Worker Participation Rate

A striking feature of progressive thought is the divergence of views regarding the desirable level of employment — what is here called the worker participation rate.

For some thinkers, work is an abomination that should be suffered by no-one, while for others it is a wondrous opportunity that should be shared by all.1

Murray Bookchin is in the first category. In Post-Scarcity Anarchism he praised the Dadaists, “those magnificent madmen”, for demanding “unemployment for everybody”.2

However, E.F. Schumacher held precisely the opposite view. In Small is Beautiful he summarized the Buddhist perspective on work and then commented:

…to strive for leisure as an alternative to work would be considered a complete misunderstanding of one of the basic truths of human existence, namely that work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure.3

For ENL the question must be settled according to its principles. We must therefore ask: What worker participation rate will maximize aggregate health?

The answer to this follows from the shape of the labor cost curve, which slopes upward, reflecting the increasing levels of stress, injuries, deaths, etc. that accompany a longer work-day.

With a rising cost curve, a greater number of workers will always result in higher aggregate health when output quantity is kept constant.

This can be illustrated with reference to the following figure, where labor cost is depicted as a straight line for simplicity.

Worker participation rate
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Because the labor cost curve slopes upward, total labor cost decreases as the number of workers increases. The correct worker participation rate is therefore the maximum feasible rate.

Assume that twenty workers are currently employed, and that each produces a quantity of Q1, with a work-day of corresponding length. Each worker thus incurs a labor cost of –400 + 400 = 0, for a total labor cost of zero among the work force.

Now assume that twenty more workers are allocated to the production of the same total quantity. Each worker thus produces a quantity of Q2, which corresponds to a work-day that is half the initial length, with a labor cost of –400. In this situation, positive labor cost is not incurred by any worker.

The total labor cost among the work force is now 40 * –400 = –16,000. A minus cost is a health gain, so this represents a substantial increase in total health.

As you can see by looking at the graph, or by doing a little more arithmetic, this total continues to increase as more workers are allocated to the same production task.

This leads to a general conclusion: with continuously rising labor cost, aggregate health from labor is maximized when the worker participation rate is maximized for a given quantity of work.

There are of course practical limits to the number of workers that can be fruitfully engaged in any production process, based on technical requirements, space considerations, etc., but within these limits we should always strive to engage as many workers as possible.

On analytical grounds ENL therefore sides with Schumacher, rather than Bookchin and those mad Dadaists, regarding the “employment” issue.

There is a catch, however. If we consider individual workers rather than the social aggregate, the participation rate should increase only until labor cost decreases to zero.

In the example depicted, this would mean allocating 40 workers, but no more. Any additional workers would increase total health, but would also decrease the health of those already employed. In a sense, the new workers would be “stealing” good work from existing workers. Although this is socially fair — healthful work should be shared — it could create resentment among the existing workers.

A similar conflict arises in relation to crowding.

It thus becomes clear that the opposition of interests between individuals and their society is to some degree an inescapable feature of collective life, and does not necessarily signal defective social arrangements.

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