[Senate Hearing 118-329]
[From the U.S. Government Publishing Office]
S. Hrg. 118-329
WORKERS SHOULD BENEFIT FROM
NEW TECHNOLOGY AND INCREASED
PRODUCTIVITY: THE NEED FOR A
32-HOUR WORK WEEK WITH
NO LOSS IN PAY
=======================================================================
HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
ON
EXAMINING WORKERS BENEFITTING FROM NEW TECHNOLOGY AND INCREASED
PRODUCTIVITY, INCLUDING S. 3947, TO AMEND THE FAIR LABOR STANDARDS ACT
OF 1938 TO REDUCE THE STANDARD WORKWEEK FROM 40 HOURS PER WEEK TO 32
HOURS PER WEEK
__________
MARCH 14, 2024
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
55-873 PDF WASHINGTON : 2024
BERNIE SANDERS (I), Vermont, Chairman
PATTY MURRAY, Washington BILL CASSIDY, M.D., Louisiana,
ROBERT P. CASEY, JR., Pennsylvania Ranking Member
TAMMY BALDWIN, Wisconsin RAND PAUL, Kentucky
CHRISTOPHER S. MURPHY, Connecticut SUSAN M. COLLINS, Maine
TIM KAINE, Virginia LISA MURKOWSKI, Alaska
MAGGIE HASSAN, New Hampshire MIKE BRAUN, Indiana
TINA SMITH, Minnesota ROGER MARSHALL, M.D., Kansas
BEN RAY LUJAN, New Mexico MITT ROMNEY, Utah
JOHN HICKENLOOPER, Colorado TOMMY TUBERVILLE, Alabama
ED MARKEY, Massachusetts MARKWAYNE MULLIN, Oklahoma
TED BUDD, North Carolina
Warren Gunnels, Majority Staff Director
Bill Dauster, Majority Deputy Staff Director
Amanda Lincoln, Minority Staff Director
Danielle Janowski, Minority Deputy Staff Director
C O N T E N T S
----------
STATEMENTS
THURSDAY, MARCH 14, 2024
Page
Committee Members
Sanders, Hon. Bernie, Chairman, Committee on Health, Education,
Labor, and Pensions, Opening statement......................... 1
Cassidy, Hon. Bill, Ranking Member, U.S. Senator from the State
of Louisiana, Opening statement................................ 4
Witnesses
Fain, Shawn, International President, UAW, Detroit, MI........... 6
Prepared statement........................................... 8
Schor, Juliet, Professor of Sociology, Boston College and Lead
Researcher Four Day Week Global Trials, Newton, MA............. 9
Prepared statement........................................... 10
Summary statement............................................ 14
Leland, Jon, Chief Strategy Officer, Kickstarter and Co-founder,
WorkFour-The National Campaign for the 4-day Workweek, New
York, NY....................................................... 15
Prepared statement........................................... 16
Vittert, Liberty, Professor of the Practice of Data Science, Olin
Business School, Washington University in St. Louis, St. Louis,
MO............................................................. 20
Prepared statement........................................... 21
Summary statement............................................ 24
King, Roger, Senior Labor and Employment Counsel, HR Policy
Association, Arlington, VA..................................... 24
Prepared statement........................................... 26
Summary statement............................................ 35
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.
Sanders, Hon. Bernie:
Takano Statement for the Record.............................. 49
Letter to Policymakers in Support of Shorter Workweeks....... 49
Cassidy, Hon. Bill:
A 4-Day Workweek Would Destroy Everything That Made America
Great, Liberty Vittert..................................... 52
32-hour workweek 9, Undersigned Organizations................ 53
QUESTIONS FOR THE RECORD
Response by Juliet Schor, to questions of:
Senator Cassidy.............................................. 54
Response by Shawn Fain, to questions of:
Senator Cassidy.............................................. 55
Response by Jon Leland, to questions of:
Senator Cassidy.............................................. 56
Response by Roger King, to questions of:
Senator Cassidy.............................................. 56
Response by Liberty Vittert to questions of:
Senator Cassidy.............................................. 58
WORKERS SHOULD BENEFIT FROM
NEW TECHNOLOGY AND INCREASED
PRODUCTIVITY: THE NEED FOR A
32-HOUR WORK WEEK WITH
NO LOSS IN PAY
----------
Thursday, March 14, 2024
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The Committee met, pursuant to notice, at 10:03 a.m., in
room 430, Dirksen Senate Office Building, Hon. Bernard Sanders,
Chairman of the Committee, presiding.
Present: Senators Sanders [presiding], Casey, Murphy,
Hickenlooper, Cassidy, and Braun.
