Four-Day Workweek : the complexities and implications in this thought-provoking idea in balancing personal freedom with economic realities.
Imagining the reduction of the working week is hard because it is so far from our reality. The last time there was such a significant change was too long ago for us to remember. But that distant parallel in history should help us understand what to expect.
‘The biggest problem is not to let people accept new ideas, but to let them forget the old ones.’
— John Maynard Keynes
Can you imagine your life working four days a week? You’d have more time to play with your children or visit your parents more often without the pressure of everyday life, tackle your ever-growing to-do list, go to the gym, read that book that’s been sitting on your bedside table for months, have coffee with the friend you haven’t seen since her wedding, get serious about your hobby, go on three-day getaways, go to museums, go back to university, attending mass or play guitar. Time to live, or time to rest – to close your eyes and switch off from an increasingly frenetic world.
But what about businesses? What about the economy? If we only work four days, firms will produce less and the economy will sink even further. With all our economic problems – low productivity, inflation, debt, lack of workers – what sense does it make to reduce the working week? Our head crushes the idea with the terrible weight of reality.
These are the feelings that the four-day week arouses: a deep attraction and a natural scepticism of something that seems like fiction. That is why it is often described as a utopia, as sublime as unrealistic. Why waste time on utopias?
The working week is a social, political and economic construct. In the 19th century, people worked six days a week. The change started at the company level, with some small firms in the United States adopting the five-day working week in 1908 as a management practice. In 1926, the giant Ford Motor Company implemented it in its factories. Henry Ford, its founder, obsessed with productivity, had no doubts that he would produce more cars by organising work over five days. Only 12 years later, in 1938, the five-day week (40 hours) was imposed by law for large companies. It became widespread in the United States with successive expansions of the legislation during the 1940s, 1950s and 1960s, with the active role of trade unions.
Today’s scepticism about reducing the working week was also felt in the 1930s. The five-day week was labelled a ‘utopia’, ‘impractical’ or a ‘calamity for the economy’. But curiously all those criticisms disappeared after it was implemented by legislation. No one wanted to go back to organising the economy around a six-day working week. In fact, visionaries of the four-day week quickly appeared – the first was Richard Nixon, the Republican vice-president of the US, who in 1956 claimed that it would arrive soon. More than a victory for the trade union movement, it turned out to be a better way of organising the economy in the 20th century, bringing mutual benefits for workers and businesses.
Entering the 21st century, everything has changed in society and the economy: the speed of communication, the technology available to us, the types of work we do, management practices, the structure of our families, the participation of women in the labour market, the longevity of our lives. But despite these profound structural changes, we continue to organise work in the same way. Because it is the best, or simply because of inertia? Given that everything has changed, is it an eccentricity to believe that the working week should also change?
Just as 100 years ago, the movement is being led, not by trade unions, but by companies reducing the working week as a management practice – because it improves their business. This gives strength to my view of the four-day week as a better way to organise the economy, not just as a dispute between workers and capitalists. Businesses leading the movement is a paradox to many minds, and it makes several institutions – trade unions, business associations, political parties – not know how to position themselves on the issue.
If the four-day week can be a way to benefit workers without harming, or even strengthening, companies and the economy, the least we should do is to study the constraints and consequences of its application. One way to do it is to encourage companies to try this management practice. This was the route chosen by the Portuguese Government when, in 2022, decided to organize a pilot-project, inviting me to coordinate it.
Our goal is not to ‘implement the four-day week’, but to test the management practice in the context of the Portuguese economy and evaluate its impacts on workers and companies. This is a first step, taken with enthusiasm but with caution. We decided that the test should start in the private sector, which concentrates more than 80% of employment, is less complex to evaluate, more agile to execute, and less politicised. We defined the principles: it cannot involve any pay cut, it must entail a reduction of weekly hours, from 40 to 32, 34 or 36 hours, and it is voluntary and reversible for companies.
Finally, we decided to offer companies technical support and research expertise, but no financial support. I am convinced that this was our best decision. Without a subsidy, we do not distort the evaluation, and we are able to ensure the participation of companies with a genuine interest in this management practice rather than companies used to attracting public funds. Furthermore, a subsidy would make the process legally complex, bureaucratic and expensive. With a maximum budget of €350,000, in 10 months we managed to get companies trialling the four-day week.
