Economic Impact of Thursday as the New Friday | ORBITAL AFFAIRS

- Advertisement -

The Idea of a Four-Day Workweek is Once Again Gaining Traction in the U.S.

- Advertisement -

What You Need to Know
Some U.S. companies have adopted four-day workweeks after a successful trial of the concept in Great Britain.
Businesses that have adopted the reduced schedule cite numerous benefits including improved recruitment and in some cases improved productivity.
Some also point to increased spending on travel and leisure that an extra day off would spur as a benefit to the economy.
Senator Bernie Sanders introduced legislation setting 32 hours as the standard workweek, but some economists say shortened weeks would require more jobs in an already tight labor market.

- Advertisement -

What if every weekend was a three-day weekend? The idea of shortening the workweek is once again gaining traction, and raising questions about how it would affect everyday life and the economy.

Unlikely allies have floated the idea—Steve Cohen, the billionaire hedge fund manager/owner of the New York Mets and Bernie Sanders, the Democrat senator from Vermont.

Earlier this month, Cohen went on CNBC’s Squawk Box show and explained his investment in golf startup league CGL: Courses will become crowded on Fridays as more companies shift to a four-day schedule, partly because advances in artificial intelligence will enable people to get more work done in less time.

- Advertisement -

“My belief is a four-day workweek is coming,” he said. “Between the advent of AI, generally, we hear from people that people are just not as productive on Fridays. And so I think it’s an eventuality.”

If Sanders has his way—a longshot in the politically divided Congress—the shift would be immediate, not gradual. A bill he introduced last month would in effect mandate a 32-hour workweek by making overtime pay kick in at 32 hours instead of 40. Companies that reduced work hours would be forbidden from lowering their employees’ take-home pay.

Sanders framed it as an issue of fairness: As technology has made all kinds of businesses more productive and boosted companies’ profits, workers should also enjoy the benefits.

“The financial gains from the major advancements in artificial intelligence, automation, and new technology must benefit the working class, not just corporate CEOs and wealthy stockholders on Wall Street,” Sanders said in a statement. “It is time to reduce the stress level in our country and allow Americans to enjoy a better quality of life. It is time for a 32-hour workweek with no loss in pay.”

Less Work for Some is More Business for Others
A report released last week by KPMG showed that 30% of the chief executive officers of large companies surveyed for its 2024 U.S. CEO Outlook Pulse Survey are looking at the possibility of shifting work schedules to 4-day or 4.5-day workweeks.

Should the four-day workweek become standard, either because of business trends or federal law, it would transform the economy and the workplace.

Recent research—as well as the experiences of companies that have already tried it out—suggest a move to no-work Fridays could affect the economy in some surprising ways.

Just because people aren’t at work doesn’t mean they aren’t participating in the economy. Cohen is not alone in believing employees not working one day a week would spend their time (and money) on leisure.

That’s what happened at COLAB, a digital marketing agency in Richmond, Virginia that switched to a four-day, 32-hour work week in 2022 as an experiment and decided to make it permanent after it went so well.

“We had a ton of people do a lot more travel now that they had three-day weekends,” said Morgan Witham, CEO of COLAB.

The CEOs of two other companies that recently switched to a four-day work week—CX Pilots, a customer experience consulting company in Raleigh, North Carolina, and Brick Media Group, a social media managing agency in Tampa, Florida—also said their employees did more traveling.

Indeed, in a survey by a researcher at the University of Reading in Britain published in 2019, 54% of workers said if they were given an extra day of work off a week, they’d spend it shopping, 43% would go to the movies or theater, and 39% would eat out at restaurants.

“An extra day off could have a knock-on effect for the wider society,” Miriam Marra, a business professor, wrote in a post on The Conversation.

Fitter, Happier, More-Productive Employees
Those companies also found their workers were able to get the same, or more work done in the compressed work week than they had before.

“Productivity, if anything, was better,” said Jake Kurtz, CEO of Brick Media Group. “If you’re working on creative things all week and you’re coming up with ideas and you’re making designs and making graphics and doing photos and videos, sometimes you just need to let your mind not think about that stuff for an extended period of time. I was noticing that people from the team were coming back a lot more refreshed on Monday.”

At COLAB, compressing the workweek forced people to focus on using their time as efficiently as they could, Witham said. Time-sucking meetings were canceled or combined.

“We were able to strip away things that we felt weren’t super impactful to our work or our feeling of engagement,” Witham said.

At Brick, employee happiness translated into increased profits. Moving to the four-day schedule improved employee retention meaning less turnover, which helped retain the clients those employees worked with. Revenue rose 75% the first year under the new schedule, Kurtz said.

Some of the benefits were harder to translate into dollars. Many employees used their days off to spend with family or to enjoy the outdoors—a popular option in sunny Tampa, where Brick is located. “People are outside doing workouts and just enjoying being outside and having like a wellness day,” Kurtz said.

