The 4-day work week with Juliet Schor

Disclaimer We'd like to advise that the following program may contain real news, occasional philosophy, and ideas that may offend some listeners.

Sandra Most of us feel like we're working too much. To be fair, we have come a long way since the 1800s, when many people worked over 10 hours a day, six days a week. By the middle of the 20th century, most full-time workers were down to a 40-hour week - that's eight hours a day, five days a week. But over the last 50 years, outside of Western Europe, hours of work for full timers have really increased. We usually work more than 40 hours a week and 16% of us clock more than 50 hours a week, putting us Australians in the company of other overworked countries like Korea and Japan and the US. So over the last few years, there's been a move to introduce a four-day work week. Currently, organisations in six countries are conducting trials where employees work four days a week but receive five days' pay. More than 200 organisations and thousands of employees in the US, UK, Canada, Australia, and New Zealand are involved in this pilot scheme. So what difference does a four-day work week make to people, productivity, and profit? What difference would it make to the community, to the environment, if a whole lot of us turned up for work four days instead of five? Professor Juliet Schor is an economist and sociologist at Boston College, who has been studying workplaces for more than 40 years. Juliet's TED talk on the case for the four-day work week has been viewed almost 2 million times, and she's one of the world's leading authorities on working time. Her 1993 book, 'The Overworked American', was a best-seller and started intense academic and popular debates about what we should be doing with our time.

Intro From the University of Sydney Business School, this is Sydney Business Insights, an initiative that explores the future of business. And you're listening to The Future, This Week, where Sandra Peter and Kai Riemer sit down every week to rethink trends in technology and business.

Sandra Juliet, welcome to The Future, This Week, and thank you for extending your working hours over there in Boston to join us today. I'm pretty sure you're extending your working hours to be doing this.

Juliet Schor Pleasure to be here.

Sandra Let's talk a little bit about some of the key features of the four-day work week. I think many people have different conceptions of what it is and what's it for. So what is it?

Juliet Schor Well, I think they've got different conceptions, because it's possible to do it differently. So there are what are called four-day compressed work weeks where people work for 10-hour days. So no reduction in hours, just a reduction in number of days. There are 32-hour four-day weeks, where people take a pay reduction - typically they would get an 80% pay for, you know, doing 80% of the days. And the trials that I'm involved in and that many people around the world are excited about, and that we've got going on in Australia, New Zealand at the moment, are four-day work weeks with five days' pay. So there lots of different ways to do a four-day work week.

Sandra So where is this being currently trialled? You mentioned the trials that you're involved in? Where is this happening? What company, what types of companies are involved in it, what's going on?

Juliet Schor So we began with trials at the beginning of 2022. Five trials have started. Three are still in process. So the first trial was originally an Irish trial. But we had a few other companies, including one, the largest company in the trials headquartered in Australia, a software company, and it's a global company. And then two months later, we started a trial that was primarily US and Canadian companies. In June, the largest trial in history for reduced workweek began, the UK trial. 70 companies signed up I think about 45 ended up starting in June with the others. A few thousand workers. And then August 1st, we started the Australasian, so Australian and New Zealand trial. And October 1st, we started another US Canada trial. And we're currently gearing up for our first trial of 2023, which is primarily a sort of pan-European trial, although it also has a group from South Africa participating, and all of the trials have a little bit of national slippage where companies, you know, might end up wanting to start later in another country's trial or they might end up starting earlier, so they're not technically just for the country or region that is the centre of gravity.

Sandra Can we clarify the types of companies that are involved, because people somehow assume that it must be tech companies. Right? And you did mention an Australian software company, but they assume it must be tech companies doing this, right? No one else would dare to try.

