Regional Outlook : Europe Rethinks Job Sharing : Hard realities, such as 16 million unemployed, have forced EU nations to consider modified workweeks, flexibility.

By TYLER MARSHALL

Feb. 14, 1995 12 AM PT

TIMES STAFF WRITER

MALLE, Belgium —

At a factory in this small town a few miles east of Antwerp, Annemie Raeymaekers once assembled light fixtures five days a week. Then she opted for four.

Under a program offered by her employer, every Thursday since October has become an extra day off for Raeymaekers--a day for quality time with her two young children, for getting ahead on the housework and for handling chores that once made the weekends a rat race. She earns less but says it is worth it.

“I’ve got more time with the family,” she explained. “It’s better for me.”

It is also better for the young apprentice a few workbenches down at the factory, who owes her job to the fact that Raeymaekers and others at the plant decided to work shorter hours.

The larger question for economists and policy-makers, though, is if Raeymaekers’ four-day week will help Europe.

For many years, job-sharing ideas such as the four-day week were seen as academic pipe dreams. They looked good on paper but in practice were unwieldy, inefficient and too expensive, especially for a region such as Western Europe where labor costs are already among the world’s highest.

But some hard realities have led Western Europeans to think again--realities such as an army of more than 16 million jobless that refuses to shrink despite the latest economic upturn.

While unemployment has climbed throughout the industrialized world, the problem is especially acute in Western Europe, where inflexible unions, high wages and an immobile work force combine to squeeze out low-skilled jobs and prevent the creation of new ones.

For example, a recent study conducted for the Belgian Employers Federation found that 40% of those companies with a need to recruit new labor decided against the idea because the costs were too high.

By contrast, a more flexible labor pool and large numbers of lower-income service jobs have kept unemployment from climbing so high in the United States.

(The Paris-based Organization for Economic Cooperation and Development found that, between 1970 and 1992, as the U.S. economy created nearly 33 million new private-sector jobs, the economies of the European Union, with about the same population, managed 3 million.)

The jobless are not immediately evident to visitors in Europe. There are no bread lines or large-scale begging. Liberal welfare-state benefits cover the minimum comforts. But they do little to heal the emotional wounds suffered by those without work.

For governments too, the costs of unemployment are high.

Between 1980 and 1992, for example, spending on jobless benefits in the European Union rose by 61% in real terms.

Worried that cutting social benefits and wages could damage the welfare states that lie at the heart of a carefully constructed political consensus, policy-makers in Western Europe are again looking hard at job-sharing concepts such as the four-day week as a way to ease the crisis.

For the first time, advocates include some major trade unions.

“It wouldn’t be utopian to take a look at the 30-hour week as a general yardstick,” argued Guenther Schmid, director of labor policy and employment at Berlin’s respected think tank, the Wissenschaftzentrum. “For many of those now employed, it would mean a drastic cut in working time, but it would also mean new job possibilities for many unemployed and create equal career opportunities for many women.”

So far, northern countries have taken the lead.

For example:

* In Belgium, the government announced last month that, beginning April 1, all 80,000 federal employees would have the right to a four-day, 32-hour workweek as part of a large-scale Plan for Redistribution of Work in the Public Sector. More than a quarter of a million other regional and local government civil servants and employees of state-owned companies may eventually qualify for the plan.

While the idea has been criticized in some quarters as a bad example for industry because it offers between 86% and 90% pay to those who opt for the plan, government economists predict that the move will create thousands of new jobs.

* In Denmark, 86,000 people are enrolled in a year-old government-sponsored program that offers employees in industry and the public sector a one-year paid sabbatical, either to devote to family and private affairs or for advanced training and education.

Officials at the Danish Ministry for Social Affairs in Copenhagen claim that about 60% of those on leave have been replaced by permanent new hires, but the government has pledged to make room for workers returning from sabbatical.

“The program has two dimensions,” said Torben Jensen, a ministry spokesman. “It helps create new jobs, and it enriches those who take time off.”

* In the Netherlands, trade union and employer organizations signed a national agreement two years ago compelling employers to meet worker requests for modified working hours except in cases that clearly damaged company interests. As a result, a quarter of the Dutch work force today works less than full time.

At the large Dutch department store chain KBB, for example, more than half the company’s 24,000 employees now work a 32-hour week. Under terms of the year-old accord, employees remained on full pay, but have agreed to renounce wage increases for two years and to work full time for six weeks each year.

A KBB spokesman said the plan had generated 500 new jobs.

“We’re promoting the four-day week as a way to create additional jobs in the Netherlands and Europe,” said Jeroen Sprenger, spokesman for the Dutch Labor Federation in Amsterdam.

He claimed that a shift to four-day weeks had already led to at least 30,000 new jobs in the Netherlands over the past three years and that there was the potential for a total of up to 100,000 new positions in Dutch industry and service sectors--a figure equal to 20% of the present unemployment rate.

* In Germany, officials at the country’s largest auto maker, Volkswagen, have declared successful a program that reduces the workweek from 36 to 28.8 hours. They say the company is considering extending it beyond its originally planned period of two years if sales remain sluggish.

