Shorter Workweeks Do Not Increase Employment. Published on Cronista.com
Workweeks were shortened in core countries, but employment did not increase, and wages needed to be adjusted.
In France, Lionel Jospin of the Socialist Party became Prime Minister (1997 – 2002) promising to shorten workweeks from 40 to 35 hours, i.e. 7 hours per day five days a week. After six months in office, the rate of unemployment continued to rise, and curiously enough, there was an increase in employee moonlighting where people held one full-time job and another part-time position, or work two part-time jobs. In addition, salaries declined in proportion to shorter hours, and it took more than four years to go back to comparable values. This all happened in a country with a growing economy and «zero» inflation.
Argentine collective bargaining agreements determine all wages by the hour, per day, or per month, including the Minimum Wage. Consequently, shorter working hours would imply a reduction in income, in a context like today’s where wages are not enough, which would be catastrophic.
Lawmakers who promote shorter working time assume that the vacant hours would be filled by hiring more people, and have made all kinds of calculations to claim many hundreds of thousands of new jobs could be created. They seem to forget that we are living in the 4.0 Era, where human labor is largely replaced by AI. Actually, our legal system of 8-9 working hours per day and 48 working hours per week has already changed as a result of an average of 44 working hours in general.
Remember that despite the fact that the Argentine provinces do not have authority to determine the number of working hours locally (it is up to the National Congress according to Section 75 subsection 12 National Constitution), they have already shortened workweeks to 44 hours based on the argument that regulations can be passed to determine business opening and closing hours.
Great Britain is experimentally exploring shortening their workweek from five (5) to four (4) days. It is a test to check if the same level of productivity is maintained, though. This is not the case in our country. Sector-by-sector measurements show that except for two of them, productivity has declined in the last 11 years. In those sectors where productivity rose, it was due to the inclusion of exponential technologies, IT, robotics and generalized automation.
Countries with less than 35-hour workweeks show extraordinarily high levels of computerization, robotization and connectivity.
This is the case for Norway, whose workweek is 33.5 hours; Denmark with a 34.5-hour workweek, and Finland with a 34.9-hour workweek. In these countries, the per capita income is also among the highest on the planet.
There is Germany with a 35-hour workweek, Iceland with a 35-hour workweek, Sweden with a 35-hour workweek and France with a 35-hour workweek.
All these countries reach a total of 1680 working hours per year, as compared to countries like the United States where they work more than 2000 hours per year, with 4-week vacation time. In Argentina workers work around 2000 hours per year in the service sector, and 2300 hours per year in the industry, with four-week vacation time only if they have more than 20 years’ seniority. Strictly speaking, only 13.7% of registered employees have more than 20 years’ seniority in their job position.
For this change to happen, the national economy should be on the rise, with zero inflation, so that companies can adapt not only their working time system but also their productivity levels.
Even if the provisions of the collective bargaining agreements are not amended, many of them take the historical legal parameter of 8 or 9 hours per day and 48 hours per week. So many agreements should adapt their terms and conditions to new parameters, which become public order. In any case, shorter working hours will harm workers and companies alike, based on the myth that it will increase employment.