How to make the four-day working week a reality
It was rather dramatic down in Brighton at the Labour Party conference.
Amid the Supreme Court decision and never-ending Brexit noise, a big policy was launched by shadow chancellor John McDonnell. In his keynote speech, he declared that people ‘should work to live, not live to work’ and committed a future Labour Government to creating a 32-hour week within the next decade.
This is a bold aspiration, but it is the right one – good work should enable you to have a good life.
For too many people, that better life is sacrificed at the altar of a long working week. Full time UK workers clock in on average 42.5 hours a week, one of the highest levels in Europe (only Greece and Iceland work more).
Yet there is a compelling amount of evidence that shows working such long hours is detrimental to both workers and to our economy. And with four out of five millennials wanting a four-day week, the big question now is – how do we make this a reality?
Over the past year, the London Good Work Commission has been investigating poverty and bad working practices across the capital.
It has also been developing a plan of how the city can become a place of good work for all by 2030, which would include getting to a 32-hour week.
Here are three big steps that we need to take before we can get there.
A Living Wage For All
You cannot tackle the problem of overwork until you first end poverty pay – that is why the government should introduce a mandatory real living wage, based on the cost of living.
Over 5,000 employers currently pay a real living wage voluntarily (currently £9 per hour in the UK, barring London, where it’s £10.55 per hour), but with the country gripped by a low pay crisis – over 4million UK workers on poor wages and in a form of insecure work – the government should move swiftly in legislating for a real living wage over a five-year period from 2020.
This could be done by changing the current minimum wage-setting body Low Pay Commission into a Living Pay Commission, which would operate independently and include representatives from business, unions, civil society, and academia. It would make an annual assessment and recommendation to the government of what the real living wage rate should be each year.
Currently, the Low Pay Commission recommends what the minimum wage rates should be each year based on an assessment of what it thinks the economy can handle.
Another key element is that a real living wage should apply to all individuals working, regardless of their age. This would end the unjust differential rates that exist.
Introducing a statutory real living wage is not a controversial idea. Several US states such as California and New York have passed laws for a £12 minimum wage to be in place by 2025 or before.
To assist smaller employers in making the transition, the government could also provide temporary tax relief, such as lower business rates. This could be funded through savings resulting from lower welfare support as people earn more with a real living wage.
To help tackle the insecurity with hours, employers should also be required to provide workers on zero-hour contracts with at least a month’s notice of their shifts and a guaranteed minimum of 16 hours a week, unless the worker requests otherwise.
Jobs Guarantee
Despite the strong employment growth seen in recent years, many groups still remain highly marginalised from the jobs market, such as disabled people, those from an ethnic minority and older workers.
When this exclusion turns into long-term unemployment and your CV starts to look empty, it only becomes harder to turn things around. If you are lucky and do eventually find work, it will very often only pay the bare minimum, forcing you to work over 40 hours a week or have multiple jobs, just to survive.
Research by the Resolution Foundation found that only one out six people who entered low paid work progressed after 10 years – this is a depressing figure.
In order to tackle this challenge, we need to create a Jobs Guarantee that offers high-quality placements with a full-time living wage for a 32-hour week.
Employers would be able to apply for funding from the government to cover some of the costs of creating ‘additional’ job opportunities within their organisation. In London specifically, this could also be funded through a ‘tourism tax’ on visitors.
These placements would be temporary, lasting up to one year, and targeted at groups facing the greatest barriers in the labour market, such as out-of-work single parents, disabled people, the long-term unemployed and older workers. However, for an employer to qualify, they would have to offer a high-quality job experience that has the potential to lead to a permanent job.
This would be an entirely voluntary scheme, both for employers and participating individuals.
Host organisations would work with participants to co-design the placements, ensuring they are tailored to the person’s needs, skills, and career goals.
A Jobs Guarantee like this could abolish long-term unemployment across the country, but it also has the potential to revolutionise how employers structure their working week with tens of thousands of mini 32-hour week trials taking place.
Good Work Fund
A recent study by Henley Business School saw 250 firms participate in a four-day week, and nearly two thirds of these businesses saw productivity increase. The firms’ ability to attract and retain staff had improved, too.
Collectively, these firms now save £92bn each year, while 40 per cent of employees reported that they used the extra time to upskill.
In conclusion, a shorter working week is not only good for workers, but also for businesses.
That’s why the government should work with city leaders and councils to create a dedicated Good Work Fund (GWF) – an employer support fund that would provide help to organisations who wish to boost productivity by redesigning their workplaces.
The fund would support firms to test out 32-hour working weeks and to measure the impact.
It would also support the development of a ‘place-based’ approach to reducing working hours with funding to city leaders and councils to develop trials in their local areas by involving key ‘anchor’ institutions.
As an example, Forest Gate Community School in Newham is currently piloting a four-and-a-half-day week schedule for teachers and students. In this case, the GWF would support other employers in the area to similarly test a shorter working week.
The effect of this would be to embed a community-led approach to reducing long working hours.
Hundreds of organisations have adopted the four-day week – because it works.
With the right policy action and support for employers, the dream can become a reality for all by 2030.
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