Wasted Time, Wasted Wealth

If we eliminate unneeded jobs, we could all work less and have time for the things we really want out of life

by J.W. Smith

One of the articles in It's About Time! (IC#37)
Winter 1994, Page 18
Copyright (c)1994, 1996 by Context Institute | To order this issue ...

We spend so much of our lives working, getting to work and back, looking for work, and preparing for work that we may feel too pressed to get to the other things that give life meaning.

What if it turned out that much of what we are spending our lives doing simply doesn't need to be done? What would you do with an extra 20 hours each week?

J.W. Smith, after decades of research, concludes that we could all work 2.3 days per week with no drop in our standard of living simply by eliminating unneeded work. IC can't vouch for all his numbers; estimates at the scale of the entire economy are difficult to make with accuracy and more research is clearly needed. But we found that once you start looking through this lens, you see all kinds of jobs that don't really need doing.

This article is adapted from his upcoming book: World's Wasted Wealth 2: Save Our Wealth, Save Our Environment, to be published by the Institute for Economic Democracy, Box 185, Cambria, CA 93428.

Industrialized societies are on a treadmill, seeming to produce more and more but gaining little, and at times even regressing in overall standards of living. The rest of the world also seems to be on a permanent treadmill, one of poverty. With technology becoming ever more efficient and productive, why is this?

This is a question I've studied for many decades. In 1953, not long after I began working for the railroad, I judged that half of the 1.3 million railroad workers were unnecessary. Looked at another way, 50 percent of our wages were only an honorable form of welfare.

Even this figure was underestimated. In 1990, hauling almost twice the freight, only 230,000 railroad employees remained and still the railroad labor force was shrinking rapidly. Railroad managers say they soon will operate with 100,000 workers, or 4 percent of the labor per ton-mile that was required 40 years ago.1

Since then I've found many authorities who describe the same waste and inefficiency in insurance, law, farming, communications, medicine, defense, and other sectors of the economy. The people employed within these industries are working industriously at jobs where well over 50 percent of their labor is expended unnecessarily. Yet these people are not malingering. They are performing what they believe to be productive and socially necessary tasks. This distribution of social production through unnecessary labor is the consequence of a now-integrated system that has evolved slowly over time; I call it a waste distribution system.

What dynamic is at work here? Each gain in industrial efficiency normally has three consequences: production rises; those who own the technology become wealthy; and the unneeded workers made redundant by the gains in efficiency lose not only their jobs but their moral claim to a share of production. It is the lack of sharing of productive work - and thus the lack of sharing of products and services - that leads to the evolution of waste distribution territories.

Through efficiency of technology, the industrial labor force is rapidly decreasing (witness the promised reduction of railroad employees from 1.3 million to 100,000 while freight tonnage doubles). When labor is cut from a production process, the share of production once claimed by this labor is then claimed by the owners of capital.

Typically, a portion of that production is then claimed by nonproductive labor, such as lawyers, brokers, public relations companies and so on. As the productive labor force contracts, this non-productive segment expands.

Both individually and as a group these workers defend their claim to being productive and filling a social need. Even when partly or wholly false, this claim must be made and defended; without it, the social rule - "no work, no pay" - would deny these people their share of social production.

Waste distribution territories thus evolve and expand, absorbing labor idled by technology. It is the collective need to survive that pushes this process along. People searching for their survival niche within the economy either move into a territory (job or business) vacated by another or carve out their own. It is only from within such an economic territory that one can claim a share of what society produces.

The defense of these waste distribution territories is based on natural alliances and loyalties generated by working together in a craft, business, or profession. The image of doing necessary and socially beneficial labor safeguards economic territories. To recognize that the work could be done with 50 to 80 percent less labor is to invite the elimination of one's job. Just as spice caravans crossing the territory of a desert sheik were forced to pay tribute, the entire economy is divided into economic territories where each craft, business, or profession demands a toll from all who pass its way. There is no consistent relationship between true production and income.

Studying what other economists, historians, and philosophers had to say about this phenomenon, I discovered many kindred spirits. Benjamin Franklin proposed 200 years ago that, if everyone worked productively, the workday need be only five hours long.2 That most observant of social critics, Thorstein Veblen, writing shortly after World War I, described "the apparatus and procedure for capturing and dividing the annual dividend as unduly costly . . . [it accounts for] something like one-half the work done."3 In 1923, British philosopher Bertrand Russell estimated the necessary daily labor at four hours.4

Today, Juliet Schor, associate professor of economics at Harvard University, points out that "We actually could have chosen the four-hour day. Or a working year of six months. Or every worker in the United States could now be taking every other year off from work - with pay."5

RECAPTURING WASTED TIME

The key is to eliminate the work that doesn't need to be done:

* Arms: Seymour Melman, professor of industrial engineering (emeritus) at Columbia University, made a career studying waste in the American economy. His startling conclusion was that America has wasted enough on arms alone in the last 40 years to completely rebuild twice every city, every car, every road - everything in the US.

* Insurance: Social Security is a trust fund to provide retirement for each American citizen. Social Security distribution costs are under one percent; 99 percent is returned to the insured. Private insurance, which collects $400 billion each year of Americans' money and holds it in trust returns, on average, less than 50 percent of these funds; over 50 percent are used for the operating costs and profits of the private insurance industry. Social Security, with its automatic deductions, requires a labor force of only 63,500 while private insurance has an army of 2.2 million workers; each are handling the same size trust fund. Going to an efficient single-payer insurance system would eliminate almost 2 million insurance workers and reduce insurance costs by half.