OPENING STATEMENT OF SENATOR SANDERS
The Chair. The Senate Committee on Health, Education,
Labor, and Pensions will come to order. This has been a
shortened week, so I think you are going to see--there are
hearings taking place all over the place and I think you are
going to see Senators drifting in and out. But I want to thank
all of our panelists for being with us.
This morning, we are going to be talking about an issue
that is very rarely discussed in the halls of Congress or the
Senate, and that is the need to reduce the standard work week
in the United States. In fact, the last time, as we understand
it, the Senate held a hearing on this subject was in the year
1955.
I think maybe the time is now to renew that discussion. At
that hearing, the Senate heard from Walter Reuther, who was
the--at that point, the head of the United Auto Workers and the
Congress of Industrial Organizations, and Reuther is regarded
as one of the great labor leaders of his time.
This is what Walter Reuther said at that time. He said,
``We fully realize that the potential benefits of automation
are great, if properly handled. If only a fraction of what
technologists promised for the future is true, within a very
few years automation can and should make possible a 4-day work
week.
The reduction of the work week to 35 or 30 hours in the
coming decade can be an important shock absorber during the
transition to the widespread use of automation. It can both
reduce the impact of sharp rises in output and increase the
manpower requirements in industry and commerce.''
Yet today, nearly 70 years later, despite an explosion, as
we all know, in technology and a massive increase in worker
productivity, nothing has changed. Think about that. Think of
the huge transitions we have seen in the economy, but in terms
of the work week, nothing has changed.
While we have not discussed this issue for a long time in
Congress, this is not, needless to say, a new issue. In 1886,
one of the central planks of the trade union movement in
America was to establish an 8-hour workday with a simple and
straightforward demand, ``Eight hours for work, 8 hours for
rest, 8 hours for what you will.''
That was back in 1886. Americans of that era were sick and
tired of working 12-hour days for 6 or 7 days a week with very
little time for rest, relaxation, or quality time with their
families. They went out on strike. They organized. They
petitioned the Government and business owners, and they
achieved real results after decades of struggle.
In 1916, President Woodrow Wilson signed legislation into
law to establish an 8-hour workday for railroad workers. Six
years later, the Ford Motor Company became one of the first
major employers in America to establish a 5-day work week for
auto workers. And here is something I believe that most people
in our Country do not know.
In 1933, the U.S. Senate overwhelmingly passed legislation
to establish a 30-hour work week by a vote of 53 to 30. That
was 1933. While that legislation ultimately failed as a result
of intense opposition from corporate America, a few years
later, President Franklin Delano Roosevelt signed the Fair
Labor Standards Act into law, and a 40-hour workweek was
established in 1940. My friends. In 1940.
Unbelievably, 84 years later, despite massive growth in
technology and worker productivity, millions of workers in our
Country are working longer hours for lower wages. And I hope
people hear this because it is not an issue we talk about
enough.
Today in America, 28.5 million Americans, 18 percent of our
workforce, now work over 60 hours a week and 40 percent of
employees in America now work at least 50 hours a week. We were
talking about a 40-hour work week 80 years ago and that is what
people today, despite the explosion of technology, are working.
The sad reality is Americans now work more hours than the
people of any other wealthy nation, and we are going to talk
about what that means to the lives of ordinary people. In 2022,
employees in the United States, and I hope people hear this,
logged 204 more hours a year than employees in Japan.
They are hardworking people in Japan. 279 more hours than
people in--workers in the United Kingdom, and 470 more hours
than workers in Germany. Despite these long hours, the average
worker in America makes almost $50 a week less than he or she
did 50 years ago after adjusting for inflation.
Now let that sink in for a moment. Think about all of the
extraordinary changes in technology that we have seen over the
last 50 years, computers, robotics, artificial intelligence,
and the huge increase in worker productivity that has been
achieved during that time. In factories and warehouses, robots
and sophisticated machinery did not exist then, or were only
used in primitive forms. In grocery stores and shops of all
kinds.
There were no checkout counters that utilized barcodes. As
a result of the extraordinary technological transformations
that we have seen in recent years, American workers are now
over 400 percent more productive than they were in the 1940's.
Extraordinary. Technology has made working people far more
productive. And what has been the result of all of that
productivity increase for working people? Almost all of the
economic gains of that technological transformation have gone
straight to the top while wages for workers have remained
stagnant, or even worse.
While CEOs today are making 350 times as much as their
average employees, workers throughout the country are seeing
their family life fall apart as they are forced to spend more
and more time at work.
They are missing their kids birthday parties, Little League
baseball games, and just the time they need with their family.
And what stresses them out even further is that after spending
all of this time at work, many of them still are living
paycheck to paycheck, can't take care of their basic needs.
At a moment in history when artificial intelligence and
robotics--and I hope we all understand that the jobs that
people have today ain't gonna be there in many cases in 15
years. Our economy is going to be transformed through
artificial intelligence and robotics.