Juliet Schor Yes. And there are a lot of tech companies and people in those tech occupations are the biggest group in the trials. However, there is an increasingly wide range of companies and organisations because we've got a good number of non-profits also, who are a part of this. So tech, design, marketing, finance. And you see, I'm still in the white-collar world, but now I'm gonna start talking about healthcare, restaurants. In the first two trials, we had one construction firm, one manufacturing, retail, there's a local government in Tasmania, which has joined one of the trials. We're in negotiations with a big hospital chain. I've been having conversations with a university that is planning to do this.

Sandra I hope it's our University.

Juliet Schor No, but you know, you could get that going. I did a radio show recently with a guy who's the head of a custom T-Shirt Company. So it's a kind of manufacturing, and they've had a tremendously positive experience with the four-day week. So it's, it's very wide in terms of who's doing it, although it is kind of centred in tech. And certainly, the vast majority are white collar companies.

Sandra You've mentioned a few sectors there, that sound really like there's no way you could try a four-day work week. You mentioned healthcare, you mentioned retail, you mentioned restaurants there. How are those trials looking? And what was the experience in those industries?

Juliet Schor Well, we didn't have a healthcare in the first two. The much bigger group of companies that we have in the third trial gave us more diversity. The restaurant chain, they're very positive about it, but they also have had some challenges. And their plan was for a two-step process. Their managers at the beginning of the trial worked 55 hours a week. So we were talking about a big reduction down to the sort of mid-40s. And then the second wave was going to be the waitstaff. As it turned out, they were opening a big new restaurant at the time they started the trial. So it complicated things. But I have talked to other restaurant owners. I had a really nice chat with a woman in Spain who has a big restaurant in Madrid, and they put everybody onto a four-day week during the pandemic. And it worked really well. And I just yesterday received something from a restaurant owner in Colombia, in Latin America, and she wants to take her company to a four-day week. So you can do it. I think the big difference across some of these industries is whether or not you can implement the model that the 4 Day Week Global, the organisation that's running the trials, and that I'm working with, which was started by Andrew Barnes and Charlotte Lockhart of New Zealand - they have what they call the 100-80-100 model. So you get 100% of your pay, you work 80% of the time, but you're 100% as productive as you were in five days, but you just do it in four. And the key to this is work reorganisation. So for a couple of months before the trial begins, we give workshops and counselling and coaching and peer support and mentoring and all these sorts of things to these companies. So they can go through this process of figuring out, what can we change? What are we doing that is wasting time? What are we doing that's negative? What are we doing that isn't productive? Let's change that. Get it off people's desks, change the culture. So that actually by reorganising work and cutting out all the wasted time, people can achieve that 100% of productivity in 80% of the time. And that was the experience that Andrew Barnes had in his company, Perpetual Guardian. It's the experience that many companies in their trials have had. The biggest places they find are things like changing the meeting culture. Meetings absorb a tremendous amount of time in many workplaces, particularly in white collar workplaces, and fewer meetings, shorter meetings, more efficient meetings, fewer people at the meetings, et cetera. You can save a lot of time like that. Some of the companies have systems for reducing distractions so that people can actually get tasks completed more quickly. One company in London has a stoplight system, and everyone has a light on their desk. Green means 'come and talk to me I'm available', yellow means 'you can interrupt me, but it better be important', and red means 'don't you dare come anywhere near my desk'. So by reducing the distractions of other people, which are particularly acute in these open-plan offices and so forth, where people can't just close the door, they can save time. People shift personal appointments, like doctor's appointments to the 'off day', so they can gain some time back there, they reduce sort of goofing off during the day, like checking Facebook or whatever folks are doing a little bit of. So that's one model 100-80-100. The other one I like to call the 100-80-80. And that's for the kinds of workplaces where people are not wasting time, where they're actually working at high intensity, they're pretty stressed and burned out, and you can't take five days of work and turn it into four. I mean, you can maybe get a little bit of efficiency, but I think it's hard to squeeze a whole day out in certain kinds of workplaces. Healthcare's, like a prime case, think about nurses and all.