About 100,000 VW employees voted in November, 1993, to work and earn less so that nearly one-third of them would not be laid off as the company adjusted to the auto industry’s deep recession.

“Morale is good, and we’ve kept the work force intact so we can be ready once expansion is required,” one official said.

German trade unions, which accepted the four-day week only grudgingly at the time, have gradually come to view it as a possible model for the future.

Last month, the German Federation of Trade Unions dropped its insistence that reduced hours be accompanied by full pay.

In an interview with the leading German business daily, Handelsblatt, at the time, federation Chairman Dieter Schulte admitted that mistakes had been made in opposing the trade-off of shorter hours for more jobs.

“I believe we’re smarter now,” he said.

Added Reiner Hoffmann, director of the Brussels-based European Trade Union Institute: “We can’t keep pushing for reduced working hours with the same pay. We’ve got to show greater flexibility and be better able to share the work that is out there. We’ve got to learn that sharing binds and to practice socialism within the working class.”

Such views are far from universal in Europe, however, even on the political left.

A key plank in the platform of French Socialist presidential candidate Lionel Jospin is a reduction of working hours in French industry from the current 39 hours to 35 hours per week with no loss in pay.

Some believe that the debate of coupling fewer hours with less pay is ripe in France but will only come once the presidential elections are over in the spring.

But the fact that blue-collar workers in many northern countries are volunteering to work and earn less in order to generate employment is, at least in part, a reflection of the level of affluence that they have achieved in the two generations since World War II.

At VW, for example, workers took their 20% pay cuts mainly by giving up such fringes as “recreational vacations” (two extra weeks every three years), vacation pay (half a month’s wages) and a “13th-month salary,” a de facto extra month’s pay once a year. One worker noted that his main sacrifice in losing these perks would be having to give up travel to Thailand.

But if workers and their trade unions seem to be warming to the idea of four-day weeks and other forms of job-sharing, employers remain cautious.

A survey conducted last year by the Brussels-based Sofres Group found that more than half the senior business executives and opinion-formers questioned in Western Europe characterized job-sharing as a poor idea.

For Raeymaekers’ employer, ETAP, a family-owned producer of industrial lighting equipment, the plan only works in one section of the plant and is financially viable there only because the government pays part of the fringe costs of those hired into new jobs.

“Without that, we couldn’t afford it,” said Norbert Joris, the company’s founder and chief executive. “Wage costs in this country are already near the top (of the industrialized world).”

Hoping to encourage job-sharing and thus diminish its high jobless benefits costs, the regional Flemish government also reimburses four-day week employees about half their lost income.

So far, about 50 of ETAP’s 300 employees have moved onto a four-day week since it was introduced last year, including several of the new employees whose hires were made possible by the shorter hours.

Training and administrative costs have risen, and occasionally employees miss important meetings because they are absent. But morale is higher, employees are less stressed, and personnel director Leen van den Abeele believes that absenteeism may be dropping.

“I’m sure we’ve won greater loyalty from our employees because of this,” Joris said. “Our goal is to hire more people.”

But Joris also said there will be no job-sharing in a smaller company he owns, ETAP Yachting, which produces pleasure boats.

“The work is too specialized,” he said. “To make a four-day week work, you need a rotation of five people doing the same task.”

Many employers maintain that only a mix of innovative new programs emphasizing flexibility can resolve the region’s unemployment crisis.

The four-day week can only be one of a series of options, they claim.

Wilfried Beirnaert, director general of the Belgian Employers Federation, for example, strongly criticized his government for presenting the four-day week as a panacea.

“It has been launched as the solution,” he said. “Our concern is that, once it begins, this system will be seen as the only option. What can be applied to the civil service can’t automatically work for industry.”

Others agree that greater flexibility is vital.

“Basically, employers see flexible work hours as the key to competitiveness,” said Thomas Vajna, a spokesman at the Cologne-based Institute for the German Economy. “That means weekend work, four-day weeks for workers, but operating factories six days (with) flexible schedules throughout the year.”

In a newspaper interview late last year, Beirnaert’s German counterpart, Klaus Murmann, argued that, “if the Germans stopped quitting work around 11 a.m. Friday and worked more flexibly again, then we could create 500,000 jobs in the next two years.”

Few, however, see it as so easy a task.

Thomas Mayer, a senior economist at Goldman Sachs in Frankfurt, argued that the key to more jobs lies in breaking what he termed a union wage cartel that won high wages for those in work but ignored the unemployed.

Germany, he said, needs an event like President Ronald Reagan’s face-down of air-traffic controllers in the early 1980s or British Prime Minister Margaret Thatcher’s stand against striking coal miners a few years later to free the country “from the straitjacket of the labor market”.

Still others look to the Danish model that generates new jobs by offering sabbaticals for retraining and other advanced educational opportunities as the best option.

“Knowing that we can only survive with a highly skilled work force in the future, maybe this is the way to get ready for it,” Berlin labor expert Schmid said. “Economic growth alone can never produce the jobs it once did.”

Times correspondents Marjorie Miller in Bonn and Mary Williams Walsh in Berlin, and researchers Sarah White in Paris and Isabelle Maelcamp in Brussels contributed to this report.