintain that weekends off, paid vacation time and paid maternity leave are a right, not the U.S. (The only other countries that don't mandate paid time off for new moms are Papua New Guinea, Sierra Leone, Liberia, Samoa, and Swaziland, America is in good company). While most American corporations offer maternity leave, many do not offer paid leave and the 1993 Family and Medical Leave Act has so many restrictions it is considered worthless.
In the digitalized dispersed workplace employee presence is required to constantly monitor the many tasks they must perform. For these workers, besides long hours on-the-job, working at home at night, on weekends or during vacation time, on a BlackBerry or iPhone is a requirement. For traveling managers the airport, plane and hotel was once time away from the office, now there is no escape, the office follows them wherever they go. Given the global economy CEOs expect employees to be working around the clock. "We are now a 24/7 company." This was actually stated by the CEO of UBS, the global investment bank with 37 percent of its 64,617 employees in the U.S., he said this six months before he announced plans to terminate 8,700 employees at the end of 2010. Those who remained got brand new BlackBerrys.
By reducing the workforce, leisure has become nonexistent for most American workers who now work 200 hours a month and this excludes travel time to and from work which can tack on an additional 60 to 80 hours a month. Some workers work 300 hours a month and there are some who spend 100 hours/month in their car.
Contrast employment in America with France. In France, hours worked per week are fixed at 35 by law. If one works overtime pay is typically fixed by collective agreement, but also law requires that employees who work overtime must be paid with at least an extra 10 percent an hour. In the case of no other collective agreement, overtime is paid at an extra 25 percent an hour for the first eight hours and then at an extra 50 percent an hour. The 35-hour week has led many companies to be a lot more flexible about working hours. Some have implemented an 8 hour per day schedule with Friday afternoon off, whereas others make 10:00 a.m. to 4:00 p.m. required time at work and leave individuals to organize the rest of their time. Managerial jobs have always tended to be more flexible, with people often starting later in the day (10 AM or later), longer lunches and then finishing 8:00 p.m. All employees are entitled to two and a half days of paid leave per month worked. This amounts to a month of vacation every year. Italians get more, 45 days. But not Americans. They rank woefully last of all industrialized nations with an average of seven days, as few employees take their entitled vacation time of 10 days. If American workers are given a day off, they are so intimidated that they would most likely show up for work. Saulny and Brown, (2009) report that "Employees who were "furloughed' during the 2008 financial crisis came to work even when they were forced to take days off with no pay"because they fear for the long-term safety of their position and hope self-sacrifice impresses the management."
Unlike Americans, French employees fight for their work week and time off. French President Sarkozy and other politicians know that corporate CEOs in Europe work between 48 and 68 hours a week, and it infuriates them that their employees work a 35-hour week. When Sarkozy wanted to increase the work week and made it clear he favored the American approach, in response over a million of France's workers took to the streets in protest. But not in America; the workforce is so intimidated that they suffer quietly, put in their 60 to 70 hours a week and often are willing to give up their vacation or even work for free. It is not devotion to work that keeps Americans glued to the workplace, it is downright fear. CEOs love the American way. They almost get two employees for the price of one.
How did this happen?
In the late 1970s seven important strategies were promoted by business school educators and business writers. B-school students who went on to lead our corporations learned the following:
1. I was teaching Business Strategy in Fordham's MBA program in the early 1980s that I first noticed terminations as a business strategy in a textbook. Downsizing as it was called soon appeared in all business schools' strategy textbooks and accepted as sound business practice. MBA grads moved into executive suites at the turn of the century and got one employee to do the work of two and in the process ruined the lives of millions of hard working Americans. The use of layoffs as a strategy to boost earnings meant that terminations as a strategy went from being a CEOs decision of last resort to one of first resort (Uchitelle, 2006). It was given wording that neatly fit into the managerial glossary, with the popularization of words and phrases like downsizing, restructuring, reorganizing, transformation, reengineering, redesign, cost-cutting, rightsizing, staff cuts, early retirement, cost reduction, managed redundancy, and my favorite "lean and mean."
2. In the late 1980s human resource departments across America embraced two significant methodologies they learned in B-school. One, they accepted the concept of "human capital accounting" where employees were now treated as a "resource" and HR began to look more like finance departments. This resulted in employees being treated in a manner similar to a desk or computer, nothing more than a resource. Secondly, they introduced complex performance review systems. Employees were now working under constant surveillance and intimidation and they had little choice but to accept the long hours demanded of them. As Peter Block states " Performance appraisal is that occasion when once a year you find out who claims sovereignty over you." Performance review quickly became the instrument that destroyed commitment and kept the employee doing the work of two.
3. The employer/employee compact ended. No longer could an employee expect the security of staying with a company for his or her career and to be taken care of after retirement. Defined pension plans were gone and benefits were slashed. CEOs bought into the "lean and mean" metaphor, promoted by consultants and business writers. Strategies were put forth that suggested it was optimal to have a flexible workforce, expanding in good times, contracting in bad. Essentially, it meant one could reduce the work force and get those who remained behind to work harder, longer hours.
4. It was no longer considered good management practice to balance the interests of the shareholder-management-employee triangle. Executives were taught to focus on a single objective, the shareholder. They were motivated to maximize profit, and the "bottom line" became a popular metaphor used by executives. According to CEO Thomas Wilson, Allstate's corporate mission was clear: "Our obligation is to earn a return for our shareholders" (DiCello, 2008). Employees and the insured (customers) are not mentioned. Allstate lost $620 billion in the second quarter 2011.
5. An increased emphasis on mathematical and statistical modeling entered business school curriculum. During the early 1970's, business school deans, in their zeal to build their schools and seek favor among the science community, rushed to hire Nobel Laureates and in doing so added applied mathematical modeling to an ever-increasing array of financial and business problems. Decision analysis and decision modeling became widespread, assisted by sophisticated computer technology. Consequently, critical thought and diagnosis were virtually removed from the B-school curriculum in favor of an approach that emphasized formulation and implementation in the so-called decision sciences.
6. Professors of economics and finance climbed to central positions in business schools and substituted the words of "self interest" and "incentive to profit" for "greed." The Ronald Reagan concept of "trickle-down" economics prevailed, and promoted the belief that allowing the wealthy to "have more" would be good for the economy, and if the rich got richer, their wealth would benefit the lower classes. In the face of such odds, more of the nation's pool of talented students decided there was no point in becoming a doctor or an engineer, when one could be a banker. During the heyday of business school growth, 1970 to 1990, Harvard graduates who entered finance career jumped from 5 to 15 percent, while those going into law and medicine fell from 39 to 30 percent (Goldin and Katz, 1999). These MBA grads entered banking and corporate caverns in droves and we all know what happened.