Sandra I was gonna say healthcare, right, people are overworked as it is, the pandemic has done nothing but accelerate the road to burnout, and so on, the idea of getting them to work a bit harder, does not seem like the right place to start.

Juliet Schor Right. Teachers are a little bit like that, flight attendants. You know, there are a range of industries where people have been sped up and intensified in ways that are unhealthy and actually impairing the quality of the services they're providing, in many cases. That's why I say 100-80-80. 100% of the pay, 80% of the time, 80% of the work. That means those organisations have to hire new people for that last day. And we're in a world now where the economics of doing that are a lot more favourable than they used to be. So why is that? If you have trained people who are leaving, because they're burned out and stressed out, et cetera, it's very costly to replace them. It's getting very difficult for many organisations to replace people. Part of the impetus for some of the organisations that are coming to us is they're sitting with lots of unfilled positions, they can't get people. So you save the costs of resignations, hiring and training, you create a competitive advantage in the labour market. And the economics of that turn out to be a lot more favourable. There's a famous study in Sweden, Gothenburg, of nurses in a care home, who were given a six-hour day and they hired additional staff to cover the extra two hours. And what they found was there was a little bit of expense, this was some years ago. So I think the economics are much more favourable now. The only reason it was a little bit of expense was they saved on unemployment benefits, they save on health care costs, they saved on training and recruiting and so forth costs. And the nurses' health was a lot better, job satisfaction, et cetera. And patient outcomes were a lot better, because the nurses were less stressed and could, you know, care for patients better. So I call it the paradox of work intensity, which is, the lower intensity workplaces and the higher intensity workplaces are the ones where I think the economics are most favourable at the moment. And then, you know, over time, I think we'll get to more and more of those in the middle.

Sandra I want to stay a little bit with productivity. But before that, I might ask you in Australia, over a third of our workforce is part time, with around the quarter of that not doing so voluntarily. What would the four-day work week mean for them?

Juliet Schor So it depends. Some of the companies that we're working with, if they have part timers who are sort of four days, for example, they'll just make them full time and give them that extra 20%. Because now, you know, they're doing the same as what the others are doing. Where you have people working one day or something, usually there'll be some kind of a pay adjustment, particularly if there are a lot of folks in this category, to make sure it's not just something that only the full timers get. So that's one thing. If we think about the larger macro impacts of this, if you're on the 100-80-100 model, it doesn't open up employment because people aren't doing as much work as they were before. There's not necessarily a reason for the firm to hire more people. However, one of the things we're seeing is the firms in our trial have a big revenue increase from the prior year. They are hiring. So they're growing to the extent that it creates a healthier company, it could lead to more employment, and some of the involuntary part timers could end up getting more work. But you have to be careful when you think about the impact of shorter work time on employment. I think people used to think, 'Oh, you'll be in that 100-80-80 model that I talked about where you've got to hire 20% more people', and you know, what we've seen over many decades is that productivity tends to rise on an hourly basis, when hours are shorter, so that undermines some of the increased labour demand that you might have.

Sandra What's the right level to have this conversation at? Because we seem to always have the four-day work week conversation at the company level, at the enterprise level. But how does this change how we think as a society about how long we should be working? Or what we should be doing? And how do we get kind of meaningful large-scale change? Is that the role of the government? Do we need to think about regulatory support to get really widespread change beyond pilots? What's the right level to think about it?

