Dispatch

Canadians will be looking enviously at Iceland’s shorter work week

Iceland's experiment was revenue neutral and saw no loss in productivity

Commuters jam the subway platform at Bloor Station in Toronto during the morning rush hour on Feb. 24, 2016. Graeme Roy/The Canadian Press.

People are tired of working so many hours.

We may not have needed a poll to tell us that, but the Angus Reid Institute confirmed last year that a 30-hour work week sounds A-OK to more than 50 percent of Canadians.

And now, those Canadians will be looking wistfully to Iceland where a trial run of a reduced work week has been described as an “overwhelming success” and led to a sea change in the way people do business in the country.

For five years, about one percent of Iceland’s workforce enjoyed work weeks of 35 to 36 hours with no reduction in pay. Since the conclusion of the trial, 86 percent of Iceland’s entire workforce has shifted to shorter work hours or has gained the right to do so.

Critics of the study have pointed out that it may be a little too optimistic and, since the workers were all government employees, the research may be making an unintentional argument for smaller government.

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Most intriguingly for the employers, though, the experiment was revenue neutral and saw no loss in productivity.

The study took place across a wide range of workplaces, from offices to daycares to hospitals. Workers reported big increases in general wellbeing, especially relating to stress and burnout, and some even detailed health benefits.

But in the U.S. and the U.K., people now work an average of 42 hours each week, with more than 10 percent of people working 50+ hours each week. Canada clocks in with an average work week of 40 hours.

So, the question is obvious: if a shorter work week benefits employees and employers and even society as a whole, why are we still toiling away from Monday to Friday in virtually every country on Earth?

In 1930, John Maynard Keynes expected Britons to be working a 15-hour work week within two generations.

Culture may have something to do with it. For many people, work is simply a necessity, but among the professional classes it has become something closer to a status symbol, with ever-longer work weeks raising status accordingly.

Writing at the The Atlantic Monthly, Derek Thompson dubbed this new culture “workism.”

“For the college-educated elite, (work) would morph into a kind of religion, promising identity, transcendence, and community,” writes Thompson.

This new work culture wasn’t necessarily inevitable.

In 1930, John Maynard Keynes wrote that he expected Britons to be working a 15-hour work week within two generations, enjoying more leisure and family time thanks to the economic productivity gains he predicted in the British economy.

Keynes was correct about the productivity gains that would continue through the second half of the 20th century across most of the western world (in fact, he underestimated them) but he was wrong about the length of the average work week.

But it’s probably unfair to skewer Keynes for his off-the-mark prediction, because it’s not a fair comparison. The quality of life in the 1930s was much lower than in contemporary society and 15 hours of work in today’s economy would likely afford a worker the quality of life of a full-time worker a century ago, with no vacation, few clothes and cramped housing.

It could just be that people value quality of life gains over leisure time, or it could be that we’ve just stumbled along with a 40-hour work week without ever really thinking about it.

The Fraser Institute, a public policy think tank, while remaining broadly supportive of the idea of a four day work week, recently injected some reality into the idea, arguing that if a shorter work week was so obviously better for productivity “one would expect that profit-oriented companies would have already made the four-day work week ubiquitous.”

Rather than assume that a four-day work week would have no effect on the output of employees, especially considering how much harder it would be for younger employees to learn the ropes with less time to do it in, the think tank identified productivity goals that would ease the transition to a shorter work week.

Steven Globerman, a resident scholar at the Fraser Institute, found that a four-day work could be adopted seamlessly by most employers if labour productivity in Canada grows at approximately two percent per year from 2018 to 2030.

In some ways, it’s a lofty goal, because that would double Canada’s current labour productivity growth, but it’s about equal to Canada’s long-run historical rate of growth.

Among a host of other measures, Canada could also remove barriers to interprovincial trade and introduce tax reform, to juice productivity with relatively little cost.

The equation is simple: if workers produce more in the hours they work, they won’t have to work as many hours. With Iceland showing some success with its experiment and world leaders showing some measured support, it might not be the craziest idea.

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