The risk of the decision was clear: in a difficult year for the economy, would businesses see a reason to experiment the four-day week? To do so, good arguments were needed.
The huge benefit for workers has a positive impact on companies themselves. More rested workers will naturally work better on the other days, with more commitment and concentration, making fewer errors. Errors in the production process lead to wasted materials, customer complaints or litigation, which involve additional costs. In manual occupations, physical fatigue from long working hours causes accidents. The four-day working week substantially reduces absenteeism rates, both because it improves workers’ physical and mental health and because they do not have to miss work to go to the doctor or to renew their passport. Absenteeism forces companies to pay overtime or hire the services of temporary labour agencies – paid at a much higher hourly rate to cover shifts, which represents additional costs. Reducing intermediate costs for companies increases their value added.
In parallel, it also decreases the turnover of workers that destabilises any company and involves recruitment and training costs. The four-day week is a tangible benefit, and should be seen as an alternative to pay rises to value the firms’ human resources. No company that offers it has trouble recruiting. Staff stay for longer, bringing stability and sustainability to their workforce.
Finally, there is a secret ingredient to the success of the four-day week as a management practice. Companies use it to change internal processes that increase productivity per hour. These changes depend on the sector and can be as simple as reducing the number and duration of meetings, as well as the number of people involved; or creating blocks of time for responding to emails, for collective work, or for individual work where no one can be interrupted to facilitate concentration. It also involves adopting new technologies or software to facilitate teamwork; automating processes that are typically manual; improving communication; optimising shifts; analysing the flow of customers or work during the week, month or year such that the extra days off have a minimal impact. In other words, the four-day week is not about working the same way, one day less. Keeping the company competitive requires everyone to work better.
The company leader defines the principles of implementation, but it is the teams that seek the productivity gains from changes in processes. The four-day week as a management practice is a social contract that obliges workers to make it work. The success of the measure lies in unleashing the power of collective action within the company to change the culture with a simple principle: if we can improve the way we work, we will have more days off. Some business leaders realise this secret ingredient and recognise that there are advantages in going first, because they will go on their own terms, in the way that suits their company – not on terms set by other companies, by unions or by the state.
Our biggest surprise was to find several companies in Portugal that had already adopted the four-day week in different formats. In total, 12 such companies got involved in the project, bringing their testimonies. Of the 100 companies that showed interest in the project, 46 decided to prepare a test. The most important phase took place between March and May 2023, with several training sessions in partnership with 4 Day Week Global, an international non-profit organisation set up to support companies to test the four-day week. 4 Day Week Global has organised several international trials and was listed as one of Time’s 100 Most Influential Companies of 2023. But if it is 4 Day Week Global that has the know-how, it is the participating companies that are adapting it to the Portuguese reality. Over the course of three months, they decided the format of the four-day week, how to measure and evaluate the success of the test, how to communicate to customers and employees, and designed the process changes they would test.
Of these 46 companies, 27 started a 6-month trial in June, joining the 12 firms already doing it, for a total of 39 companies. Eleven firms postponed the test because they did not feel ready, and four subsidiaries of multinationals did not get the green light from the parent company to proceed. As the process unfolded, we found it difficult to convince large companies to participate, which is significant given that they could easily do a partial test, in one establishment or department, without any financial risk.
More important than the number of participants is their diversity: a kindergarten, a social centre, a research centre, a stem cell bank, entities from the social sector, industry, and many training and management consulting companies. They all adopted the philosophy of the project, but the concrete solutions found were different. Many companies opted for a nine-day fortnight, making an average of 36 hours per week. Some companies close on Fridays, but many continue to operate five days a week with workers rotating the day off. Only one company has opted for a four-day week with an increase in daily hours to nine. Larger firms had to adopt different solutions for various functions or departments.
With this project, we want to demystify a four-day week test and encourage companies to try it out. Experimentation is part of the DNA of the best companies. It is so natural for them to test new products, different advertising techniques, or variations in pricing, often at financial risk. Why this resistance to experimenting with a different way of organising work?
Should we go further? The argument that the four-day week increases productivity per hour alone is not a strong argument for advocating it as a public policy goal. If anything, it is an argument to incentivise companies to experiment. Moreover, these pioneering firms are not representative of a typical firm, and it is not because it is successful in these firms that the effects would be similar if it were extended to all firms in the economy.
