Print

4 Day work week: Can it save environment and boost economy

Published: Mar 12, 2024

By Parneet Sachdev, IRS is The Chairman of Real Estate Regulatory Authority and A leading author

RECENTLY, Narayana Murthy, co-founder of Infosys, said that young people should work 70 hours a week to compete with other countries. Murthy also pointed out that India's productivity is the lowest in the world and that educated Indians owe it to the less fortunate to work "extremely hard". This would mean that in a five-day week, employees will start work at 6 am and end work at 8 pm. Further implying that the waking up time would be 4 am (getting dressed, travelling, making breakfast etc) and sleeping time might be around midnight. That would leave only six hours for sleep-in violation of all medical norms.

Such atrocious timings would essentially imply that married women would be effectively excluded from the workforce as there would be no time for children at all. Somehow, even kids aged 4 would need to dress themselves up, make their own breakfast, go to school etc.

Whereas, such suggestions are thankfully not being implemented or even considered, yet economists point out that there have been massive gains in productivity over the past century. So why are people still working so hard for so long? Output per worker increased by almost 300% between 1950 and 2018 in the U.S. The standard American workweek, meanwhile, has remained unchanged, at about 40 hours. This paradox is especially notable in the U.S., where the average work year is 1,767 hours compared with 1,354 in Germany, a difference largely due to Americans' lack of vacation time.

One of the most famous economists of the 20th century was John Maynard Keynes (1883-1946). Educated at Cambridge University, he returned to teach at, and become a fellow of, Kings College, Cambridge. In 1915 Keynes joined the UK Treasury and acted as an advisor to government for many years. His ideas are now known the world over as Keynesian economics.

He had confidently predicted in 1930 that within a century, the normal workweek would decrease to 15 hours. Yet Americans in their prime working age are still on the job 41.7 hours per week as are people in India, including the government sector.

As per the World Economic Forum, in Spain's third largest city Valencia, a pilot programme trialled a four-day week by scheduling local holidays on four consecutive Mondays throughout April and May 2023. The trial included 360,000 workers, who used the additional downtime to do sporting activities, relax and prepare meals, according to an independent commission of health and science experts tasked with evaluating the programme's impact.

Results showed people in the programme had higher self-perceived health status, reduced levels of stress, were less tired and felt happier and more personally satisfied.

The drop in commuting also led to a reduction in nitrogen dioxide emissions and improved air quality.

In a separate 2022 study - one of the biggest single-country trials in the UK to date involving 73 companies and 3,300 employees, the results were similar - four days' work for five days' pay benefitted both employers and workers. As per Statista, 50% of respondents said productivity improved either slightly or significantly, and 86% of the companies were so impressed by the results that they intended to continue with a four-day work week after the study.

As per a report from MIT Sloan the largest trial in the world found that the four-day workweek significantly increased job satisfaction, improved work-life balance, and reduced employee stress. The results also showed improved product quality and customer service, and a significant reduction in absences and sick days.

During the trial period, work-life balance improved in many ways. Specifically, it became easier for 54% of employees to balance their jobs with household duties and responsibilities. In addition, satisfaction regarding both financial stability and relationships increased due to people's ability to better manage the amount of time allotted for each activity. Similar experiments in Belgium, Spain, Japan, Australia, and New Zealand have produced equally impressive results.

As per Benjamin Laker, professor of leadership at the University of Reading's Henley Business School, of the 61 companies that took part in the experiment, an impressive 92% are continuing with the four-day week. 39% of employees experienced lower stress levels and 71% noticed less anxiety, fatigue, and sleep issues.

Remember the time of nation-wide lockdown during Covid? Within days, people reported hugely reduced pollution. Photos and videos surfaced, where people could see mountains from large distances. Pollution related conditions like allergies and Asthma decreased.

Studies show that the greatest impact of a 4-day week is on the planet.

With one less day at work, commuting time per week fell from 3.5 hours to just under 2.6 hours - 27% lower. An earlier study by the University of Massachusetts Amherst found that a 10% reduction in working hours cut an individual's carbon footprint by 8.6%.

Globally, companies who took part reported their revenues had increased by approximately 8% over the trial and were 37.55% higher than the same period in 2021. Hiring was up, absenteeism was down and even the number of people quitting declined slightly.

During extreme pollution times, cities like Delhi resort to odd-even car rules. This implies that approximately 12.5 lakh cars go off the road in a day. As per the Energy Policy Institute, the odd-even scheme in Delhi decreased air pollution by 14-16% during the day. A 2019 study found that the average AQI was 369.5 before the odd-even scheme was implemented, and 328.5 during odd-even.

An unforeseen effect caught the eye of researcher Tyler Grange during the UK trial. Carbon emissions related to the sending and storage of data significantly dropped. As per stats, Big data-storing centres can each consume the same amount of electricity as 50,000 homes. Such a drop can have a huge impact on the carbon footprint globally!

Data from the US Energy Information Administration shows that people in the US burn nearly 10% less fossil fuels on weekends than they do on weekdays. A BBC report further indicates that overall, Sunday emissions in North America and Europe were found to be 40% lower than the average, while weekday emissions were nearly 20% higher than the average.

Studies indicate that transport contributes roughly 28% or more to pollution and to the carbon footprint. Office buildings are energy-intensive spaces. The U.S. Environmental Protection Agency (EPA) estimates that commercial and residential buildings account for about 13% of the country's total greenhouse gas emissions. A 4 day week reduces this carbon footprint too.

Here are some examples quoted by an environment group '4 day week'.

In New Zealand, Perpetual Guardian, an estate management company, embraced the 4-day workweek concept in 2018. Employees experienced a remarkable 24% improvement in work-life balance while maintaining high productivity levels.

In August 2019, Microsoft Japan embarked on a 'Work-Life Choice Challenge,' embracing a 4-day work week. A remarkable 40% increase in productivity, 23% reduction in electricity costs, and an impressive 60% decrease in paper printing. Also, employees reported higher job satisfaction and reduced stress levels.

While the 4-day-week appears to be almost a magic pill to productivity, lower medical bills, lower costs and a much lower carbon footprint, why aren't governments and companies embracing it wholeheartedly.

There is a history, a psychological barrier to change and an inertia to such changes.

Back during the great depression of the 1930s, governments were very eager to get the nations out of the economic slump. Government of USA and (others) implemented a range of progressive economic policies to help the nation emerge from the Great Depression. The Fair Labor Standards Act of 1938, which established the standard 40-hour workweek, along with a minimum wage was established after intense negotiations with unions remains until today-unchanged.

Even in countries like India, both in the government and the private sector, somehow this psychological and inertial component does not allow any room for change on this aspect. Some argue that national well-being continues to be measured mostly by economic growth i.e GDP. Hence any suggestion on reducing work hours is somehow sacrilege.

As per a study in Cornell University, most people view creativity as an asset - until they come across a creative idea. That's because creativity not only reveals new perspectives; it promotes a sense of uncertainty. This psychological bias in favour of existing status quo leads to rejecting ideas and stifle scientific advancements,

Governments have a great role to play in the 4-day-week issue, especially in the face of overwhelming evidence about its great utility. Sometimes, employers only need a little push, and that's where government action comes into play. The Spanish government recently confirmed it will pay up to €150,000 ($159,000/£133,000) to small and medium enterprises that test the four-day week.

It may well be time to at least test this paradigm in our governments. 4-day-week has the potential for meeting ESG targets sooner, apart from increasing GDP faster-something that can usher 'Amrit Kaal' much sooner.

(Disclaimer: Views expressed are the author's own).