Could the UK introduce a four-day working week, and would it be economically feasible?
Analysis: What’s the argument for such a reform? How could it be implemented? And what would the impact be on the economy? Ben Chu explains
Labour, under Jeremy Corbyn, has been making encouraging noises about the idea of a four-day working week for some months now. And this week things seemed to move on a bit further for the opposition party as it was reported that the shadow chancellor, John McDonnell, has spoken to the cross-bench peer Lord Skidelsky about the possibility of an inquiry into the topic. But what’s the argument for such a reform? How could it be implemented? And what would the impact be on the economy?
Why would we want to move to a four-day week?
Many advocates cite greater work-life balance. Working one fewer day a week would free workers up to look after children, elderly parents or simply to have more leisure time.
But Mr McDonnell has talked about the move in terms of productivity – or a worker’s output per hour.
He argues that British workers work the longest hours in Europe and yet are among the least productive.
That’s borne out by the data we have.
The Organisation for Economic Cooperation and Development estimates that UK workers put in an average of 1,681 hours a year in 2017. That compared with 1,514 in France and 1,356 in Germany. Yet the Office for National Statistics calculates that GDP per worker in the UK is lower than both those countries.
Labour’s lesson seems to be that one way to boosting our weak national productivity is actually to give people less time in the workplace to encourage them to work more efficiently while they are there. While this might sound fanciful it’s not totally outlandish. One recent study from New Zealand showed that when workers moved to a four-day week at one firm their per-hour productivity did indeed rise.
The argument is that a better work-life balance makes people more motivated, perhaps by reducing productivity-sapping illness and stress.
How could it be implemented?
This is a key question. For whatever the theoretical merits of a four-day week for productivity, ordering the entire economy to shift immediately to such a radically different working time structure would clearly be massively disruptive.
Employers would have to reconfigure shift patterns dramatically, in some cases having to hire many more workers. Think in particular of public services like schools and the health services. Think of the retail and transport sectors. Also, around 15 per cent of the UK workforce is now self-employed. It’s hard to see how the state could practically compel those 5 million self-employed workers to limit their working week to four days.
The nearest example of a similar shift being implemented under central direction is France’s 35-hour week, introduced in 2000. The parallels should not be exaggerated though. The 35-hour week is not a hard limit, it merely means that when workers put in hours beyond that they must be paid overtime or qualify for rest days.
One policy possibility a Labour inquiry might consider is whether to offer tax breaks or other kinds of support to firms that offer four-day working to employees, hoping that this could encourage the practice to spread.
What would be the impact on the economy?
That would depend to a large degree on those productivity effects. The size of the economy is the value of the output of goods and services produced over a certain period. Working fewer hours would, as a first order effect, seem likely to reduce the volume of those goods and services, thus contracting the economy. But if we could produce more of that output in a given period that negative impact would be mitigated, perhaps even wiped out altogether.
And economies are dynamic too. If we could increase our productivity growth rate through a shorter working week the economy could, theoretically, be larger over the long run. Critics argue that the productivity impacts are unproven, and that France, with its 35-hour week, has higher unemployment and a more rigid labour market than the UK, something that seems to be particularly unfair on young people.
Yet it’s also worth noting that in the late 1900s UK workers put in on average more than 2500 hours a year, almost 50 per cent more than today. But our economy is far larger than it was then due to productivity growth. The big-picture historical lesson is that it’s certainly not impossible for average living standards to rise even as average hours worked falls.
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