Juliet Schor Well, we probably need to be thinking about it at multiple scales at the moment. So to get all the way to say a 32-hour standard work week, without pay reductions, that has to be done at a national level. You know, in Europe, maybe it has to be done at a European level. And historically, there was more national-level work time policy, although not only, in places like the United States, we have state-level. You know, in my country, for example, in 1938, we put in the fair Labour Standards Act, which enshrined a 40-hour standard work week, and other countries have standard work weeks. So I think we're gonna get there. And I think we're gonna get to a 32-hour week, but we've got a road to travel from where we are now to there. I think one of the reasons the energy is at the company level at the moment is that it's been very difficult to enact innovative - and I would say a move from 40 to 32, is a breakthrough - policy for labour in many countries - and so you've got a big pent-up demand for work time reduction, without having to bear the costs of short hours. So you can get a short hour job almost anywhere, but it has huge costs - they pay less, they have fewer benefits, they don't have career mobility, for the most part. I mean, there are exceptions. But on average, that's the case. So can we move to a world in which there are good, upwardly mobile, well-paying short-hour jobs? And the answer to that is we're gonna need regulation and maybe multiple kinds of regulation, not just a change in the standard work week. One of the things that happened in my country is that if you worked more than 40 hours, you got pay-and-a-half. A lot of workers wanted that. So full time workers actually had a longer work week than 40, for a good part of the, you know, many decades, like the 50 years after the FLSA was passed. So the Dutch have a law which says you have the right to reduce hours in your current job without career penalties, for example, except under circumstances where the employer can show there's no way they can do it. There are a number of different regulatory and legislative paths to take. We also have at the moment, countries beginning to pilot four-day weeks. The Spanish, I think the Portuguese have probably announced by now, but they're in the process of putting together a pilot where the government is subsidising companies who are trying this out. And one of the things we know about making big legislative changes is you need to have you know, proof of concept, you need to have either states or regions or companies or people who have done these things and show that they work before you just, you know, jump in with both feet.

Sandra Are there some built-in assumptions to these proof of concepts that we might want to challenge? We spoke earlier about productivity, but is it okay for productivity to fall in some of these things? And you know, should we think about productivity in more varied ways?

Juliet Schor Well, certainly my 100-80-80 model is a reduction in productivity from 100 to 80. And my answer to that is, yes, each individual should be doing less, they should be de-intensifying or, you know, slowing down in a certain way. And I think that's feasible. The point of a proof of concept at this point, I think, is, it's going to be hard to get something through, if it seems like you know, most businesses are going to have a hard time with it, that it's going to undermine their viability, because that undermines employment. You don't want to put in changes that will make it impossible for business. And part of what we're showing is not only that they can do it, they're really happy doing it and they're thriving with it. But you know, we've got the easy, the low-hanging fruit as it were, you know, we've got companies who, who think they can do this and opt into our trials. In some sense, it's not surprising, I think they probably have a pretty decent sense, before they do it, that it's going to work out for them. But, that being said, it's also the case that the national regulatory and legislative context and the competitive context, which is influenced by that, also determine how viable or not viable it is. So, you know, the government can pass laws that make it very difficult for companies to overwork their workers. And the other thing is there are the competitive pressures - if lots of companies start going to four days, it gets difficult for the five-day companies to attract workers. Let me tell you, we have data showing that people who join these trials and go to a four-day week, say they would require a lot more money to go to a job with five days, and there's a fraction of them, not teensy, that say, 'no amount of money will entice me to go back to five days'. So you know, as it starts to get established, it becomes very valuable to people, and then companies have to adjust, and they will. And one last point about this, that's really important. It's part of why I think this is a time when going to a four-day week is feasible for companies. And that has to do with the fact that there's so much technological change going on, there's so much new digital tools and AI and communication tools, and you know, software and robotics and whatever it is different industries have different kinds of technical change, which is labour displacing, meaning increasing the productivity of each hour of labour. And historically, technical change has been accompanied by shorter hours of work, because it makes it possible to produce as much with fewer hours. And so that ongoing process of technical change, and also, that whole work reorganisation process, is designed to make that technology used better, used smarter, more efficiently, because we get a lot of technological tools in the workplace that we really don't use that well. And so, it provides an impetus to raise the productivity of the new technologies. And the new technologies provide a long-term pathway of work time reduction, which I think we need to get on.

