As countries in Europe and North America emerge from lockdown and start trying to rebuild their devastated economies, the great concern is jobs.
Unemployment in the U.S. and Canada exceeds 13 per cent, a post-Second World War high. If it weren’t for subsidies that keep up to a fifth of the working population in paid ‘furloughs’ from their jobs, jobless rates in Europe would be as high or higher. That can’t go on forever, so there is a frantic search for job-saving strategies – and the ‘four-day work week’ keeps coming up.
Like that other proposed magic bullet, the guaranteed basic income, the notion of a four-day working week has been kicking around for a long time. The current emergency has given both ideas a second wind, and neither is nearly as radical or extreme as it sounds.
Less than a century ago the whole industrialized world transitioned from the traditional six-day working week (Saturdays included) to a five-day work-week, for the same pay, with no political upheaval and no significant loss of production. So why don’t we do that again, spread the work around, and save lots of jobs?
Because it doesn’t work like that. The four-day week is not about spreading the load. It is about finding ways for people who already have jobs to squeeze the same work into four 10-hour working days instead of five 8-hour days, or to work ‘smarter’ so that they can get the same work done (or more) in only four 8-hour days.
The 40-hour week done in four days is the only available option for most process workers on assembly lines or other repetitive physical tasks. Ten-hour workdays are even harder than they sound, but the prize is a three-day weekend and some people are willing to pay the price.
If everybody buys into that, then management can shut the plant down one extra day and save on power. If only some do, then management has the headache of scheduling some 10-hour shifts and other 8-hour shifts, plus the cost of the mistakes that may accumulate when exhausted people are approaching the end of a 10-hour shift. And no saving on electricity costs.
Nevertheless, it does make for a happier workforce, by all accounts, and maybe therefore a more efficient and productive one. There are already a few examples of this kind of four-day working in every industrial country, and now the prime ministers of Finland and New Zealand are both talking it up. Neither woman, however, is proposing to impose it nationally, and nobody is suggesting that it will create more jobs.
The four-day week is an easier and more attractive package for people in administrative and sales jobs, because everybody knows that there is a lot of wasted time in office work: social media, pointless emails, long boring meetings, etc. You could get the job done a lot quicker if everybody was motivated to concentrate on the bits that are actually useful and skip the rest.
So motivate them. Tell them that they can drop to four 8-hour days a week for the same pay as the old five days if they can still get the same work done – and leave it to them to figure out how. If they can’t, then it’s back to the same old five-day grind.
Miraculously, they almost always do manage to find the time. In many cases, indeed, productivity actually rises: happy workers do better work. The four-day week is an excellent idea whose time may finally have come, but it is not a magic bullet. Companies don’t ever hire more people just to spread the work around.
So what might spread the available work around? The U.S. Congress had a brilliant idea in 1938, when it passed the Fair Labor Standards Act, which required employers to pay overtime at 150 per cent of the normal hourly wage for anything over 40 hours of work a week.
The idea was to make employers hire more people. If they had 40 employees working 50 hours a week, they would have to pay each of them overtime for the last 10 hours. So why not just hire another 10 people and save all that overtime pay? It worked quite well at the time, but it would not work now. Don’t hire more people; just put in more automation.
The coronavirus is just an accelerator. The real problem with employment ever since the 1990s has been automation, which has been eating up good jobs and excreting low-paid, insecure ones instead – or none at all. Six million good manufacturing jobs were automated out of existence in the U.S. in 2000-2010, which led fairly directly to the election of Donald Trump in 2016.
The current pandemic is speeding the process by driving more jobs online, especially in sales (a different kind of automation), and fiddling with working hours or minimum wages is not going to stop it. So what’s left? Maybe a guaranteed basic income would help, but that’s a discussion for another day.