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Industrial Policy

Is Friday the new Saturday? Europe eyes a 4-day week

This article is from the first chapter of Work Reloaded, our editorial series on how employment is changing after COVID.

Two European politicians at opposite ends of the spectrum want the same thing: a four-day working week.

In fact, Íñigo Errejón, founder of Spain’s left-wing Más País party, and Egbert Lachaert, chairman of the Flemish liberal Open Vld, probably don’t agree on much beyond the fact that we are all so exhausted that we need three days off.

It’s an idea that is now building momentum not only in academic circles but also appearing in party manifestos and government agendas in Europe and beyond.

In short, workers are frazzled. Burnout has been declared an occupational hazard by the World Health Organization, and people are leaving their jobs en masse in what’s being dubbed “the Big Quit.” After two years of pandemic-induced working-from-home, which further blurred the lines between work and private life. 

In rich countries, some — mostly leftwing — parties see the four-day week as a possible panacea to both public health issues and economic ills.

The Belgian government on February 14 last month agreed to give employees the possibility of compressing the country’s statutory 38 working hours into four days, provided their bosses agree. 

“Our main objective should be to have more flexibility,” Lachaert told POLITICO in the Belgian parliament’s café.

Lachaert opposes a reduction in working hours, arguing that “economically, you need to make up for that.” The plan, part of a wider reform of the labor code, will go through negotiations with unions and employers before a vote in parliament. 

In Spain, the government is designing a two-year trial due to start later this year where up to 300 companies will reduce working hours while keeping wages steady. The pilot, co-designed with Más País, aims to convince society of the many benefits of such a shift.

“What we want to do is to demonstrate in an empirical way not only that the Spanish economy can afford it, but also that it can be a magnificent incentive for productivity, for the retention of workers and a bet on talent, as opposed to a bet on the low cost economy,” Errejón told POLITICO in a Zoom call. He doesn’t want to put the matter to a vote yet. “There is still some way to go,” he said.

The list of interested parties goes on: Portuguese Prime Minister António Costa, who recently won a landslide election, made the four-days working week a key campaign promise. Sanna Marin, his Finnish counterpart, floated the idea before becoming prime minister, though her government hasn’t pursued it. Iceland extended reduced working hours to all public employees after a successful trial showed it improved workers’ well-being and productivity.

And it’s not just Europe: New Zealand’s Prime Minister Jacinda Ardern suggested it as a way to boost domestic tourism following a drop in arrivals due to the COVID pandemic. In the U.S., Democratic Congressman Mark Takano has introduced a bill that would cut working hours from 40 to 32, and won the support of 100 progressives to debate it on the House floor. 

“COVID has changed the landscape. I think it’s opened everybody’s eyes to the fact that you can work differently. And therefore a thing that I thought would never really get a lot of airtime is now going ahead at steam,” said Andrew Barnes, an entrepreneur and co-founder of NGO 4dayweek.com, which promotes the idea through trials around the world.

Old but gold?

A three-day weekend seems like an innovative vote-catching proposal, but it’s not new. Workers have been arguing for reductions of working time since the dawn of labor movements, with the 40-hour/five-day week being their most conspicuous step forward in the early 1900s.

After World War II, productivity and output rose alongside wages — until in the 1970s they became divorced. While productivity kept growing, wages stagnated, meaning workers have been producing more than they receive in their paychecks.

Something in our current organization of work is broken, and the four-day week may be the way to fix this, argues Pedro Gomes, an economist at Birkbeck University London, in his book “Friday is the New Saturday: how a four‑day working week will save the economy.” 

Others have come to support the idea from an environmental perspective — fewer commutes equal fewer emissions — or a gender-equality one — more free time should help share care work more equally. 

“I buy all that,” said Gomes in a recent Zoom call, “but I think we can make a much better case, the economic case, for the four-day working week, because we can’t think about leisure time as time away from the economy.”

Beyond the provocative title, his book makes a simple argument, borrowing from former illustrious proponents of the idea including John Maynard Keynes, Karl Marx and Joseph Schumpeter: No matter which ideological camp you hail from, the four-day work week has something for everyone — and it’s a win-win proposition for both workers and the economy.

Liberals will cherish the increased leisure time, which will boost innovation by freeing up human capital. People with more free time will start an enterprise, moonlight in a second job, pursue their passions, or simply rest.

Keynesians will predict a rise in demand for leisure activities, which in turn will boost growth. Indeed, the economic historian Robert Skidelsky observes that Keynes believed, rather overoptimistically, that people would free themselves from working more and more for increased income at a relatively modest GDP level of around $66,000 per capita. Beyond that level, Keynes reckoned that people would be liberated from labor “like the lilies of the field, who toil not” to pursue more edifying leisure activities.