Sandra Whilst I'm really hopeful that increases in productivity might help, I still think on some level we do need governments or some regulatory framework, because I remember when I started my studies, and we did Keynes, and he had written that wonderful essay, like almost 100 years ago, I think it was in the 1930s, on the economic possibilities for our grandchildren. And he had made the prediction that his grandchildren would grow up to work 15 hours a week. And his argument was that thanks to machines and tech and new ideas, people will get more productive, and then they'll decide to work less. And somehow it seems, especially in places like the US and Australia, we've decided to work more, the more productive we got. So maybe there is a case for that and for larger scale intervention. But I want to stay a little bit with the people because it's my understanding that most studies show really great improvement in individual wellbeing, right, we spoke about productivity and profits and so on, but really great improvements in individual wellbeing, mental health, improvements in personal life, you know, happier family life. Does working less make us happier?

Juliet Schor Absolutely. Lots and lots of evidence for that, including from our own studies. And we'll be releasing our first results in a couple of weeks. But the answer to that is we're seeing very significant improvements on a wide range of wellbeing outcomes and health outcomes. Time use outcomes, and work-family conflict outcomes, and outcomes at work and, you know, you name it, pretty much across the board people are just happier, healthier, living better lives. I mean, we've got great data and you know, really exciting results, but the wellbeing findings are also supported by a range of other studies that have been done in the past. You know, the big trial in Iceland, which was extremely successful, a large number of people in Finland, Sweden, Norway who have done trials, most of them in public sector settings, not nearly as much private sector research, but wellbeing, sleep, reduced fatigue, reduced anxiety, stress, burnout, all of those things, those are common findings. And that's pretty consistent.

Sandra I have to ask, what do people normally do on that extra day?

Juliet Schor The biggest thing they do is leisure, hobbies, just doing stuff, hanging out, socialising. That's number one. Number two is housework. And number three is personal grooming, in our studies.

Sandra So on some level, in the long run, would this be a good move for the community? Will benefits flow from the four-day work week to the wider community, not just the companies involved in it?

Juliet Schor I do think it has strong community benefits. In our study, we have a little bit of an uptick in volunteering, which is a good community activity. Just healthier people make healthier communities. And I think it's really good for families, because families are stressed. In a world with two working parent families, and also a lot of single headed households, the time for family and housework is really compressed, as compared to a dual-earner family, with one full time household worker and one full time market worker, and one of the things that people are really articulating is that two days is not enough for a weekend for all the things that people have to do on the weekend. So I think there are strong community benefits. The other thing we've been looking at, but we don't have definitive findings, yet it turns out there are a lot of complications with studying this, are the carbon benefits, so benefits for the climate. And I've done a lot of work at the national scale, and also across states showing that places with short hours of work have lower carbon emissions holding other things equal. And the big story there has to do with the fact that countries that have shorter hours of work have taken more of their productivity growth in the form of leisure time, rather than producing more. So they tend to be slower growing countries in terms of how fast they're growing relative to their potential, you know, so they could put more people into the workforce for more time and expand their output. But they choose to, you know, a lot of the northern European countries are kind of downshifting countries. So there's that association. When we think about the four-day work week, the kinds of trials that we're running, things are a little bit different, because people are getting all the money, they're not losing any money. You're not trading productivity for time. But there are benefits, there is less commuting going on. We were worried that people might be travelling a lot on their three-day weekends, but we're not seeing that. We were worried they were going to take on extra jobs. We're not seeing that. So we're not sure exactly, we won't be able to tell you what the net carbon impacts are. But a few of the metrics that we've been looking at look pretty promising from the point of view of carbon impacts of shorter hours.

Sandra You've mentioned there the three-day weekends, is it always the Friday that people take off?

Juliet Schor No, but it's the most popular day. Monday is the second most common. People like having the three days together. And you can see why, it's more refreshing. You can do more things and so forth. You also have some companies that don't take a common day off, because they have to be open five days a week. And so employees take a different day off, or a few chose, like, they don't have the same day off every week. They're on a rotating schedule. So there is variation there. Fridays is the most common, about half of companies.

