Around a month ago, the British Labour Party announced its policy to reduce the working week to thirty-two hours within ten years. The economic case for the policy is laid out in a report prepared by Robert Skidelsky at the behest of the party. According to Skidelsky, “there is overwhelming evidence that most workers would choose to work fewer hours if they could do so without a loss of pay”. It might not be particularly surprising that people want more free time without having to give up any pay, but as I wondered near the start of this blog, why don’t we do it?
Critics quoted in the news article linked above worry that worker productivity cannot be increased so far as to produce the same income from less work. Skidelsky’s report has an answer for this, though he doesn’t make much fanfare about it: the Netherlands, Germany and Denmark (amongst others) “have achieved reductions in working time which have eluded the UK: they work shorter hours and produce more”. If this is correct, insisting on long working hours in order to keep up production seems like a failure on its own terms, even if matching the Europeans is more complex than simply reducing working hours (it may require additional investment, for example). In any case, even though productivity growth is slower now than it has in the 1960s, productivity is nonetheless growing while working hours have remained much the same since 1970.
Skidelsky suggests that there several factors behind the persistence of working hours despite increases in productivity: social pressure to continually increase consumption (i.e. “keep up with the Joneses”); changes in employment relationships that have led to employers having greater power to set working hours than employees; and the distribution of income (he suggests that workers ceased to achieve reductions in working hours at the same that income inequality begin increasing in the 1980s but I cannot see any obvious explanation for why one might cause the other; the more obvious explanation to me is that both are artefacts of the change in the balance of power since the 1980s).
Skidelsky supposes that people will continue to want to increase their consumption, so the challenge is to (a) increase productivity and (b) use some of that productivity to reduce hours rather than increase wages and/or profits. He acknowledges that this will be more difficult (or at least slower) now than it might have been in the past, since productivity growth is slower than it was in the past. But he does recommend several policies that could be implemented by a government in pursuit of this.
Firstly, the government can lead by example by establishing a shorter week within the public service and within organisations from which it procures goods and services. Secondly, it could implement a jobs guarantee programme that set a floor on what wages and conditions people could be employed under. Thirdly, it could require listed companies to report on how automation impacts employment within those companies. Fourthly, it (or industry groups) could establish “social partnerships” within each industry sector through which companies and workers in that sector could discuss issues or pay, working hours, and so on. Finally, it could implement “individual time rights” that gave workers greater power to alter their working hours.
No doubt all of these policies have been discussed at length elsewhere and I won’t comment further upon them here. But I’ve recorded them as one perspective on why don’t we work less? and policy issue to follow.