A good economic system does not need to provide free handouts to people. Instead, it should empower people to become productive individuals who participate in the production process of goods and services by getting a job as well as enable them to become consumers of these goods and services available in the market by having those jobs provide decent incomes. One way to accomplish this is by creating a state of Full Employment where people will have the opportunity not only to find a job, but one with decent income as well. Reducing the work-day is one way to get to this stage of Full Employment.
To clarify, Full Employment does not mean 100% employment. Full employment means that there is zero cyclical unemployment, that is, the unemployment caused by economic downturns, by businesses not having enough demand for labor in order to employ the people who are looking for jobs. Structural and Frictional Unemployment are thought to be part of the economy and therefore will always be there. A better definition is perhaps the one used by Dean Baker and Jared Bernstein from the Center for Economic and Policy Research (CEPR):
"Full employment can be defined as the level of employment at which additional demand in the economy will not create more employment. All workers who seek a job have one, they are working for as many hours as they want to or can, and they are receiving a wage that is broadly consistent with their productivity. The only people in the labor market not working are the ones who do not have the skill or ability to work (the structurally unemployed) and those who are between jobs (the frictionally unemployed). (Baker and Bernstein, 2013)"
The second point is that inflation generated by higher demand is not necessarily a bad thing. Inflation can be understood as "too much money chasing too few goods". Wages could cause an inflationary problem when production doesn't rise as fast as wages grow. Additionally, We have seen that wages have remained stagnant from the 70's while productivity has doubled. Those profits generated by this dynamic have gone not for the worker who is producing more per hour, but to corporation and executives. If wages go up, businesses could choose to pass that cost to the consumer as a way of higher prices or to absorb those cost in terms of lower profits. The latter would be a positive outcome given the levels of inequality. (The Real News, 2010)
Full Employment could also alleviate the stagnation wages have suffered since the 70's in the United States, and therefore, alleviate income inequality. Full employment then could be a great tool to fight poverty.
Among the ways to increase employment and generate jobs, one way would be to increase output (Economic Growth), which in turn, generates demand for labor. On the other hand, we have the option of share the workload by reducing the work day and thus generate new job opportunities not only for the unemployed, but also for the people who are involuntarily working part-time, but would like to work more hours. It could even include the people who are not normally included as part of the labor force but, due to the reductions in the work day, they might decide to enter the labor market, like college students, stay-at-home parents, discouraged workers, etc...
Economic Growth is not very strong -and, as we have seen previously, not a desired pattern we should follow in the long run given that we live in a finite planet-. Additionally, many people consider the so-called recovery as a Part-Time Recovery due to the unexpected increase of part-time jobs. Therefore, the best (and even most effective way) to generate more jobs with decent incomes and to reach a level of Full Employment is to set policies that reduce the standard work-day.