Senator Bernie Sanders, a Vermont independent, has introduced a bill to cut the standard US workweek from 40 to 32 hours over four years—without reducing pay, mind you—saying that Americans are working longer for less despite technological and productivity gains. The law would also lower the overtime pay eligibility threshold. Now it’s always a pain to fact-check the economic musings of politicians. That, especially if they’re die-hard capitalism critics. That, especially regarding wage, inequality, and productivity trends.
So much misinformation, so little time. For example: Wages haven’t been stagnant for decades, nor have workers not been rewarded for higher productivity. Oh, and Sanders may not have noticed that corporate America is already exploring the idea of the four-day workweek as it rethinks various work practices, including hybrid and fully-remote work. JPMorgan CEO Jamie Dimon recently believes AI could lead to 3.5-day workweeks for the next generation, while Microsoft founder Bill Gates sees a three-day work week as possible thanks to advances in AI. As a recent Wall Street Journal op-ed put it, “The senator is attempting to legislate a work culture that a growing number of businesses in the private economy are already providing for employees.”
Now consider: A shorter workweek, supported by greater worker productivity, might be about the surest way to slow or even reverse declining fertility rates. So far, at least, this demographic shift has been a problem—assuming one sees it as a problem, as I do—impervious to public policy worldwide, testament to the power of the trend. Fiddling with tax credits or creating new child allowances hardly seem up to the task. As a recent Financial Times piece points out:
Analysed across all rich countries, birth rates are no higher among those where childcare is fully subsidised than those where parents pay eye-watering fees — the link between births and total spending on family-friendly policies is negligible. This often prompts head-scratching, but it should not. Unsurprisingly perhaps, the decision on whether to have children, and how many if so, turns out to be about far more than money. … Birth rates in liberal, developed countries look exceptionally unlikely to return to replacement level any time soon. If they miraculously do so, it will most likely be due to broad social and cultural shifts, not policy. There’s nothing wrong with governments pursuing family-friendly packages for other reasons but if they’re fretting about ageing and shrinking populations, then they need to find other solutions.
What might make a difference? How about a radical change in how we live our everyday lives? As I recently wrote in my Faster, Please! Newsletter essay “Reversing the global fertility collapse: Tech progress might be the only answer”:
What if tech-driven economic growth makes us so much richer that we simply choose to work less? Maybe a lot less. With all that extra time and all those extra resources, maybe we would choose to devote more of both to having more kids. As it is, the rich seem to be having more kids than the poor. What if we all were far wealthier than even the top 1 percent are today? … That said, tech progress might well, at some point, reduce the length of the work week if productivity should surge and income growth accelerate, leading to a desire by people to work less and spend more time on leisure — a desire that might also include bigger families with whom to spend Martian vacations. Tech-driven productivity growth seems to me to be the most likely path to a shorter work week and greatly altered work-life balance.
How much shorter might the workweek become due to all that wonderful “tech-driven productivity growth?” Well, it’s tough to predict, of course. John Maynard Keynes famously predicted greater economic growth would have us working just 15 hours a week by 2030. (He got his growth numbers pretty close, at least.)
Still, I would point to the new analysis “A circular relationship between productivity and hours worked” as a possible scenario. Economists Gilbert Cette, Simon Drapala, and Jimmy Lopez estimate that hours worked could decrease to about 25 hours per week by the end of the century, assuming a future productivity revival comparable to the US experience from 1900 to 1975 when the average growth rate of labor productivity per hour stood at approximately 2.6 percent. Such a pace of productivity growth would be more than a point faster than what we’ve seen since the early 1970s. There are estimates, however, that AI might have the economic potential to raise productivity by that much or even more. Our demographic future might depend on it.
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