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

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

(light music)

- American's are thehardest working people

in the industrialized world.

The average full time adultworks 47 hours per week,

that's way more than theGermans, Dutch, and French.

So how would you like to work

32 hours a week instead of 40, 47 hours,

get paid the same?

That sounds pretty good, doesn't it?

Well, a company in New Zealand tried it,

and they found that workerproductivity actually went up.

Well joining us withmore of this is economist

Michael Busler, he'sa professor of finance

at New Jersey Stockton University.

Dr Busler, thanks for joining us today.

- Well, thank you, it'smy pleasure to be here.

- So tell us about the work hours

experiment in New Zealand,how did that work out?

- So it was a servicecompany in New Zealand

and they said to their employees,

for the next two months, March and April,

we're gonna try an experiment.

We're gonna pay you the same salary

we've been paying you for a 40 hour week,

except we're only gonnamake you work 32 hours.

So instead of five, eight hourdays, four, eight hour days.

After the two months, they found

some very surprising results.

One, they seemed toproduce just as much output

in the four days as theydid in the five previously.

And they found that worker satisfaction

was up significantly as workers found

they had a much better work life balance.

Four days working, three days of leisure.

So they declared it a major success,

and they think it should be a model

perhaps for many morebusiness going forward.

- Well, so that was in New Zealand,

would it work here in the United States

where everyone's used toworking hard and many people

love getting that overtime?

- Yeah, I would have my doubts.

I also have my doubts alittle bit about this study.

It was only carried outfor a two month period.

And they said to theemployees, listen we're gonna

try this for two months, and if it works,

we'll continue to pay you for 40 hours

and only have you work 32.

So there was certainlyplenty of motivation

for the employees to work a little harder

during the two month test period

to come up with good results.

I suspect if the test were replicated,

done over again, and the timeperiod was stretched longer,

probably a year, I have afeeling that the results

would not have been the same.

I think that productivitywould eventually started

to level off a little bit,maybe back to the same level

they had during a 40 hour week.

- What impact wouldthere be on productivity

at a factory, a business,that depends on quotas?

- Well, it would havea much larger impact.

One thing that the businessowner didn't mention,

I know if I was owned abusiness, and for the last

20 years I've been payingmy workers for 40 hours

and they've only been doing32 hours worth of work,

I might tend to get alittle upset with that.

Secondly, if you'relooking at manufacturing,

typically what's been done is work weeks

have been reduced, but the number

of hours per day has increased.

So instead of four eight hour days,

many companies, or somecompanies at least,

have switched from five eight hour days,

to four ten hour days.

In the medical profession, for instance,

in hospitals that have tobe staffed 24 hours a day,

they switched, particularly the nurses,

they switched to working 12hours a day, three days a week.

And that's tended to workout fairly well for them.

I know of some companiesthat have switched to

four nine hour days andthen half a day on Friday.

And that's tended to workout fairly well also.

In addition, there area number of businesses,

a number of industries, like retailing,

where the trend is to go to more hours,

they're open to 10-12hours a day, five, six,

often times seven days a week.

And if you start cuttingemployees down to 32 hours a week,

you still have to havecoverage, that's gonna

drive up labor costs, gonnahave to hire more people.

That'll drive up labor costs,what that may end up doing

is causing some moreproblems with the economy.

Particularly in sectors wherethey cut down to 32 hours,

and after time, theproductivity goes back to where

it was before, now you'repaying people for 40 hours

worth of work, maybe they've dropped down

only 32 hours worth of output.

That creates pressure on economic growth

so the economy could start to stagnate,

and then with all the extra wages,

you could see inflation.

- It doesn't seem likemany American companies

would want to pay someone 40 hours

and they're only working32 but my guess is,

millennials might like thisidea, fewer work hours,

more social time, better quality of life.

What response are you getting

from your students on this idea?

- Well, I'll tell ya,I have some experience

with millennials that workin the technology sector,

many in new start up companies.

The companies there,Silicon Valley companies,

they have unlimited vacation policy,

that is you take as muchvacation as you want.

And there's not rigid hours,just get the job done,

you can work as many hours as it takes.

What they found is, the employees

have been taking less vacation time

and they end up working more hours,

but they're happier because they have more

control over when they can work.

So if a family has achild that plays sports

after school, you cantake a couple hours off

and then do the work at whatever

time is convenient for you.

So I think the millennials,typically the younger ones,

which have somewhat of areputation of believing

everything they shouldget they're entitled too,

I think they too, have a good work ethic

and when given the proper motivation,

and not a lot of control over their life.

That they have to bethere from nine to five,

they have to take two weeks vacation,

so if you do away with some of that,

they tend to respondvery favorably to that.

- What are the chanceswe're going to see a change

in Washington regarding work hours,

and work time and that kind of thing?

Maybe legislation ordo you think company's

will lead the way andjust do this on their own?

- Yeah, the current makeup of Congress

and the President are notlikely to have government

interfere with this by mandatinga certain work schedules.

However, business wants to be innovative,

it pays them to have employees that are

very satisfied with what they do.

And they may find they'llstart experimenting

with some differencesin the time schedule.

And whatever turns outto be positive for them,

they'll implement on their own without

any kind of governmentinterference with that.

- Okay, we're entering a new era, I think.

Some interesting points to ponder,

Dr Michael Busler, thank youso much for joining us today.

- Well thank you, it's been my


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