5. UNEMPLOYMENT BENEFIT?
One supposed benefit of shortening the working week is reduced unemployment. This was why working weeks were reduced in the US in the 1930s – which was reasonable, given that unemployment was 25 per cent in 1933.
Today, unemployment in the UK is 3.7 per cent, the lowest in more than 20 years. In Ireland it is 4.7 per cent, while long-term unemployment is a negligible 1.2 per cent. As the Irish Times recently said: “There are loads of job 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 over five days).
Such a reduction would exacerbate labor shortages. It would also squeeze public finances – for example health services would require more staff, thus raising the wage bill.
A four-day week would also put extra demand on leisure services. Imagine wanting to spend 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 happening already.
There are other less risky ways to improve working conditions that may be more effective. These include flexible retirement schemes and more official vacation days and bank holidays. Or if governments provided better support for innovative entrepreneurs, it could stimulate productivity growth, job satisfaction and decarbonisation in one sweep.
Wim Naudé is a Professor of Economics at University College Cork. This commentary first appeared on The Conversation.