The question that we are asking today is a pretty simple
question--do we continue the trend that technology only
benefits the people on top, or do we demand that these
transformational changes benefit working people, and one of the
benefits must be a lower work week, a 32-hour work week.
This is not a radical idea. France, the seventh largest
economy in the world, has a 35-hour work week and is
considering a 32-hour work week. Norway and Denmark is about--
their workweek is about 37 hours, and Belgium has already
adopted a 4-day work week.
What we are going to hear today is there are companies all
over our Country and all over the world that have adopted the
40-hour work week, and you know what they found? They found
that productivity actually went up because workers were able to
focus on their work.
They were not exhausted, they were happy to go to work. So,
the issue that we are talking about today is of enormous
importance. Who benefits from the exploding technology, the
wealthiest people who are doing phenomenally well or working
people who are falling behind? And with that, let me give the
mic over to Senator Cassidy.
OPENING STATEMENT OF SENATOR CASSIDY
Senator Cassidy. Thank you, Chair Sanders--thank you, Chair
Sanders. The 32 hour work week with no loss in pay, my staff
has volunteered to be the test case for that. I mean, like, who
wouldn't want it? It is free money, if you will. No loss in
pay, but you work a lot less. But in reality, there is no free
lunch.
Workers would be the ones who would pay, not get paid
extra. The Government mandating a 32 hour work week requiring
businesses to increase pay at least an extra 25 percent per
hour would frankly destroy some employers.
They would ship those jobs overseas, or they would automate
to replace those workers for whom they have an increased
expense, or they would dramatically increase prices to make
this stay afloat. Now, we have talked about the Biden economics
leading to inflation. This would be napalm upon the fire of
inflation.
If this policy is implemented, it would threaten millions
of small businesses operating on a razor thin margin because
they are unable to find enough workers. Now, they have got the
same workers, but only for three quarters of the time, and they
have to hire more.
In fact, there is even an incentive for them to dip down,
so they make everybody part time and then they don't have to
pay certain benefits which are required--or certain
requirements which are required for full time.
Now, if a business wants to voluntarily try a 32 hour
workweek for themselves, Federal law allows it. We don't have
to mandate it. And we will hear from a business today that does
that. So, if an employer thinks it is good for their business,
makes them more competitive, go for it. We think that is a good
thing.
But by the way, I will note that the Chair has not done
that with his staff. Why? Because there is a certain amount of
work required for the continuity of the work. That is just
basic. Now, if a business needs to maintain a 40-hour workweek
to remain competitive, not just locally, but globally, a
Government mandated 32-hour workweek would be catastrophic.
Government should not be in the business of undermining an
employer's ability to keep their doors open with unreasonable
and perhaps unconstitutional mandates. Now, the Chair
frequently says the United States is the wealthiest nation in
the world. We are. How did we achieve it?
American work ethic. Second to none. And we have a balance.
We don't have people as they do in China working 80 hours a
week, but we have that balance. This disrupts that balance. And
we won't maintain the status of being the world's wealthiest
nation if we kneecap the American economy with something which
purports to be good for the American worker, but indeed will
lead to offshoring of jobs seeking for a lower cost labor
force.
Now, there is a reason that no other country has a
mandatory 32 hour workweek. When Japan shortened its workweek
from 46 to 30 hours between 1988 and 1996, economic output
plummeted 20 percent. Belgium, as the Chair notes, has a 4-day
workweek, but those workers work 40 hours within those 4 days.
Now, AI and other technologies have the potential to
dramatically increase economic productivity. I think we should
have a bipartisan hearing on the potential impact of AI on the
American economy. If we have this, my gosh, I am ecstatic. And
I see one of--Dr. Schor, you are nodding your head yes. We are
simpatico on this. We need to explore it.
My office published a white paper in an RFI to stakeholders
last year on how this Committee should approach AI and the
impacts upon health, education, and labor, and we are working
on next steps based upon that feedback.
But a mom and pop restaurant is not really seeing increased
productivity from AI. They are having trouble finding enough
people to fill shifts. And if we require them to pay for a 40
hour work week for 32 hours of work, how will it turn out for
that mom and pop restaurant? Hospital staffing shortages, we
have talked about that, threatening public health.
Well, why are we passing a law to exacerbate that shortage?
UAW pushed for a 32 hour workweek. It didn't happen. But now I
don't think the Federal Government should mandate it, frankly,
just to kind of placate a Democratic political base. Frankly,
this seems an exercise to try and help the UAW lay the
groundwork for future negotiations. And if the UAW wishes to
discuss this, we should do so--they should do so at the
bargaining table.
Now, by the way, I apologize if this hearing gives anyone
false hope, but a mandatory 32 hour workweek is bad policy. I
will note not even Democrats unanimously support this, but it
may give us an understanding where the Biden administration is
heading.
