DevelopmentPolicy
February 27, 2019

Should governments back a four-day working week?

A new study showed a four-day week improved productivity, profits and worker wellbeing

Last week, Perpetual Guardian, a New Zealand-based financial services company, announced that a big gamble had paid off. It had offered its 240-strong workforce a four-day working week without reducing their pay — and saw a 20 per cent jump in productivity and rising profits alongside falls in stress.

The trial is the latest in a long line of experiments by businesses to try and reduce working hours without hurting the bottom line. Proponents claim the four-day week can drastically improve worker wellbeing and productivity without crippling output. But critics say it’s not worth the risk when productivity growth remains sluggish across some of the world’s developed economies.

Countries from the US to Sweden to France have experimented with reduced hours, but it’s in the UK that calls to move to a four-day working week are gaining momentum. Some of the country’s largest trade unions are now voicing support, senior figures in the UK’s Labour Party have expressed interest, and the Wellcome Collection, an 800-strong research consortium in London is moving all of its staff to the four-day week, the largest organisation in the world to do so.

Could the four-day week save us from a culture of overwork? Or could it risk damaging economies that have been stagnating since the 2008 financial crash?

Workers first

The four-day week could transform three aspects of the UK economy: gender equality, economic justice and worker wellbeing.

That third benefit could be the biggest payout. In the UK, 15.4 million working days were lost to work-related stress, anxiety or depression in 2017/18. Some one in four sick days were directly related to workplace stress. And the UK’s not alone.

In the US, on any given day, one million workers are off sick with stress.

“There’s a crisis of overwork in UK workplaces,” said Aidan Harper, a researcher at the New Economics Foundation and organiser at the Four Day Week Campaign. “It’s a huge drag on the economy, and the human cost is immense.”

A four-day week, meanwhile, could create free time to pursue hobbies or interests, and let people better fulfil countless other roles outside the workplace as parents, carers, volunteers or community organisers.

That could create particularly significant pay-offs for women.

In the current economic system, Harper argues, women are expected to perform a variety of unpaid roles as mothers and carers. In a five day working week, that traps them in part-time jobs, most of which are low-paid and with few opportunities for career advancement.

If the working week were only four days, many more women would be able to work full-time, earning fairer wages and enjoying better promotion opportunities.

But gender is just one element of a much broader case for economic justice, according to Harper.

Most people agree that economic gains should be fairly distributed among employer and employee, even if there is disagreement about what exactly fairness looks like.

But, Harper points out, many countries haven’t applied that rule to potential gains in time that come from increased productivity. “As an economy, we’re nearly two-and-a-half times as productive as we were in 1970, and yet we don’t work that much less,” he said, pointing to countries such as France in which unions fought for and won a 35-hour working week in part in recognition of productivity gains made over time.

That case could become all the more urgent if automation transforms the UK economy as some predict. If automation does one day threaten around 30 per centof jobs, reduced working weeks would maintain employment figures while passing on the benefits automation brings in the form of time gained to workers.

Reality bites?

But Ian Brinkley, acting Chief Economist at the UK’s Chartered Institute of Personnel and Development, while sympathetic to the aims of the four-day working week, expressed concern about the mechanics of implementing such drastic changes to a sluggish economy like the UK’s.

While Perpetua Guardian’s four-day week without any reduction in pay might have improved productivity, he argued that there is not yet enough evidence that other firms could expect the same outcomes.

“I think the jury’s still out,” he said. “You can certainly implement a four-day week and maintain productivity, but a lot of other changes would need to be made,” he said. “Just cutting hours doesn’t necessarily give you a boost in productivity.”

Reducing wages to free up resources for hiring more staff would be one measure; investing in technology to increase productivity and offset any negative consequences of the four-day week would be another. Both would require resources that some firms might not be able to afford.

Another concern stems from the applicability of current evidence to smaller enterprises or those with smaller profit margins.

“A lot of the examples [of the four-day week’s success] are highly successful companies in fast-growing markets. In that situation, you can probably afford to move to a four-day week. I think the ordinary, run-of-the-mill business would struggle to do it.”

Brinkley also expressed scepticism on the possibility of reduced hours to ensure automation works for, not against, the best interests of workers.

“We’ve had tons of automation and no productivity growth,” Brinkley said. “The aim is to get productivity growth in the first place.” The challenges of automation might necessitate a reduced working week — but those challenges remain some way off, he argued.

The Overton window

The four-day week is one solution to a problem that few would dispute: UK workers are too regularly burning out, and the UK labour market isn’t adequately meeting the desires of its workers, whether in terms of pay, security of contracts or number of hours worked. Human wellbeing is the casualty.

“It shouldn’t be beyond us to reduce the gap between what people want and the economy is giving them,” said Brinkley. Whether the four-day week is that solution isn’t yet certain. Despite murmurs of support from the UK Labour Party, it isn’t yet a political priority.

But no longer is the four-day week merely a pipe dream.

“Even two years ago, nobody was talking about working time reduction,” said Aidan Harper. “Now, a whole movement is coalescing around the fact that we need to think about work in a fundamentally different way.”

This piece originally appeared on Apolitical, the global network for public servants. You can find the original here

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