The problem facing the US economy is simple: too many people feel obligated to work full time. Other than this, corporate profits and productivity are fine. All that needs to be done is to give businesses a standardized way to employ skilled workers at less than full time and clear benefits from doing this, so that those who wish to work less than 40 hours per week can. A third major way to determine employee compensation, in addition to a flat salary and hourly wages: The first 20 hours are paid at 1.2 times the current average rate for full-time work. Work beyond 20 hours in a single week is paid at 0.8 times the current average rate. This system depends on the employee and employer trusting each other. If they can, flexible hours are better. If there is no mutual trust, then a flat salary would be better. Part of trust is having additional options in case that trust was misplaced, whether it was trust in intentions or in capabilities. While options are available to everyone, it can feel like the cost associated with some options prevents them from being used in normal circumstances. The widespread adoption of this work concept would reduce unemployment and therefore increase the options available to an employee who was dissatisfied with their current workplace, but several additional legislative changes would be needed to increase trust between the employee and employer. The first is that while a business using this method could require employees to work the minimum of 20 hours per week, neither party would be penalized if that employee refused to work more than that and was separated from their position as a result. The employee could not be made to accept any unusual penalties in their employment contract for refusing to work more than the minimum of 20 hours, and the business would not have any of the usual obligations or fees from firing an employee for this reason. The second change would be to the overtime law, so that similar to salaried workers, employees who used this work concept would be exempt from receiving higher overtime pay. The third, for government employees, would be that additional hiring would be required within a certain time frame in any case where someone was forced to work more than 40 hours per week. Businesses who used this work concept instead standard wages or salaries would benefit for a simple reason: increased efficiency and productivity in the workplace. While the understanding of how to address inefficient practices by both workers and management has been continuously evolving, there is a concise description of the problem in the ideas of scientific management of the early 20th century: 'Taylor observed that some workers were more talented than others, and that even smart ones were often unmotivated. He observed that most workers who are forced to perform repetitive tasks tend to work at the slowest rate that goes unpunished. . . . Taylor used the term "soldiering" and observed that, when paid the same amount, workers will tend to do the amount of work that the slowest among them does.' http://en.wikipedia.org/wiki/Scientific_management#Soldiering The unexpected ways that workers will change their productivity was noted in experiments at the Hawthorne Works conducted from 1924-1932. In particular, shortening the work day actually resulted in an increase in total output, and one experiment that linked pay to the individual productivity of workers in a group resulted in a decrease in productivity. http://en.wikipedia.org/wiki/Hawthorne_effect While financial incentives linked to performance are successful in some industries and occupations, experiments have shown that for mental tasks higher compensation can sometimes decrease performance. http://www.youtube.com/watch?v=u6XAPnuFjJc Furthermore, even physical work suffers a significant decrease in productivity for periods of scheduled overtime that last for several weeks. According to a review of the existing data on the use of overtime in construction work, "there is about a 10% increase in efficiency losses for each additional 10 hr per week added to the schedule beyond 40 hr." http://cmdept.unl.edu/drb/Reading/overtime2.htm A recent survey has shown the importance of social media to college graduates in the younger generation, with one in three saying that being able to use social media such as Facebook at work was more important than financial compensation and more than half saying that "if they were offered a job at a company that banned social media use, they would either turn it down, or find a way to flout the policy." http://www.dailymail.co.uk/news/art...important-large-salary-college-graduates.html This collection of evidence shows the potential benefit for businesses that compensate employees with both time and a higher average wage for increasing their productivity and accepting a variable schedule. While the necessary amount of work would be continuously negotiated based on the needs of the employee and the business, trust from having options available in the case of a disagreement would prevent either side from feeling like they are being exploited in the arrangement. Involuntary unemployment in the United States would no longer be a problem.