Trials of a four-day working week have found that the strategy holds huge benefits for businesses including increased productivity and well-being, writes Professor John Quiggin.
MORE THAN 150 years ago, workers in New Zealand, closely followed by Australia, were the first in the world to secure an eight-hour working day. And 75 years ago, we achieved that great boon - the weekend.
Over subsequent years, until the 1980s, we saw a steady reduction in standard hours of work, including the achievement of four weeks of annual leave, widespread long service leave and the reduction of the standard work week to 38 hours. Thanks to sustained technological progress, productivity and living standards improved steadily over this period.
The decades since the 1980s have seen further impressive technological advances, most obviously in information technology. The rise of artificial intelligence (AI) is just the latest example. Yet there has been no general reduction in standard working hours in more than 30 years.
This may finally be about to change, with New Zealand again taking the lead. After successfully implementing a four-day week in their own company, New Zealanders Andrew Barnes and Charlotte Lockhart established 4DW Global. As the name implies, the organisation has promoted the idea of a four-day week in a number of countries, primarily by helping companies and other organisations to implement pilot programs.
The central idea of the 4DW approach is summed up as 100-80-100. That is, workers receive 100% of their previous wages while working 80% of previous hours and attempting to maintain 100% of previous productivity.
Initial results from trials in Australia and New Zealand have just been released with very positive outcomes. The trial was undertaken by 26 companies in sectors including professional services, marketing, manufacturing and construction. All but one indicated an intention to maintain the four-day week after the end of the trial.
Companies rated the impact of the four-day week to attract new employees at an 8.3/10, with productivity scoring a 7/10 and performance a 6.8/10. The big productivity gains, offsetting the reduction in standard hours, were improved staff retention and reduced absenteeism.
Employees were even more positive, there was a big increase in self-reported productivity with over half (54%) of workers reporting an increase in their current work ability compared to their lifetime best. Almost all participants (96%) reduced their work time, with 88% getting one full additional day off per week.
When asked how much additional pay they'd require in their next job to go back to five days, 35% of employees said 26-50% more, 9% would require more than 50% and over one in ten (11%) say no amount of money would induce them to go back to five days.
The success, so far, of the push for a four-day week represents a sharp contrast with decades of neoliberal policy aimed at encouraging us to work longer and harder hours. Two factors have played a central role.
First, progress towards reduced working hours and better conditions only takes place when the balance of supply and demand in the labour market favours workers. This was true for the Victorian stonemasons who first won the eight-hour day in Australia and it is true for large groups of workers today. By contrast, managers, whose working conditions are usually comfortable, typically prefer to undertake longer working hours and to make their employees follow suit.
Second, the experience of the pandemic showed us that just because particular ways of working have been around for a long time, it does not imply that they are the only possible way of doing things, let alone the best. We rapidly discovered that for most kinds of information work, it wasn't necessary to turn up at an office five days a week. Against their will, in many cases, managers have been forced to adapt to a world in which a large proportion of their workforce is out of sight much of the time.
The rise of remote work and the shift in the balance of power in the labour market has, for the most part, forestalled the dystopian possibility in which managers maintain close surveillance over remote workers on a 24/7 basis. Instead, workers have gained more autonomy over how and when they do their work, and have been able to set and maintain boundaries between work time and home time. In these circumstances, it's not surprising that many want to get their work done in four days, rather than five.
The shift to a four-day week has the potential to improve our lives in ways that go beyond an increase in leisure time. Gender balance should be improved, partly by making full-time work a more feasible option for many women. The increase in hourly pay rates implied by a four-day week should flow through to part-time workers, primarily women.
Shorter working hours can also encourage men to take a more active role at home. The 4DW survey found that 27% of the men in heterosexual relationships increased their share of housework and 17% of men in heterosexual relationships increased their share of childcare. Environmental and health benefits will arise from reductions in time spent commuting (around 36 minutes per week on average) and increases in time spent on exercise (30 minutes per week).
The shift to a standard four-day week is long overdue, given the technological improvements of the last four decades. While it is still in its early stages, it seems likely to become a reality sooner rather than later.
John Quiggin is Professor of Economics at the University of Queensland. His latest book, 'Economics in Two Lessons: Why Markets Work So Well and Why They Can Fail So Badly', is out now from Princeton University Press. You can follow John on Twitter @JohnQuiggin.