If Cutting The Work Week By 20% Means More Productivity, Why Not Cut It By 50%, Or More?

If Cutting The Work Week By 20% Means More Productivity, Why Not Cut It By 50%, Or More?

Should California workers work fewer hours in the work week?  Some state lawmakers say yes.

Under Assembly Bill 2932, the work week for companies with more than 500 employees would fall to 32 hours. Those working more than eight hours a day and 32 hours in a given week would receive overtime pay.  The California Employment Development Department says 2,585 employers would be affected.

Surprisingly, AB2932 would not apply to unionized employers. Assemblymember Cristina Garcia, a Democrat from Bell Gardens, said the exemption was included because “collective bargaining often results in better employee benefits than the floor that we’re setting with this bill.” But that might be a smokescreen to cover preferential treatment.

“If unions negotiate better terms, the bill would not constrain them at all, so there would be no reason to exempt unions except for giving them special favors,” says Gary Galles, Pepperdine University economics professor.

The bill “also utilizes the ‘raising rivals’ costs’ strategy,” he added, in which competitors’ costs are increased. In the case of AB2932, unionized companies and their workers become more appealing as costs borne by non-union workers and firms are raised. It’s a sneaky way for policymakers to advance unions’ interests at the expense of others.

As one would expect, AB2932 is being presented as pro-worker. The Los Angeles Times reported that “​​Garcia and other proponents say a four-day workweek would lead to an increase in productivity and profits, and point to case studies already underway in Iceland and at companies such as Kickstarter.”

National Public Radio reports that Iceland’s abbreviated work week, initially tried on about 2,500 public-sector employees in a pilot program, “improved well-being among workers, with no loss in productivity. In fact, in some places, workers were more productive after cutting back their hours.” CNN reported last summer that “​​trials of a shorter working week in Iceland have been hailed as an ‘overwhelming success’ by researchers.”

If that were universally rather than provincially true, then wouldn’t U.S. businesses be rushing to cut workers’ hours on their own, without government forcing them to? There’s no law that says they can’t. But we’re not seeing that. Is it possible that in a country as large as the U.S. – or in a state that would be the world’s fifth-largest economy if it were its own nation – significant portions of the economy, which is more diverse here than anywhere else on Earth, are incompatible with a compressed work week?

Humanity being what it is, there are no guarantees that productivity will be boosted if their work weeks are shortened by 20%. Will the average brick mason’s well-being will be so improved thanks to a new schedule that more bricks will be laid in 32 hours than in 40? Or even the same number of bricks, which would count as an increase in productivity? Will factory workers assemble the same number of widgets in 32 hours as in 40, or will truck drivers make a similar number of deliveries?

Many businesses are struggling to fill vacancies these days, with existing workers having to pick the slack to meet customer demands.  A new 32 hour work week mandate would make this problem even worse and could lead to higher prices, longer wait times for services, and fewer products on store shelves.  It’s also not hard to imagine that redefining the work week will be yet another incentive for businesses so tightly bound by the government harness to leave California.

Legislators truly interested in freeing workers would instead of mandating a shorter work week repeal 2019’s Assembly Bill 5, which outlawed most gig work before some exemptions were granted based on political influence. Prior to AB5 becoming a barrier to opportunity, independent contractors were making their own hours, working as much or as little as they needed or wanted to, and most were happy with their arrangements. Yet rather than liberate workers, government again is going to try to improve their well-being with a law that will hurt rather than help them.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

 

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