(Prices will rise and neutral inflation rate higher than historically regardless due to structural demographics globally; importantly, labor has power to enact change as the working population cohort shrinks)
We watched everything become 20% more expensive in 2021 and we didn't get an extra day off. I'm happy to try it again if I can get a day off every week. This time I'm prepared, I have a nice mortgage that can be made 20% less expensive in terms of real dollars.
In certain industries, consumers will pay a bit more and shareholders will see lower returns. People work to live, not live to work.
There are already shortages of bus drivers because the pay is insufficient for the work. This is good, because when there is surplus labor, stakeholders will say “thems the breaks.” Better to be perpetually starved of labor and force systems to adapt.
How can we say "consumers will pay a bit more and shareholders will see lower returns"? We just went through an episode of tight labor and it resulted in high inflation in the US and companies recorded blockbuster profits by pursuing a price over volume strategy.
Of course, it also coincided with a supply chain shock but we ought to be honest that we cannot guarantee a tight labor market will result in Americans being materially better off.
Where else would business squeeze the P&L in the face of increased cost of labor? Prices go up, profits go down, or some combination if the business is to continue as a going concern.
With global markets what will end happening is that 4-day work jobs will not be able to compete with 5-day work jobs. The consumers will buy the things that are cheaper.
And besides, why do you need a government to mandate that and force people to do it? They aren't any laws forbidding working less and both parties can decide that a particular contract covers a 4-day work week.
It's a bad idea to regulate something that don't need regulation.
Bus drivers and line workers are also among the lower fruit for automation. Increasing their price could be what’s needed to push us into a higher-productivity state.
Let's look at this the other way, everyone gets a 20 % wage cut and we maintain current prices. On the one hand we would have additional demand for labor to do the 20 % of work, on the other hand we would have a 20 % drop in demand, so there might not even be a demand for additional labor pulling wages up. I would expect a relativ shift towards essential goods but I do not see how this could incentivize more automation.
> Everyone gets the same pay, and prices stay the same. Shareholders see lower returns, but them's the breaks
This gets attempted once a generation somewhere in the world. The problem is when you devalue capital, it isn’t maintained. The only way your equation balances is with a massive jolt to TFP. There isn’t a free lunch in reducing labour; we must be realistic about the tradeoffs involved.
Same prices and same wage does not work, because your wage now only produces 80 % of the products compared to before. If someone is syphoning off 20 % of your labor for nothing, then I am all with you and this should be brought to an end, but I fail to see how working a day less each week could be an effective tool to achieve this.
Working 20 % less will cost you 20 % of your living standard, there is no way around that. There may be some jobs where people already effectively only work 4 days and sit around doing nothing for one more day, in those cases you could maintain productivity if the people would squeeze all the work into the 4 days. And that the capitalists would voluntarily eat a 20 % loss seems pretty questionable to me.
Humans constantly living on a discount (labor, climate, energy, etc) and upset when the true cost sets in. Is what it is. Living standards must go down if automation and other non human labor mechanisms can't keep productivity going up as total fertility rate [1] and populations [2] decline.
I believe we agree organizing and unionizing is mostly the path to success here, due to unreasonable consumers and capital investors. Some jurisdictions might update labor law perhaps, lots of emotional and behavioral inertia to overcome though (along with plain ol' extractionist justification and belief systems).
I completely agree with you that we are living well beyond our means. And working less would be a way to lower our footprint, but that is probably not what most people have in mind when they consider a 4 day week. I also think it would not be the best choice, I think it would be better to not reduce the amount of work we do but instead of using the 5th day to produce more stuff we use it to produce better stuff with a smaller footprint.
I think nursing is one sector I could see directly translating shorter work weeks to higher costs. Something like bus drivers you could remove part of services. With factories labour should not be significant part of cost compared to raw materials.
In many areas you could just provide less hours of services, thus lower costs. But in some this is just not possible and those will cost more.
Or would it? Perhaps running easier shifts and staffing better to handle things like employees on sick leave, would lead to less attrition, fewer sick employees, and better job satisfaction.
If you can convince the employees that you're on the same team, they might also be more open to communicating inefficiencies like "this process is crap, if you change these steps you'll have fewer defects and the line will run faster". Saving EVEN MORE money and time.
That is certainly a possibility but I have doubts. If you could gain 20+ % percent of productivity be making your employees work 20 % less, it would be stupid for any company to not do this. What seems more likely to me is that you can gain a few percent which would make the overall impact less than the full 20 %. Making processes better and so on seems mostly unrelated to me, that you could also do with a full work week.
Some things may get more expensive, and maybe that's fine. Inflation is a thing, and things become more expensive all the time; hell, over the past couple years, things became a lot more expensive, and we didn't get anything good in return for it, like a shortening the work week.
Production lines don't need to run 24/7. Advances in automation, and productivity in general, could also close the gap.
I'm so tired of this idea that the point of life is to produce more and more and more. That degenerates into the point of life being to work and work and work. It's dumb. Human lives could be so much more.
As far as I can tell all those links you posted were case studies involving public administration jobs and bureaucracy. Parkinson's Law is explicitly about this.
It is not at all clear if (or how) productivity would go up in most other jobs, including construction, factory work, barbers, nurses, garbage men, chefs, etc. While technology may make it possible that people are productive per hour, there is no study or even pathway for how a chef (for instance) could produce more meals in 32 hours than 40.
https://www.4dayweek.com/casestudies
https://hn.algolia.com/?q=4+day+week+success
https://en.wikipedia.org/wiki/Parkinson%27s_law
https://www.economist.com/news/1955/11/19/parkinsons-law
(Prices will rise and neutral inflation rate higher than historically regardless due to structural demographics globally; importantly, labor has power to enact change as the working population cohort shrinks)