Background to a four day week

Press, 3 November 1981, Page 17

Background to a four day week

By

GLENN HASZARD

Industrial reporter

When Henry Ford introduced a five-day week in hisautomobile plants in the early 19205. the innovation met about as much opposition as the meat workers and Borthwicks are now facing with their four-day week proposal at the Longburn works. Some of Ford’s critics even cited the Bi ole in support of the argument that man was meant to work six days a week and rest on the seventh. Critics of the Borthwicks’ and other proposals in New Zealand would be well advised to look at the available research on the shorter working week before diving into the public arena «nh politically-motivated tirades which may prove to be. based on about as much reason as Ford's critics aisplayed.

They should take.note of people" like Douglas Fleuter. who says in his book. "The Work Week Revolution.” that the adoption of a shorter working week is part of “inevitable sociological change.” In New Zealand, there have been already examples of four-day weeks and shorter working weeks, although these have not been

widely publicised and have been "informal arrangements between employers and small groups of workers.

A research officer of the Lanour Department reported in 1973 that a group of seven abattoir workers were working an informal four-day week. There was no industrial agreement or award covering the group. The men agreed among themselves to start work on week days at 6.30 a.m. and to carry on until the required stock was slaughtered. By working extended hours from Monday to Thursday no work was usually needed on Friday. In another case, a clothing firm employing more than 100 workers operated a fourday. 32-hour week, from Tuesday to Friday. The workers not only received a full weekly wage, but also an additional 16 hours pay as a bonus.

"Apparently increased productivity is sufficient to allow this," noted the research officer.

The officer concluded that a review of all the evidence “suggests that a carefully planned and. instituted scheme can bring numerous benefits to both staff and

management. The major step to be taken in introducing any scheme in New Zealand lies, it seems, in effecting a change (towards greater flexibility) in the legal provisions presently governing hours of work.”

The Australian clothing firm of E. E. Whitmont and Sons introduced in 1972 a 9hour day, 36-hour week for its production workers, and an 8-hour day, nine-day fortnight for its other staff. An Australian Government study of the scheme revealed that output increased bv an average of 5.6 per cent in the first 22 weeks, aosenteeism and labour turnover decreased. tne accident frequency rate was reduced, and there were savings in training costs, and in light, and power costs because of the extra one day off a fortnight for the non-produc-tion workers.

An 1.L.0. report on hours of work, published in 1975, said that there was the usual assumption that if hours of work were reduced the out-

put would be reduced proportionately, “In practice, however, the mere tact of reducing the duration of the working week usually brings into action factors working in the opposite direction and thus offsetting. at least in part, the proportionate reduction,” said the author of the report, A. A. Evans. <

The more significant of these factors were:

• Most people were capable of working more intensely during a relatively snort period than they were able or willing to work over relatively prolonged periods.

• Where hours of work had been particularly long, their reduction had in many cases had a favourable effect on absenteeism and sick leave.

• A need to make changes in work schedules stimulated management to re-examine certain methods of production, resulting in increased productivity. • The higher cost of an hour of labour tended to stimulate the search for more capital

intensive methods of production.

• In some cases a reduction in hours of work could eliminate a relatively unproductive shift.

• In some cases the- reduction in hours of work made it easier to introduce shift work, thereby. enabling a more economic use of capital equipment. • A better climate of labour relations could result, giving higher productivity. Evans quoted numerous studies of wartime working hour changes which showed that hourly output increased when working hours were reduced from over 60 to about 47 a week. Most of the cases cited involved a reduction in long weekly hours, but when the working day was reduced the effect on output was less marked. A German study showed that when hours were reduced from 10 to 9 a day. 65 per cent of the proportionate loss of output was recoverable; while 36 per cent of the proportionate loss of putput was recover-

able if hours were reduced from 8 to 7 a day. In a study made in Italy it was estimated that reductions in hours of work to 5 or 10 per cent below 40 a week might lead to increases in productivity per hour of 2.2 or 5 per cent, respectively. “What actually happens when the working week is reduced depends very considerably on the reaction of managements to the changes and the particular problems faced by individual industry undertakings,” said the 1.L.0 report.

Evans concluded that it was not possible to isolate the effects of a reduction in hours of work from the effects of more important factors. such as rising productivity generally The question which remained unanswered was by how much more might production have been increased had the working week not been reduced.

The New Zealand Planning Council's" view is that where demand, output, and the economy’ as a whole are growing, but unemployment is high, a reduction in working hours is one fairly obvious way to share out increasing wealth.

"But the New Zealand economy is not healthy and expanding at present . . . Witnout growth in the economy the Council would expect a reduction in working hours to cause a reduction in real incomes in one way or another, and the council does not consider tnis desirable.

“If working hours are.reduced but hourly rates remain the same, the income effects are obvious. If hours are reduced and hourly rates increased to maintain weekly incomes, one of the obvious first effects is to increase wage costs to producers. If this is passed into prices, there is an inflationary push which could have the effect of reducing real, as distinct from nominal, incomes,” says the council. However, the council agrees that this effect could be offset by increased demand for ' output, or improved productivity per unit of labour.

So this would not preclude the Borthwicks’ proposal, where the company itself has said the estimated increase in productivity will not only offset wage costs, but also make possible a reduction in killing charges.