* Legal profession: In Washington state, a couple can get a divorce by simply applying and filling out the ready-made forms. Probate costs can be bypassed by putting all property into a living trust. In New Zealand, one cannot sue over an accident; all such disputes are settled by an Accident Compensation Board. In Florida, a legal clerk proved that if the forms are available, any literate person can handle uncontested divorces, adoptions, name changes, debt collections, tax matters, bankruptcies, real estate transactions, patents, wills, trusts, and many other common legal transactions. An analysis of the legal profession would likely conclude that 70 percent is wasted labor.

* Health care: With roughly equal health care, US citizens spend 38 percent more than Canadians, 39 percent more than the French, 53 percent more than Germans, 42 percent more than Swedes, 62 percent more than Italians, 78 percent more than Australians, 90 percent more than the Japanese, and 100 percent more than the British. 6

While these other countries are highly satisfied with their health care (as high as 87 percent) and all have access to this care, 70 percent of Americans are dissatisfied with theirs and many have no access to medical care. These excess costs are caused by unnecessary and overused surgical procedures and medications. Ninety percent of all illness can be cared for by trained screening personnel and only 10 percent require the care of a trained physician. If such wastes were eliminated and preventive medicine practiced, 70 percent of the labor in the health care industry could be eliminated.

* Pollution abatement: In studying the pollution problem, Newsweek reporter Gregg Easterbrook noted: "More than 80 percent of the $100 billion Superfund spending has gone to consultants and their lawyer kinsmen, who have a pecuniary interest in dragging the process out: to keep the meter running."7 The principle of claiming to be doing productive labor while producing little is in full force.

* Management: Professor Seymour Melman, Industrial Engineer at Columbia University (emeritus), has calculated that over 50 percent of the administrators of corporate America are unnecessary. They are there to intercept production, not to produce.8

* Government: The notorious government bureaucracy is the pet complaint of many. However, most is not government waste; it is private industry milking the public treasury. This was well outlined by William Greider in The Education of David Stockman and Other Americans. Stockman parroted the familiar line of government waste, yet noted that almost everyone he knew was working for the government and "protected from the dynamic risk-taking of the private economy."

Stockman and other conservatives meant not only the layers and layers of federal bureaucrats and liberal politicians who sustained open-ended growth of the central government, but also the less visible infrastructure of private interests that fed off of it and prospered - the law firms and lobbyists and trade associations ... the consulting firms and contractors ... the constituencies of special interests from schoolteachers to construction workers to failing businesses and multinational giants, all of whom came to Washington for money and legal protection against the perils of free competition.9

THE ARITHMETIC OF WASTE

In all, I've calculated that there are over 80 million people who are either unemployed or employed non-productively.

The 1989 labor force was approximately 125 million. To that we add those who are not officially part of the labor force, including street people, students over age 16, the functionally challenged, homemakers, and the unemployed, for a total of about 166 million in the labor force of an efficiently structured society. Allow 5 million between jobs, and that leaves 161 million available for work.

There are the equivalent of 114 million full-time jobs in America. We could eliminate a total of 37 million unnecessary jobs in insurance, law, transportation, agriculture, health care, the welfare system, education, and defense, along with excess managers and supervisors in other fields. The remaining 77 million jobs multiplied by a typical work week comes to about 374 million days of productive work per week, or 2.3 days work per week of paid employment for the 161 million available workers. And since only unnecessary work would be eliminated, there would be no drop in our standard of living.

If one wants to challenge any part of these calculations, study the unnecessary labor and intercepted wealth in real estate, the stock market, banking, and accounting. Also note the savings possible if retail sales were to take advantage of modern communication technology to eliminate a large share of the 1.9 workers that are distributing for every 1 producing. The total wasted labor in these sectors is too subjective to measure, but demonstrates the potential of lowering the workweek even further.

These savings are available even without addressing the practices of our throwaway society. Superfluous consumer products are sold only because of a "created need." Direct access through communication technology could bypass advertising, advertising labor, and impulse buying.

And if all that were not enough, a study by Theodore H. Barry, a management consulting firm, concluded that on average, only 4.4 hours of a typical employee's work day are used productively. 10

Eliminating unnecessary jobs and sharing the necessary ones adds no cost to society, and to the extent that wasted capital is saved, eliminating unnecessary jobs will reduce costs. A society is only as productive as all its citizens collectively.

Restructuring to an efficient society in which work is distributed evenly would mean saved labor, saved resources, reduced environmental pollution, and increased free time: a very high quality of life. Most important, that once-wasted labor and capital could now be turned to producing productive tools that would allow the world's impoverished to raise themselves out of poverty. s

Footnotes

1. "Change" Railway Age, Nov. 1984; Statistical Abstract of the US, 1980 & 1991, Charts 660 and 1065.

2. Lewis Mumford, Pentagon of Power (New York & London: Harcourt, Brace, Jovanovitch, 1970) p 152.

3. Thorstein Veblen, The Vested Interests (New York: B.W. Huebesch Inc., 1929) p 83.

4. Bertrand Russell, The Prospects of Industrial Civilization , 2nd Edition (London: George Allen & Unwin Ltd., 1959) p 40.

5. Juliet B. Schor, The Overworked American (New York: Basic Books, 1991) p 2.

6. Tom Shealy, "The United States vs The World: How We Score in Health," Prevention, May 1986, pp 69-71.

7. Greg Easterbrook, "Cleaning Up," Newsweek , July 24, 1989, p 37.

8. Seymour Melman, The Permanent War Economy (New York: Simon and Schuster, 1985) p 13

9. William Greider, The Education of David Stockman and Other Americans (New York: New American Library, 1986) p 6.

10. Barry Bluestone & Irving Bluestone, Negotiating the Future (New York: Basic Books, 1992) pp 7-8.

Please support this web site ... and thanks if you already are!