The arguments for a more active involvement of the government, unions or employer associations have to be different, they have to be centred on the wider effects that more free time can have on society, environment or economy that are not considered by companies and workers. Generalising the four-day week would have profound ramifications.
Traditionally, the political argument most often used to defend the four-day week as a public policy objective is that of well-being. The slogan ‘we should work to live, not live to work’ is well understood by people, but it turns out to be subjective. After all, many of us like our jobs and value our work. Another argument often made is that it has a lower environmental impact, as it means less travelling to work and more time for typically less carbon-intensive activities. This is a strong argument, but only for the ones truly worried about climate change.
But there are stronger social arguments, relating to gender equality, promoting family and birth rates, and preventing work-related mental illness. The four-day week can promote gender balance in the labour market, alleviate the pressure felt by women, and give men time to participate more in family tasks. Indeed, in the pilot conducted in 61 UK companies, men’s time spent with their children more than doubled during the trial.
It is no coincidence that in 60% of the companies interested in the pilot project, the person who contacted us was a woman (when women represent only 27% of leadership positions in Portuguese companies). In several surveys about the four-day week, women show more openness to the idea because they feel more time pressure. In a survey on time use in Portugal, 55% of women aged 25-44 felt they did not have enough time to do everything they wanted to do in their daily lives, compared to 44% of men. In addition to hours at work, women accumulate hours of unpaid labour – one hour more per day than men in domestic activities such as cleaning the house, shopping, doing the laundry or preparing meals – and it is on them that the responsibility of caring for children and looking after parents falls.
Like in most countries, female participation in Portugal has increased dramatically. Fifty years ago, only 25% of women over the age of 16 participated in the labour market, compared to 90% of men. Women worked mainly in the domestic sphere. Men could work long hours, but when they returned home, everything was done. Time at home was time off for the whole family. Now, the participation rate is 50 per cent for women and 57 per cent for men. Most women work like men, in jobs increasingly intensified by technology, with the same workload and the same ambitions. When they return home, there is no time for rest, let alone leisure.
We have no time for anything! It is a problem that affects all of us, and has two other consequences. On the one hand, lack of time erodes the family itself, a core institution of our society. Does anyone doubt that the lack of time for ‘us’ and ‘me’ contributes to a higher level of divorces and the low birth rate? On the other hand, lack of time contributes to stress and burnout, the labour diseases of the 21st century. In richer countries, couples escape this curse, by having the women moving to part-time, with the consequent loss of income and of career opportunities, and gender imbalance. In southern European countries most couples cannot live with the loss of income, so the impacts are more social and demographic.
Some of these social arguments – especially the one about valuing the family and promoting birth rates – cross ideological barriers and appeal to conservatives who see the family as the fundamental building block of society. The arguments of gender equality and mental health, on the other hand, don’t seem to convince the men in suits and ties who run the economy but don’t have to cook dinner every day. Explaining to them has no effect: that mental illness costs the economy 4% of GDP in loss of productivity and employment, and costs to the health system and social security according to a report by OECD, or that eliminating gender inequalities would increase world GDP by 35%, according to the International Monetary Fund.
It was to convince them that I articulated the economic arguments in the book Friday is the New Saturday. Most economists see hours of work as contributing to production and leisure as time outside the economy – a waste. But what we do in our free time contributes, directly or indirectly, to the economy. In the words of Nobel economist James Tobin, ‘every leisure act has an economic payoff to someone’. With more free time, people could rest more, which would increase their efficiency during their four-day working week. They could enjoy leisure activities that involve spending, which would stimulate leisure, entertainment, culture, restaurant or tourism industries. They could use the day to train and acquire new skills to help them move into a more promising occupation, particularly important in a period of great and rapid technological change. They could devote their time to their passion and perhaps invent the innovations of the future or start a business. It was through this hybrid entrepreneurship that companies like Ford, Apple or Nike were born. We are not only workers, we are also consumers, potential entrepreneurs, inventors, educators, students, tourists… humans.