Sandra Thursdays are the new Fridays. And Tuesdays are the new Mondays. Let me get back a little bit to the bigger picture, because you spoke about how this might help decarbonize the environment, or it might well help with the carbon footprint. But do you see the four-day work week, as part of this wider move to shift economic behaviours, you mentioned, you know, maybe thinking about not growing as fast as you could as an organisation, maybe a drive to decrease consumption, a shift really away from this, like endless growth? And 'the more exponential, the better', kind of view. Is there any evidence so far from your studies that this might actually be happening?

Juliet Schor So we're not looking at that in the trials. You know, it's a six-month trial. It's not the employees who are choosing it, for the most part, many of the upper management is maybe getting pressure from their employees. But for a lot of these companies, this is an innovation from the top. These trials in particular, I don't know that they're so much a part of that movement. I personally have been involved in, you know, what we might call a kind of 'post-growth movement' for decades, basically arguing that we should be trading more productivity growth for time and on a progressive path of worktime reduction. As Keynes argued, as you pointed out a few minutes ago, in 1937 - I actually had a little discussion of that essay in my TED talk on the four-day week, and it was a casualty of the short timeframe of a TED talk, so it got cut out near the end, at the last minute.

Sandra I was gonna say, I don't remember you talking about it.

Juliet Schor If you've been with me in rehearsals, you would have remembered.

Sandra Well I'm volunteering to come along next time.

Juliet Schor But I do think that it's in the Zeitgeist of - you know, 'work less' is, is at the core of a post-growth philosophy for lots of different reasons. Having to do with both the instrumental need to work less, if you're not going to be growing, but you have productivity growth, otherwise, you just get a lot of involuntary unemployment and lots of problems. But also, you know, the kind of value shift around quality of life rather than quantity of stuff and giving people control over their time, and not having them being, you know, what I call the 'work and spin cycle'. And I refer to it these days as sort of powering down because in the climate world, we have both the question about how much power, but reducing energy use is also connected with slowing down in our lives. And it's really not feasible to slow down in fast-paced capitalist economies with long hour jobs. So we need to change the structure of work in order to change the way our daily life unfolds.

Sandra So if people want to change the structure of their work and want to think about maybe embracing some of these findings, or some of these practices, maybe they want to be part of these studies, where should they go? What should they do? Where can they keep an eye on the results?

Juliet Schor They should go to the website of 4 Day Week Global. If you are in the management of a company, contact us from the management side. But if you're an employee in a company, and you want to start a conversation at your workplace about this, there's a place on the website for that too, because increasingly, I think we're going to see it bubble up. If you're in a union, the union gives you ideally, some democratic voice on what happens in your workplace, and that's a vehicle to start pushing for this. We talked about governments, companies, and you know what scale - unions are really key. Historically, they have been the key actor for worktime reduction. What's interesting and different about the trials that we're running is that these are for the most part, non-unionised companies, not all of them, some of them do have unions. But as I said, many of these companies, it's the CEOs or the founders who are interested in doing this. They're kind of visionary and innovative. But we need to move beyond that into those workplaces, where there are unions and to start making unions a big part of this conversation.

Sandra So managers, employees, unions, go to the website, we'll put all the links in the shownotes, and start a conversation. I'm hoping we can continue this conversation as more of the results from the trials come out early next year. Juliet, it's been such a pleasure talking to you today.

Juliet Schor Pleasure talking to you as well. Thank you.

Sandra And that's all we have time for today. Thanks for listening.

Outro You've been listening to The Future, This Week from The University of Sydney Business School. Sandra Peter is the Director of Sydney Business Insights and Kai Riemer is Professor of Information Technology and Organisation. Connect with us on LinkedIn, Twitter, and WeChat. And follow, like, or leave us a rating wherever you get your podcasts. If you have any weird or wonderful topics for us to discuss, send them to sbi@sydney.edu.au.