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The Economics of the Four Day Workweek
Imagine going to a job interview and the hiring manager saying ‘You don’t want to work on Fridays? No problem. You’re hired.’ Does it seem likely? Pre-covid, probably not, but today, it might just happen. Since the world was abruptly thrown into a covid-induced work-from-home (WFH) situation, workers and managers have been rethinking and reimagining the workplace of the future. Throw in post-covid high inflation and a tight labor market and you have the recipe for a potential new workplace norm -getting paid for a 40 hour workweek while only working 32, maybe from home.
That’s right. Some companies are now viewing the traditional in-person 40 hour workweek as something that might not fit with today’s economy. With workers in short supply, employers are looking for ways to not only keep their valued staff, but also attract strong applicants. Enter the four day workweek where employees work 32 hours – sometimes in-person, sometimes WFH- but get paid for 40. While normally extra paid days off are viewed as an expense, some employers are now seeing them as an investment in their labor force, helping to increase employee loyalty and promote wellness that is then converted to greater productivity. Will working smarter, but shorter, possibly from home, become the new norm? An extra 52 days off a year seems like a great incentive.
Discussion Questions:
- The benefits of a four day workweek are clear from the perspective of the employee. How does it benefit the employer?
- Discuss the economics of a four day workweek. What societal benefits does it bring? Can the concept be successful if not all members of the economy can participate?
- Is it realistic to think that an employee could accomplish a similar amount of work in 32 hours as in 40? Do hours worked always directly correlate with output hours?
Sources| LA Times: https://www.latimes.com/california/story/2022-12-16/four-day-workweeks-not-as-crazy-as-it-sounds; NPR: https://www.npr.org/2022/06/07/1103591879/a-big-32-hour-workweek-test-is-underway-supporters-think-it-could-help-productiv; CNBC: https://www.cnbc.com/2022/12/09/us-4-day-workweek-trial-results-no-one-is-going-back-to-normal.html; Euro News: https://www.euronews.com/next/2022/12/19/the-four-day-week-which-countries-have-embraced-it-and-how-s-it-going-so-far; Unsplash: https://unsplash.com/photos/zTifOu0tAbc