But improving the economy is also about protecting it from risks, and the biggest risks facing Western economies are populist movements. Even if the economic benefits were not enough to outweigh the costs of implementing them, it would certainly be worth it if it allowed us to avoid such disastrous economic policies as Brexit or the loss of political freedom we are already seeing at the heart of the European Union. While populists bet on division – the people against the elite, men against women, natives against immigrants – the four-day week can unite. In various surveys, 70 to 90 per cent of people say they would like a four-day week. People might be scared of its impacts in the economy, but as a goal, as an objective for society, the idea is not divisive. This figure is indicative of an idea that unites society beyond the trenches that populisms help to dig. After all, in today’s polarized society what do rich and poor, men and women, young and old, Muslim, Jewish or Christian, have in common? Everyone enjoys a bank holiday weekend!
The four-day week will be the future – no doubt about it. The question is, how should we get there? Just counting on companies to make the switch is wishful thinking. Large companies are averse to big changes, and despite all the buzz around the four-day week, they don’t even experiment with it. Plus, we should not expect that they foresee all the other benefits for the economy, society and environment. Three years after Henry Ford proved the five-day week was a successful management practice, only 2.6 percent of US wage earners were working five days.
The generalization to the whole economy has to be coordinated, and for that the trade unions have a vital role to play. What is preventing trade unions from picking up this fight?
First is the argument that people prefer wage increases to the reduction of the working week, especially now when inflation is squeezing real incomes. Pushing for higher wages should be the priority of unions, not the reduction of working time. We should recognize that people might have different preferences regarding more income or more leisure time. The question should be what is the best compromise? The existence of the weekend does not prevent anyone from working. People can moonlight with a second job or use the Gig economy to complement their income. In other words, it would be easier to monetarize the free time with a four-day week, than it is to transform income in free time under a five-day week
There is another crucial difference between the fight for wage increases and the reductions in working time. The first one is much more temporary than the second. Wage increases bought by difficult negotiations can quickly evaporate with one year of high inflation or a recession. Reductions in working time, on the other hand, are a much more permanent achievement. Furthermore, a four-day week might change the future conditions for wage negotiations. By reducing the supply of hours, together with the potential increasing demand for workers due to higher productivity per hour and higher demand for the leisure industries, will create the market conditions for increasing wages. The three decades during the generalization of the 40-hour week in the US, saw real wages increase by close to 30% a decade. Since the 1970s wages have never grown much past 10% in any one decade. Sacrificing wage increases for a four-day week is a strategic move that will place the unions in better conditions in the future.
The second doubt is whether to fight for a four-day week or a reduction of the working week to 35 hours, with a 7-hour day. The difference between the two is essentially the coordination of the reduction of working time, in ‘days off’ rather than ‘shorter days’. The four-day week is a better objective than the 35-hour week because it is transformative. One less hour per day does not change anyone’s life. It does not even give you time to go to the gym. In France, it is more common to keep working 8 hours and accumulate the extra hours in extra vacation days, which many workers end up not using. On the other hand, workers whose companies adopted the four-day week, talk about it almost as a religious experience. That extra day every week gives them time to live. That is why, the four-day week attracted much more attention than the 35-hour week ever did, and could be a great objective to rekindle worker’s movements. The 35-hour is also not transformative for firms, while the four-day week, by forcing big changes, potentiates productivity gains.
If a sector or a country is not ready for a four-day, 32-hour week, there are intermediate steps possible. A nine-day fortnight or a four-day week with 9-hour days, reduces the average week to 36 hours. A 34-hour week could be achieved with 8-hour days, four days a week, with 2 hours accumulated in an hours bank (essentially a worker would work one week of five days, every month). Countries could also use their bank holidays to facilitate the transition.
The third factor that is blocking trade unions is that the four-day week will imply changes in the way we work, which scares unions and workers themselves. The firms that decide to trial a four-day week often describe the moment they communicate the decision to their workers as ‘not going according to expected’. Instead of cheers and excitement, they often get silence and a bit of apprehension. ‘Will we be able to do the same work in four days?’, ‘To do this, things will have to change for us’. It is more comfortable to keep doing things as we have always done, but if we want the best for workers, we must be willing to be part of the change.
Unions should not be afraid of it, and should pick up the four-day week as their main cause, bringing it to the negotiation table, and be able to make concessions for it. In a fight for better conditions for workers, the four-day week is more than that. It is a fight for a better way to organize the economy in the 21st century.
Dr. Pedro Gomes, Associate Professor of Economics at Birkbeck, University of London, author of Friday is the New Saturday, and Coordinator of the Four-day Week Pilot of the Portuguese Government