5. UNEMPLOYMENT BENEFIT?
A supposed benefit of shortening the workweek is reduced unemployment. This was why working weeks in the US were shortened in the 1930s – which was reasonable considering that unemployment was 25 percent in 1933.
Today the unemployment rate in the UK is 3.7 per cent, the lowest in more than 20 years. In Ireland it is 4.7 percent, while long-term unemployment is a negligible 1.2 percent. As the Irish Times recently said, “There are loads of vacancies in Ireland, but where are the workers?”
When labor markets are so tight, it would be strange to reduce the labor supply by cutting everyone’s working hours (unless, of course, workers managed to be as productive as more than five days).
Such a reduction would exacerbate the labor shortage. It would also put pressure on public finances – health services, for example, would need more staff, driving wage bills higher.
A four-day working week would also make extra demands on the leisure services. Imagine spending your extra time traveling for a long weekend away, only to end up in long queues at Heathrow or Dublin airports. Oh wait, this is already happening.
There are other, less risky ways to improve working conditions that may be more effective. Think of flexible pension schemes and more official holidays and public holidays. Or if governments would better support innovative entrepreneurs, this could boost productivity growth, job satisfaction and decarbonisation in one fell swoop.
Wim Naudé is professor of economics at University College Cork. This commentary first appeared on The Conversation.