The Missing Ingredients for a Four-Day Workweek: An Idea Whose Time has Not Come

Commentary, Immigration, Paz Gómez

The COVID-19 pandemic has ushered in a wave of demands to fix every inconvenience of life by government decree. The four-day workweek, an old darling of social engineers, has made a comeback as governments pick up the pieces of locked-down economies.

On June 15, the rural District of Guysborough, in Nova Scotia, started a nine-month trial in which 60 public servants will work four days a week, however, they will still total 40 hours. The British Columbia premier is considering a similar work schedule.

Prime Minister Justin Trudeau is open to it, among other “creative ideas” at the federal level. Similarly, New Zealand’s prime minister suggested in May that employers shorten the workweek to stimulate domestic tourism. In the United Kingdom, legislators have penned a letter urging the government to look into the policy.

However, the shorter workweek’s promise of rekindling the economy puts the cart before the horse. Just as the weekend resulted from the Industrial Revolution’s productivity boost, a shorter workweek will not be possible until the economy can sustain it.

Let Employers, Workers Find Common Ground

Alternatives to the status-quo workweek, such as contract-based or seasonal work, are decades old. The gig economy, where workers decide how many hours to put in through an app on any given day, now enables short-as-you-want workweeks.

In today’s highly diversified economies, pushing for a one-size-fits-all solution is a fool’s errand.

If the goal is to tackle Canada’s high working hours, allowing employers and employees to set their own terms is key. A recent report by the software company Citrix called The Future of the Working Week explored the many options available.

The firm conducted a cross-country survey in September 2019. It collected responses from 3,750 workers across the United Kingdom, France, Germany, Italy, Mexico, Sweden, Norway, Denmark, and Canada. Citrix requested information on how much time employees spend at work and their contract terms.

According to the study, 64 percent of Canadian respondents had regular working hours with no flexibility, and only 11 percent enjoyed complete flexibility at work. In contrast, Germany had the lowest level of inflexibility (23 percent), and Denmark had the highest level of complete contract flexibility (34 percent).

According to OECD employment and labour-market statistics, German workers on average spent 1,363 hours at work in 2018, whereas Denmark workers spent 1,392 hours and Canadian ones 1,708 hours.

The data suggest that flexibility in labour contracts successfully reduces working hours. The more flexible the labour law, the more alternatives contracts can include. Compensation is not the be-all and end-all for workers. Given the choice, some will gladly accept more leisure time.

Ten-Hour Work Days?

The hidden tradeoff of a four-day workweek is overtime. France, for instance, has its famous 35-hour workweek. Nevertheless, over half of French workers put in paid overtime. Businesses are not in a position to face higher labor costs nowadays.

Most Canadian respondents of the Citrix survey said a shorter working week might lead to more overtime. All things being equal, the workload will not go down unless companies find a way to do more with less.

In a 2018 Angus Reid poll, 68 percent of Canadians said they would prefer to work four ten-hour shifts per week. However, they would like to work even more hours for more pay, taking additional jobs. This suggests there is an appetite for more work, not less.

Unleash Productivity

The dream of a three-day weekend is not too far off, however. A June 2020 study by the nonpartisan think tank Fraser Institute estimated Canadians could enjoy a four-day workweek in 2030—if they double their productivity.

For the Canadian economy to sustain a four-day workweek, productivity must increase by 2 percent each year over the next decade. The report, Reducing the Work Week through Improved Productivity, points to historical records showing Canadian workers are capable of sustaining such a rate, although it has lagged behind in recent years. Productivity in Canada grew by 1 percent annually from 2000 to 2018.

“If governments pursue policies that encourage entrepreneurship and innovation, worker productivity will rise and Canadians will be able to enjoy more leisure time,” said the report’s author, Steven Globerman, a professor emeritus at Western Washington University.

Canada has the potential to secure a shorter workweek for its citizens by identifying and addressing the causes of the productivity slowdown. Low-hanging fruit are internal barriers to trade, burdensome taxes, and anti-competitive regulation.

Striking a work-life balance leads to healthier, more creative, and motivated employees. Government has a role to play in creating the conditions for a vibrant labourforce by enabling smart work, not experiments that could stall entrepreneurial activity when it is most needed.  

 

Paz Gomez is a research associate with the Frontier Centre for Public Policy.