Egalitarians will welcome the fall in technological unemployment resulting from fewer workers being displaced by machines, and so on.

Empirical evidence, while limited, suggests the reduced week does lead to productivity increases which can make up for the reduction in time spent at work. Other types of adjustments such as wage cuts, wage moratoriums over a period of years, savings on complementary costs such as energy use, increased working hours in the remaining days, or a raise in prices could be negotiated at the firm, sectoral or country level to ensure that the shift accrues to firms’ bottom lines as well as workers’ free time, Gomes argues. 

He envisions a transition period of five years, at the end of which the whole economy would be working over four days — though not necessarily all the same. He likens it to “a shift of gear for the economy. Like in your car, there might be an initial jolt, but the economy would be better off, even if GDP might initially say otherwise,” he wrote. 

Critics don’t think that a government-mandated reduction in working hours is the most efficient solution — or indeed, one that workers would want.

France’s decision to reduce working hours to 35 (from 39 previously) in 2000 to reduce unemployment by work sharing failed to achieve its goal, and was followed by an extension of overtime, paid at a premium.

“Something that takes place via government intervention, centrally and imposing this type of restriction everywhere, in my view is bound to create a lot of problems and possibly also increase unemployment,” said Tito Boeri, professor of economics at Bocconi University in Milan, adding that social partners — unions and employers — are better placed to represent workers’ interests.

“My feeling is that people with low incomes would rather prefer to work longer hours and get higher wages rather than working fewer hours and possibly having also reduction in income,” Boeri added.

There’s a risk that while the five-day-week was the product of workers’ struggle, the three-day weekend is at best an upper-middle-class issue. “I’m quite concerned that it could be something like that,” said Boeri.

There are also implementation issues. In a highly interconnected economy, changing opening hours can represent a first-mover disadvantage for smaller, export-oriented countries, or between competing firms.

The type of adjustments required would also be unpalatable to many: businesses fear increasing personnel costs; workers, wage cuts; consumers, higher prices or reduced service levels. Gomes argues that’s politics’ job.

“There can be disagreements, and then political parties could implement it in different waysthis part is the part that we can negotiate, and we should negotiate,” he said.

Going ahead

Without needing to bother Marx or Keynes, many people are already doing it. Enterprises are slashing hours, from Spain’s Telefónica telecoms giant, to Microsoft trials in Japan — down to small-scale businesses in all sectors.

At the onset of the pandemic María Alvárez decided to cut hours from 40 to 35 while keeping wages constant in the restaurant chain Francachela in Madrid, which she co-founded.

She managed to organize work in four-day shifts in a sector seen as resistant to change, due to the face-to-face nature of the service — while increasing turnover per table by 27 percent, largely by replacing table service with WhatsApp orders.

“It’s maybe something that we could have done without reducing the working hours, but I doubt it,” she said.

In Iceland, the majority of all public employees now work 26-35 hours, down from 40 previously — something which the public employers union BSRB proved could be done while maintaining efficiency of service. The trial showed mental and physical stress, burnout levels and sick leave all decreased, while increasing in the control group. Meanwhile, job satisfaction, work-life balance, productivity (both self-reported and as evaluated by managers) all went up, while dropping in the control group. 

“Here in Iceland, usually families speak of it being like a hamster in the wheel when it comes to family and working life balance,” Sonja Ýr Þorbergsdóttir, chairwoman of BSRB, said, adding: “The shorter working hours kind of help the puzzle work, or being less of a hamster in a wheel.”

Even where laws or employers don’t yet offer the possibility, workers are moving to shorten working hours, often at the price of a wage cut. 

In the Netherlands, half the workforce is on part-time contracts, the highest share in the EU, followed by over a quarter of workers in Germany – among which Benjamin Bräuer, a primary school teacher in Berlin, who cut his hours to 80 percent when his second child was born. 

“It is another way of working because you know you always have a buffer. So if it’s stressful, you can work on Monday, not full time, but maybe half a day. And if not, you can have a nice day. That really makes a big difference,” he said. 

Overcoming the initial resistance can be difficult but worth it, argues Barnes, a self-fashioned spokesperson for the idea at NGO 4dayworkweek.com. He advocates for the 100/80/100 approach: 100 percent pay for 80 percent of work time if 100 percent of output is met. 

“What we’re trying to do is change the discussion from time to output and outcome. And the confusion, I think, is an inflection of old white guys like me, people who run the businesses and hold the view that it is all about time equals output. And it just isn’t,” he said.

This article is part of POLITICO Pro

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