A Reduced Work Week, in Theory

In my last blog, I discussed the increasing use of work-sharing by companies as a method of reducing layoffs during the current recession. In particular, the idea of reducing the work week in order to share the same amount of work between employees is beginning to be used with greater frequency as an alternative to laying off employees outright.

The idea of a reduced work week is not new – in fact, is a topic that has been explored by economists for decades. A century ago, economist Sydney J. Chapman predicted that, as the economies of Western nations grew and production became more intensive, the number of hours that people worked would decrease and be replaced with growing amounts of leisure time. Some theorists at the time were even concerned that the dramatic increase in the mechanization of production would mean that people would soon cease to work at all!

While this did not occur, the first half of the 20th century did see a reduction in the average workweek. For example, between 1900 and 1950, the average number of hours that people worked in the United States fell by 25 percent, largely due to regulation by government and labour unions. Canada also experienced a steady decline in the number of hours worked as wages rose and government legislation of a 40-hour work week was introduced.

However, much has changed in recent years. While the productivity of the average worker has increased dramatically since the 1950s, the number of hours worked have remained close to the same, or in some cases even risen. Data from the U.S. reveals that it only takes 11 hours to produce the same amount today that it took a worker 40 hours to produce in 1950. Despite this, the 40-hour work week remains, and has increased in many workplaces.

In Canada, between 1998 and 2005, leisure time decreased and time at work increased for both men and women, particularly for working parents. One reason for this is the fact that relative incomes for the majority of Canadians have stagnated or declined since the 1970s. Many people, particularly in the lower and middle classes, are working longer to compensate for their reduced incomes. Today in Canada, the average family with children is working 200 hours more a year than they were a decade ago.

Longer working hours can have negative consequences for workers, their families, and even businesses. Many social and economic arguments have been made for capping the work week at 40 hours, and even for reducing it from five days to four.

A primary economic argument for it is that it can help reduce unemployment by engaging a larger number of people to do the same amount of work.

Paradoxically, it also has been found to boost productivity. Studies have shown that after a certain number of hours worked, there is a declining rate of return on productivity. More leisure time means that workers are better rested and can be more alert, focused and productive in the hours they are working. A cap on the number of hours worked per week also acknowledges the importance of leisure time for the overall health and well-being of both workers and their families.

The potential social and health benefits of a reduced work week are well-documented. Reducing working hours can provide people with a greater amount of leisure time in which they can spend with family and friends, or by volunteering, being active in their faith community, engaging in household activities, staying active, gardening, and other community activities that can contribute to a healthy life. Greater flexibility in working hours can also help parents – particularly mothers – balance their work and family responsibilities.

However, there are also many who argue against it reducing work hours because of economic or financial reasons. There is an assumption that working less hours leads to lower productivity, weakening the ability of a company to compete in the domestic marketplace or a country to compete internationally. There also exists some skepticism as to the extent to which work-sharing can reduce unemployment over the long term.

The implementation of a reduced work week could also have a negative impact on workers, particularly if it is imposed upon them instead of adopted by choice. For those with low or even middle incomes – particularly if their wages are paid by the hour – a reduction in working hours could have serious financial implications. As well, if hours are reduced but productivity expectations remain the same, workers then could experience higher levels of job-related stress.

Government policy can play an important role in managing the implementation of a reduced work week by ensuring that employees’ lost wages are supplemented through programs such as EI and by ensuring that workers can keep their benefits.

While there can be many benefits, implementing a reduction in the standard workweek can also pose some practical challenges. In my next blog, I’ll detail some of these by taking a closer look at two European countries that have introduced a 35-hour work week: France and Germany.