Changing labour supply composition and the supply of work-life balance by employers

The growing number of women in the workforce and the domination of women of the graduate labour supply will increase the incentive of employers to make the workplace more family-friendly. Those that do not will lose access to the majority of graduate and other talent.

Various work place amenities can be traded-off in salary packages. In industries and occupations where this is cheap to do, the wage offset will be least. These industries and occupations will attract a large number of women because the net returns to them in cash wages plus amenities is higher than for men who value the greater work life balance less.

share-of-labor-force-with-part-time-jobs-women-men_chartbuilder

Occupational segregation around the clock illustrates the delicate trade-off between cash wages and the costs of flexible hours. Men and women work in much the same occupations between 8 and 6. There are big gaps if you are an early starter or work over dinner time.

Changing the production processes of these industries to induce more women to work unsocial hours would require large reduction in production and pay. Fewer women will not enter occupations with more unsocial hours unless they are paid more than in other jobs where it is cheaper to provide work-life balance and still pay higher cash wages.

Occupations and industries where family friendliness is more costly will be male dominated because women qualified enough to enter these occupations will go elsewhere where the cash wages sacrifice is less for work-life balance. Influxes of women will occur in industries where technological trends lower the cost of work-life amenities and the growing number of female skilled workers forces employers’ hands. They must adapt or lose out in competition for talent. The large influx of women into male dominated higher skilled occupations and professions suggests that some occupations can provide work-life balance at a lower cost than others.

% women age 25 to 54 working full-time in USA, UK, Canada, Germany, France, Italy, Australia, New Zealand, Ireland, Sweden, Norway and Denmark

To account for full-time work being 35 hours per week in some countries but 40 hours others I have included both in the chart below. Not many Dutch women work full-time.

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Data extracted on 11 Mar 2016 14:08 UTC (GMT) from OECD.Stat.

McDonald’s Workers Just Lovin’ Their #ZeroHoursContracts @suemoroney @IainLG @FairnessNZ

Revealed preference rules. Not only do about half of unemployed turned down offers of zero hour contract jobs, those that switch from a zero hours contract to minimum hours are not much different from the number of people in these type of jobs who would be quitting to another job anyway.

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Source: McDonald’s Workers Are Just Lovin’ Their Zero Hours Contracts – Forbes and McDonald’s offer staff the chance to get off zero-hours contracts | UK news | The Guardian.

% female employees aged 25 to 54 working 40 or more hours per week across the OECD

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Data extracted on 11 Mar 2016 14:08 UTC (GMT) from OECD.Stat.

British full-time gender wage gap by age band

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Source: What is the Gender Pay Gap? | Visual.ONS.

Distribution of the male American, British and German number of working hours

Few men work part-time. Many that do are teenagers. Two-thirds of male workers in America, Britain and Germany work at least 40 hours a week and another quarter worked 35 to 40 hours a week except in the USA. A surprising number of Americans, 11%, worked 20 to 29 hours. If they work that 30th hour, the employer must provide them with health insurance under Obamacare.

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Source: OECD Family Database.

Just testified before a parliamentary committee on zero hours contracts

My submission to the Transport and Industrial Relations Committee today on the Employment Standards Bill is there should be no regulation of zero hours contracts:

  1. Workers sign these contracts because they are to their net advantage;

  2. Always knowing your working hours in advance is known only to about 30% of shift workers; and

  3. Workers command a wage premium when they sign zero hours contracts.

The obvious question is why do jobseekers sign a zero hours contract if it is not in their interests? Most of all, why would a worker who already has a job quit to work on a zero hours contract unless it is to their advantage?

If zero hours contracts are oppressive, the only workers hired on them would be the unemployed. Anyone who has a job would refuse such offers. Those unemployed that do sign a zero hours contract would quit as soon as a better offer comes along. 50% of job offers to British welfare beneficiaries to work on a zero hours contract are turned down.

This frequent refusal of zero hours contracts not only suggests there are options for jobseekers including the unemployed but there are costs to employers. The most likely employer response to reduce these costs of rejection is a offer to pay more to sign a zero hours contract. Everyone in this room knows contractors who work in much more than those in regular employment.

Unless labour markets are highly uncompetitive with employers having massive power over employees, employers should have to pay a wage premium if zero-hour contracts are a hassle for workers. It is standard for unusual, irregular or casual work to come with a wage premium. If you want regular hours, fixed hours, that comes at a price – a lower wage per hour.

Zero hours contracts is creative destruction in the labour market. Plenty of new ways of working have emerged in recent years: the proliferation of part-time work, temporary workers, leased workers, working from home, teleworking and contracting. Employment laws  rest on the now decaying assumption that workers have long, stable relationships with single employers.

At least a quarter of a million New Zealanders already work shifts often with little notice of changes. Work schedules are always known in advance only to 31% of temporary, seasonal and casual employees. Another quarter of these have about two weeks or more notice of shifts. Hundreds of thousands of New Zealand workers freely sign on for variable hours.

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Source: Survey of Working Life December Quarter 2012, Statistics New Zealand, Table 13.

Something new and innovative such a zero hours contract should not be regulated because it is not well understood. Zero hours contracts don’t come cheap for employers because of the risk of job offer rejection. There must be offsetting advantages that allow this practice to survive in competition with other ways of hiring a cost competitive labour force.

The fixed costs of recruitment and training are such that one 40-hour worker is cheaper than hiring and training two 20-hour workers. Zero hour contracts would be most likely in jobs with low recruitment costs, few specialised training needs and highly variable customer flows.

This business variability can be borne by the employer with the worker on regular hours but paid less. The alternative is the employee shares this risk with a wage premium for their troubles.

Workers with low fixed costs of working at different times profit from a move onto zero-hours contracts. Those with higher fixed costs of changing their working hours will stay on lower hourly rates but more certain working times

To summarise my points today:

  1. workers sign zero hours contracts because they are to their advantage to do so;

  2. Advance notice of working hours is not as common as people think for shift workers; and

  3. Irregular and unusual working arrangements usually command a wage premium.

Employers must pay a wage premium to induce in workers to sign zero hours contracts. This Bill undermines the right of workers to seek those higher wages. Thanks for your time and attention.

New Zealand gender wage gap for full-time workers and for part-time workers, 2015

The unadjusted gender wage gap is regarded as a reliable measure of sex discrimination in these day, apparently, because the adjusted wage gap is too small to maintain the rage. In the data below, the gender wage gap is in favour of women. That is an unreliable unadjusted gender wage because many part-time male workers are teenagers. Many part-time female workers are professionals.

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Source: Statistics New Zealand, New Zealand Income Survey, June quarter 2015

Employment patterns of couples differential with families differ greatly across the OECD

Another gender wage gap that dare not speak its name

via There Are Only Three Kinds of Jobs Where Women Earn More Than Men — The Atlantic.

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