Would a Shorter Work-Week, Same Pay, Work in the USA?

What impact has a more relaxed work-week policy had on American workers in Silicon Valley? Watch Gary Lane's Set It Straight interview with economist Michael Busler to find out. 

How would you like to work only 32 hours, four days a week instead of the traditional 40-hour, five-day work week and receive the same pay?

A company in New Zealand—Perpetual Guardian —tried it for two months and found that its employees were more productive and had more leisure time to enjoy a better quality of life with friends and family. The company paid their employees the same as if they had worked 40 hours.

"They found worker satisfaction was up significantly as workers found they had a much better work-life balance," explained Stockton University economist Prof. Michael Busler, PhD. 

"They declared it a major success and they think it should be a model perhaps for many more businesses going forward."    
 
But Busler said he has doubts about the New Zealand study because it was only carried out for a two-month period. Perpetual Guardian told its workers the experiment would be tried for two months and if it worked, they would continue to receive 40 hours pay for working only 32 hours each week. 

"So, there was certainly plenty of motivation for the employees to work a little harder during the two-month test period to come up with good results," Busler said. 

"I suspect if the tests were replicated, done over again and the time period was stretched longer—probably a year, I have a feeling the results (productivity) would not have been the same."  
 
Would a shorter work-week and fewer hours on the job work in the United States?

American adults are already known as the hardest working in the world, working an average 47-hours per week. That's much higher than other western countries like Denmark (28), France (28), Netherlands (27), Norway (27), and Germany (26).

Busler says some US companies are going to a four-day work week, but employees are working 10-hour days.

"And in hospitals that have to be staffed 24 hours a day, they've switched—particularly the nurses, they've switched to 12-hour days, three days a week and that's tended to work out fairly well for them," Busler said.

And the trend for many American retailers is to keep their businesses open for more hours. 

"They're open 10, 12 hours a day, and five, six, oftentimes seven days a week, and if you start cutting employees down to 32 hours per week, you still have to have coverage. That's going to drive up labor costs—you're going to have to hire more people," Busler insisted. "What that may end up doing is causing some more problems with the economy."

He said if employers pay American workers 40 hours of wages for only 32 hours of output, economic growth may be reduced and the economy could stagnate.

"And then with all the extra wages, you could see inflation." 

That would be just like the stagflation of the 1970's he said. Many Baby-Boomers may remember that horrible period in the US economy.