An idea I have long had is that we should move to a 4 day work week. I onetime even asked the CEO of my previous company whether he would be open to experimenting with the idea. So this week, I was heartened to see press about Iceland's results when moving to a 4 day work week and that Iceland is looking to increase adoption.
My rationale behind a 4 day work week has generally been based on the idea that:
1. Given the level of affluence in the modern world we could easily work 4 days (hunter gatherers appear to only work 15 hours a week) to meet human needs.
2. Aggregate output wouldn't be impacted at all (if anything there is some evidence it increases). There is a case that we shouldn't really care all that much about output, but more on that later.
3. For companies that can't afford top talent, it offers a way to distinguish oneself in a competitive hiring market
To be clear, a 4 day work week is that your salary remains the same as it would working 5 days a week. In theory if you are getting paid hourly in a service job you could work 4 days a week but that would mean a 20% cut in salary. Off the bat, even some forms of work (attorneys come to mind) will probably have a hard time transitioning to a 4 day work week while retaining similar levels of economic output (whether we should care is a different story). If the output of each employee is measured by hours worked and you are paying an employee the same salary but their output is slashed by 20% that is probably not economically tenable. Jobs where output is measured by anything other than hours worked should transition to a 4 day work week.
I mainly wanted to focus on addressing the primary concern in adopting a 4 day work week around it's impacts on aggregate output. Basically, if we work 20% less doesn't that mean output will drop too.
There are 2 ways to respond to this concern, one that the end goal of working less is worth any costs to output and so reducing output isn't all that bad. Maximizing GDP is actually a really poor way to measure how healthy an economy is. There is an even more extreme case that maximizing GDP is actually a bad thing in particular because of it's costs on the environment. Focusing on quality of life metrics is the actual goal of the economy. Wealth is generally correlated with those metrics, but the metrics we should be optimizing are human ones not GDP. Even though I can see the case that cutting GDP by X% may have positive environmental impacts, I'm also convinced that cutting output meaningfully would have significant impacts on those quality of life metrics that we all care about. It's no coincidence that the Human Development Index does correlate positively with GDP per capita.
The other response is that output probably won't be impacted by this change. This argument is more compelling as most organizations/companies aren't going to really accept the idea that reducing their output is a good thing. In Iceland
My rationale behind a 4 day work week has generally been based on the idea that:
1. Given the level of affluence in the modern world we could easily work 4 days (hunter gatherers appear to only work 15 hours a week) to meet human needs.
2. Aggregate output wouldn't be impacted at all (if anything there is some evidence it increases). There is a case that we shouldn't really care all that much about output, but more on that later.
3. For companies that can't afford top talent, it offers a way to distinguish oneself in a competitive hiring market
To be clear, a 4 day work week is that your salary remains the same as it would working 5 days a week. In theory if you are getting paid hourly in a service job you could work 4 days a week but that would mean a 20% cut in salary. Off the bat, even some forms of work (attorneys come to mind) will probably have a hard time transitioning to a 4 day work week while retaining similar levels of economic output (whether we should care is a different story). If the output of each employee is measured by hours worked and you are paying an employee the same salary but their output is slashed by 20% that is probably not economically tenable. Jobs where output is measured by anything other than hours worked should transition to a 4 day work week.
I mainly wanted to focus on addressing the primary concern in adopting a 4 day work week around it's impacts on aggregate output. Basically, if we work 20% less doesn't that mean output will drop too.
There are 2 ways to respond to this concern, one that the end goal of working less is worth any costs to output and so reducing output isn't all that bad. Maximizing GDP is actually a really poor way to measure how healthy an economy is. There is an even more extreme case that maximizing GDP is actually a bad thing in particular because of it's costs on the environment. Focusing on quality of life metrics is the actual goal of the economy. Wealth is generally correlated with those metrics, but the metrics we should be optimizing are human ones not GDP. Even though I can see the case that cutting GDP by X% may have positive environmental impacts, I'm also convinced that cutting output meaningfully would have significant impacts on those quality of life metrics that we all care about. It's no coincidence that the Human Development Index does correlate positively with GDP per capita.
The other response is that output probably won't be impacted by this change. This argument is more compelling as most organizations/companies aren't going to really accept the idea that reducing their output is a good thing. In Iceland
According to the report, overall output did not dip in most workplaces, and in some it improved. Reykjavik’s department of accountancy, for example, recorded a 6.5% increase in the number of invoices it processed during the trial compared with the same period a year before.
Workers at Microsoft Japan enjoyed an enviable perk this summer: working four days a week, enjoying a three-day weekend — and getting their normal, five-day paycheck. The result, the company says, was a productivity boost of 40%.
Microsoft Japan says it became more efficient in several areas, including lower electricity costs, which fell by 23%. And as its workers took five Fridays off in August, they printed nearly 60 percent fewer pages.
If you do a quick Google search of "4 day work week", you will find countless examples of organizations moving to it and seeing increases in productivity, holding output steady, as well as better retention and reports of less burnout.
Now, you may be someone who doesn't care about employers abilities to hire or impacts on output/GDP and are like 4 day work weeks are great because they make give people the ability to spend more time not working which is a huge positive and to that I totally agree. Getting an extra day to spend on leisure is the primary reason we should move to a 4 day work week. And I'll concede that my framing about how this is good for capital is maybe an incorrect framing and that maybe that the reason to adopt a 4 day work week is expressly because capital is opposed to it. In the US, that is probably a challenging framing to have where capital to an extent has a lot of sympathies in mass culture. This is probably a topic for another post, but business leaders in America (especially on a local level think a car dealership owner) are considered leaders and not villains and so have cultural cache. Convincing gas station owners as well as Silicon Valley CEOs that this is a good model will go a long way to help increase adoption versus one that presents a 4 day work week as part of a broad war on capital.
My prediction is that I don't expect 4 day work weeks to become mainstream anytime soon, but if labor market conditions persist you will see more firms embrace the idea of a 4 day work week as a way to differentiate themselves which might help with adoption.