A large-scale test of the four-day workweek found similar results—increased employee health and happiness, with slightly better financial performance.

In 2022, 61 British companies participated in a six-month trial of the compressed schedule. Analyzing the outcome, researchers at Cambridge University found that 57% fewer employees quit than the same period the previous year and sick days fell 65%. Perhaps more telling, 92% of the companies that tried out the policy said they were keeping it.

More Workers Would Be Needed
Of course, some companies have already done everything they can think of to increase productivity. Workplaces already optimized to the hilt would have to hire more people to get the same amount done. That’s why several countries throughout history have mandated shorter working hours in order to increase employment.

For example, during the Great Depression, when a quarter of the workforce was unemployed, the U.S. Senate passed a bill shortening the workweek to 30 hours so that the available work was spread around more. It never became law.

Critics question whether shortening the workweek would be a wise move at a time when unemployment is near historic lows and there are more jobs available than unemployed workers to fill them. Some economists in Britain, where the study was carried out, have come out against the idea.

“Such a reduction would exacerbate labour shortages,” Wim Naudé, a professor of economics at the University of Cork, wrote in The Conversation. “It would also squeeze public finances—for example health services would require more staff, thus raising the wage bill.”

An Old Idea Whose Time is Arriving?
Not every company uses Sanders’ definition of the four-day workweek, maintaining the standard eight-hour workday. At CX Pilots, for instance, workers made up for the shortened work week by working four ten-hour days the rest of the week. That’s also a common schedule in professions like healthcare, policing, and other industries where four-day work weeks have become increasingly popular in recent years.

A 2022 study by economists at the University of Texas and Michigan State found that in 2018, four-day work weeks were three times more common than they were in 1973, accounting for an extra 8 million jobs. Employers that offered four-on, three-off shifts were likely to do so mainly to accommodate the preferences of their employees, rather than because it created other potential efficiencies, such as saving on power bills by having a facility closed an extra day a week.

That was the case at COLAB, where the four-day workweek started as a way to attract and retain talent.

“We were just kind of throwing money at the roles that we compete for,” Witham said. “We’re a small agency, so we can’t necessarily fight for good talent only on the basis of salary and money.”

Witham believes the schedule has given COLAB a recruiting edge over its rivals—every single person COLAB has hired since the trial began cited the four-day week as a reason they joined the company, she said.

The idea seems to be gathering some momentum. Steven Keith, CEO of CX Pilots, said he decided to test out the four-day workweek after hearing about the success of the British experiment. Since his company’s work involves improving clients’ company culture, he figured adopting a four-day week would set a good example.

“If we’re telling people that you really need to have a really extraordinary culture, we have to embody that,” he said. “It’s been a tremendous success, far greater than I thought it would be.”

In conclusion, as more companies explore and adopt shorter workweeks with positive outcomes for both employees and businesses alike, it raises questions about whether this could become a widespread trend in the future. While there are concerns about potential labor shortages and economic impacts, proponents argue that a shift towards a four-day workweek could lead to happier and more productive employees while also benefiting society as a whole. Only time will tell if this concept will continue to gain momentum and reshape traditional work schedules across various industries.

News Desk

- Advertisement -

Explore more

Salesforce to Open First AI Center in London

Salesforce to Open First AI Center in London

The Rise of Salesforce: Opening Its First AI Center in London On Thursday, Salesforce (CRM) made headlines as the best-performing stock in the Dow Jones...

Exciting News! Those About to Die Season 1 Premieres this Summer!...

Those About to Die is a new epic drama series that has captivated the attention because of its fascinating world of Rome. the series...
Elizabeth's Age When She Had John: Let's Explore!

Elizabeth’s Age When She Had John: Let’s Explore!

The narrative of the birth of John the Baptist is a significant and captivating aspect of biblical history. It is a narrative that recounts...

O.J. Simpson’s Cause of Death | ORBITAL AFFAIRS

O.J. Simpson is the former NFL superstar who was recognized for his famous trial in 1995 for which he had fought various legal battles...

Samsara Stock Drops Despite Earnings Beat, Guidance Boost

Watch This Key Price Level

ECB Rate Cut Boosts European Stocks and ETFs in US |...

The European Central Bank Rate Cut Boosts European Stocks and Europe-Focused ETFs in the US Key Takeaways The European Central Bank (ECB)...
Wondla Season 1 Streaming Release Date Announced by Apple TV Plus

Wondla Season 1 Streaming Release Date Announced by Apple TV Plus

WondLa, which was originally titled The Search for WondLa, is an upcoming animated sci-fi fantasy television series. It is based on the books The...

S&P 500: Illumina Stock Jumps After Grail Spinoff News

The S&P 500 Gains and Losses Today: Illumina Stock Jumps After Grail Spinoff News Key Takeaways The S&P 500 was little changed on Thursday,...