The costs and benefits of switching to a 4-day work week
In 1926, Henry Ford instituted a five-day 40-hour workweek with no loss of pay for having Saturdays off, what's now the standard in American workplaces. Now there's a push to consider a four-day 32-hour workweek, again, with no loss in pay. But how practical is that? Earlier, I spoke with Daniel Hammermesh, an economist at the University of Texas, and Joe O'Connor, who helped develop an international pilot program to test a four-day workweek. I asked O'Connor about the results of that pilot program. A four-day week is a good idea, because we've seen in the trials that have taken place in the United States, in the United Kingdom, and elsewhere all over the world over the course of the last year, that most of the companies participating in those trials have said they plan on making the policy permanent. Their revenue has either remained stable or has increased during the trial, and they've experienced that their productivity has been able to be maintained and, in many cases, even improved. Unsurprisingly, we saw improvements across a whole range of different well-being indicators amongst employees that participated in the trials, but it's something that can actually be better for business, too.
Daniel Hammermesh, is there a cost to this? I think there is. I can't believe that if, in fact, this were applied universally, even fairly broadly, that we wouldn't see a substantial decline in output and a substantial resulting decline in people's incomes. If employers could do this, my question is, why haven't they done this? Everybody would win. I just don't think they can very broadly. Joe, what do you say to that loss of output and loss of income? I would agree with Daniel that this is very much not a one-size-fits-all model. I'm not arguing that the four-day week, nine to five, should become the new normal everywhere, because as we know, there are many sectors, many industries, many companies that don't have a five-day nine to five. What I'm arguing is that most companies today who operate on a five-day nine to five basis could move to a four-day week without necessarily needing to increase headcount and without necessarily damaging on their business performance, priorities, or productivity.
Can they attack inefficiencies like overlong and unnecessary meetings, distractions in the workday, processes that are outdated or inefficient, and poor use of technology, that they can go a long way to offering a shorter work week to their employees without undermining the bottom line? What about Daniel's other point, that if this is such a great idea, why haven't businesses already done it? Well, the reason why businesses haven't done it is that before the pandemic, it wasn't acceptable in society or in business, this idea that you could run a global company from your kitchen table, this idea that you could be as productive at home as you could be in the office. And it took a big game changer like the pandemic to dislodge a lot of these cultural and societal norms. I believe the same is true with the shorter working week. This has opened the eyes of leaders and of managers that there are different ways of working that are possible. Daniel, you say it's a trade-off, where do the benefits become so great that they outweigh the loss of productivity and the loss of income, or do they? It depends on people's preferences. Some people might be willing to take, let's say, five or eight percent cut in income to have an extra 20 percent of leisure time. But the point is that there are a lot of industries, as Joe would acknowledge, where this doesn't work, manufacturing cars on the assembly line, which is the archetypal model we have.
I don't see why working fewer hours is going to get any more, and I think substantially less output. One other thing to stress, though, and Joe is right, there's been a huge trend already before the pandemic toward more four-day work. It went from 1 percent in 1973 to over 6 percent in 2018. And I fully expect it to go up, and Joe's organization, fostering that, I think is a good thing if we can do it. Joe, there are some models in the United States where it's a compressed week. It's four days, but 40 hours. What do you think about that? The difficulty I would have with that model in a lot of cases, particularly when you're talking about knowledge-based or work that used to be maybe primarily office-based, now as hybrid or remote, I'm not persuaded or convinced that people are as productive in their ninth or 10th hour on a Wednesday, necessarily, as they might be in their first or second hour on a Friday.
I'm also not persuaded that, from a burnout perspective, that people are likely to be better rested after four, 10-hour days than they might be after five, eight-hour days. So I think the research is not conclusive that this is something that, necessarily, in lots of job types is good for business and good for people. And the other point I would make is that it overlooks the power of the incentive, the ability to be able to get some of their time back in exchange for the same pay, that people are incredibly focused and motivated and driven while they're at work in order to achieve the goals and the targets of the company. Daniel, what do you say to that, especially this point about efficiency and productivity actually sort of having diminishing returns? I think he's quite correct on that, that it does, on the other hand, even a 10-hour day for ninth and 10-th hours, people are not doing nothing. So I think this would keep up almost the output we now have. But the crucial point to note is that people like bunching leisure. In some industries, it's been very successful in medical hospitals for 12-hour days, three days a week.
That's a full time. And that bunches very well, it accords very well with the demands of clients not to have the patient shifted from one nurse or one doctor to the next three times a day. So I think all of this depends on what is appropriate. I doubt that that many industries, where in fact four days, eight hours a day, will leave us as well off. Daniel Hammer mentioned the University of Texas in Joe O'Connor of the Worktime Reduction Center of Excellence. Thank you both very much. Thank you.
Thank you for having me.
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