How a four-day week could help with work-life balance
The economist John Maynard Keynes, writing in 1930, prophesied that productivity gains would be such that his grandchildren's generation (today's current workforce) would only be working 15 hours a week with technological advances making many mundane tasks obsolete.
Clearly, that has not been the reality. Average hours worked had been on the rise until the recent recession and even now, the average full-time worker punches in 37.5 hours a week. UK average hours worked are higher than in most EU counterparts and 69% of people currently work over 35 hours a week in the UK (68% in NI) and close to a quarter work more than 45 hours. But are we entering a phase of more rapid change? Part-time employment is on the rise, either voluntarily or enforced, with 34.5% of workforce jobs now part-time, up from 31.5% a decade ago in Northern Ireland.
According to LinkedIn many of the top jobs applied for today did not exist 10 years ago, with diverse activities such as IOS developers, big-data architects and Zumba instructors all on the new jobs list. This sense of change makes forecasting difficult. Who knows what sectors will exist and in what form in 10, never mind 20, years from now? Change will always present new opportunities. Economic theory suggests freeing up labour simply allows the workforce to turn their efforts to new activities, but will there be enough jobs for the displaced workers? Many scholars would argue that this fear of insufficient demand for workers has been around for generations and never truly happens, but there is a palpable sense of excitement mixed with anxiety such is the pace of change.
But what about Keynes' suggestion of a shorter week - is this something worth more thought? First the math - currently the employment rate in NI is 69%. A theoretical 'full employment level' might be close to 80%. This would be equivalent to 130,000 more people in work. If we took all full-time employees and dropped them to four days a week this would create the opportunity for 122,000 more full-time or 240,000 part-time jobs (based on current 'hours worked' patterns). Job done, with 80% of people in work and 610,000 workers now enjoying a three-day weekend.
Of course this is purely a thought experiment. The full-time workers may neither want, nor be able to afford, a drop of 20% in pay. In addition the skills of those out of work are unlikely to match the skills of the current workforce and there are inefficiencies inherent in sharing jobs, such as having more staff to manage. But in an era of rising income inequalities, there is something appealing about a world of full employment and a better work-life balance.
Thought experiments are helpful when we consider profound changes. A linked issue to hours worked is the thorny issue of retirement. The official retirement age is on the move - 67 for me, 70, or perhaps higher, is likely for my children. Perhaps surprisingly this age is not likely to vary based on people's length of time in work versus education or the type of job they do.
My father-in-law is a shower fitter and will work until he is 65. I think we could all agree that fitting showers is a harder physical job than being a professor of economics! The irony is that my education will have been partly funded by the shower fitters who were working and paying taxes when I was still a student. Furthermore, my pension provision makes early retirement a possibility, again not an option for many manual workers.
Lecturing students at 70 seems much less physically demanding than carrying shower units up stairs. Perhaps this is a misguided logic, certainly in my own case my father in law is a lot fitter than I am, but it seems worth consideration.
Add to this the salary differential between many manual jobs and professorial salaries and there are clearly merits to an open conversation about a) how we fund higher education study for young people b) how we fund pensions and c) the possibility of career specific pension arrangements.
You might be asking what prompted me to write about this topic? Much of the research that the centre does is built around forecasts, or possible futures, as they might be better termed. Our work with Belfast Council and Derry and Strabane Council is to help imagine the future, the world in 2030 and beyond to help them plan infrastructure, housing, skills, energy supply and other services. Similarly, work on skills forecasting for the Department for the Economy is also looking at the needs of employers well into the future. Incorporating change in these forecasts is challenging and often we can only hypothesise about a range of possible outcomes. As I look at the research in my own university on data analytics, medical technologies, computing and artificial intelligence and logistics, to name but a few, and couple this with the rapid disruption of traditional business models, it makes me think hard about both the forecasting exercise and the possibility for radical shifts and breaks from trend. The economy is changing around us in ways we never imagined, and this is happening regardless of whatever we are, or are not, doing politically.
In next week's Economy Watch, we hear from Ulster Bank chief economist Richard Ramsey