Can we afford a shorter working week? Microsoft think so

Can we afford a four-day week?

Microsoft certainly think so. This week, the tech giant announced that a four-day week trial in their Japanese office had boosted productivity by 40 per cent.

It’s a good example of the win-win effect of reducing working time. Workers on shorter hours work benefit from greater motivation and more efficient working practices.

And while the relationship isn’t totally straightforward, countries with shorter average hours generally see higher productivity than the UK.

UK workers work the longest hours in Europe, but see lower productivity 

The relationship goes both ways.

As businesses use more technology to become more efficient, shorter working weeks are one of the ways these gains have historically been shared with workers.

Higher productivity is one reason why the average working week for all workers (including part-time workers) has almost halved from 62 hours a week in 1868, when the TUC was founded, to 32 today.

And it’s one reason why estimates such as that from the Centre for Policy Studies today that a four-day week would ‘cost the public sector £17 billion a year’ should be taken with a large pinch of salt.

They’ve assumed a six per cent increase in productivity in the public sector to get to this figure. But – as far as we can tell – they’ve not taken any account of the potential for rising productivity gains across the whole economy to help fund a shorter working week for everyone.

For example, the consultancy firm PWC have estimated that “ UK GDP will be up to 10.3% higher in 2030 as a result of AI – the equivalent of an additional £232bn . ” And the Centre for Policy studies themselves estimate that Artificial Intelligence could double growth rates by 2035.

Of course, that may be because they’re assuming that corporation taxes – which help fund our public services – will continue to be slashed. Cuts to corporation taxes announced between 2010 and 2016 alone are estimated to have cost the UK exchequer £16bn a year according to estimates from the IFS.

Government has chosen to let businesses keep more of their profits rather than encouraging them to share those with workers in higher wages or a shorter working week.

In fact, a rough estimate suggests that the public sector workers have lost out on around £16bn of pay through the government’s pay freeze (compared to a situation in which public sector pay had risen with the RPI inflation index).

But there’s nothing inevitable about that choice. 100 years ago, businesses were arguing that the eight-hour day would make production impossible. Just 50 years ago, debates about whether a five-day week was affordable were still common.

Trade unions won the argument then and we’ll win it again.