They are up for tough reelection, and they may be more than
willing to use Executive authority to do something which does
not--which actually has bipartisan opposition. And there has
been a concerning pattern from Democrats prioritizing policies
to help politically connected unions at the expense of the
workers and businesses--the workers and the businesses
themselves.
Recently, the Biden administration proposed a new overtime
rule, dramatically increasing overtime pay threshold by 55
percent. That will result in layoffs, and it will result in
more inflation.
The Biden administration released a new joint employer
rule, threatening the viability of the franchise model that
employs over 9 million workers and has empowered people who had
a dream of becoming a small businessperson to become a small
businessperson and otherwise would not have.
The Department of Labor's new Independent Contractor Rule
jeopardizes the ability of 27 million Americans to work as
independent contractors, with the flexibility to pick their own
hours and work from multiple businesses, and this being
attractive--but their independence and protection from forced
unionization has made restricting this freedom a top priority
for unions.
The Administration's assault on workers flexibility and
employers via rulemaking is unacceptable. These policies hurt
the American worker and, by the way, contribute to inflation.
As I said, I would have been excited to work with the Chair on
a hearing to discuss the impact of AI and the new technologies
in our jurisdiction.
There is very strong bipartisan interest in examining this
issue, but we are working instead upon a bill which will never
pass Congress and will be detrimental for American workers.
With that, I yield.
The Chair. Thank you. We have a very knowledgeable panel,
and we thank all five panelists for being with us today. We are
going to begin with Shawn Fain. Mr. Fain is the International
President of the United Automobile Workers.
He is a 29-year member of the UAW and got his start with
the union as an electrician at Chrysler Kokomo Casting Plant.
Recently, he led the UAW in negotiating an historic contract
which substantially raised wages and benefits for the workers
of that union. Mr. Fain, thanks for being with us.
STATEMENT OF SHAWN FAIN, INTERNATIONAL PRESIDENT, UAW, DETROIT,
MI
Mr. Fain. Thank you. Good morning and thank you, Chairman
Sanders, Dr. Cassidy, and Members of the Committee. I am here
to talk about one of the most important issues to any union
leader and any working class person, any U.S. Senator, and any
human being, and that is our time.
As President of United Auto Workers, I represent 400,000
working class people and 600,000 retirees, and I know when my
members look back on their lives, they never say, I wish I
would have worked more. When people reach the end of their
lives, they never say, I wish I would have made more money.
What they wish for is they wish they had more time. And
that is what work does. Work, we are paid for our time, and
when we work, we are sacrificing time with other people, with
family, friends, and other things we wish to do.
But time, just like every precious resource in our society,
is not freely given to the working class. Since the Industrial
Revolution, we have seen productivity in our society skyrocket
with the advances with technology.
One worker is now doing what 12 workers used to do. More
profit is being squeezed out of every hour, every minute, and
every second. There was a time when this phenomenon was
supposed to lead to workers getting their time back, getting
some of their lives back. Nearly 100 years ago, economist John
Maynard Keynes spoke of the future of workers' time.
His worry that--was with all the gains in productivity we
wouldn't know what to do with ourselves. And he predicted a 15
hour workweek, 100 years ago. In my own union, I go back into
our archives, and I read about the fight for the 30 hour
workweek, an idea that was alive and well with our union back
in the 1930's and 40's.
But today, deep in the 21st century, we find these ideas
unimaginable. Instead, we find workers working longer hours. We
have workers working 7 days a week, 12 hours a day. There are
workers, not union--union or not, working multiple jobs, and
they are living to work and are scraping to get by, and they
are living paycheck to paycheck.
We find workers today, later in their life, working deep
into their 60's, 70's, and 80's because they can't afford to
retire. And we find associated deaths of despair from addiction
and suicide of people who don't feel a life of endless,
hopeless work is a life worth living.
We have workers who feel despair as a consequence of
advances in technology. Workers have been sacrificed at the
altar of greed and they have been stripped of their dignity. We
have a mental health crisis. We talk about a lot in this
country, but we never talk about the causes of that.
There has been studies done, increases in stress from
working 7 days a week, 12 hours a day. You are sacrificing
family life, things you want to pursue. It causes an increase
in cortisol levels, which lead to heart disease, cancer,
strokes.
But given all those facts, if someone is lucky enough to
get to retire, typically when they have worked themselves to
death their entire life, they face knee replacements, hip
replacements, shoulder surgeries, and the rest of their lives
figuring out how they are going to survive. So, it is sad to
say that in 1933, the U.S. Senate passed legislation to
establish a 30 hour workweek.
But due to intense corporate opposition, that legislation
failed. But in 1940, President Franklin Delano Roosevelt signed
the Fair Labor Standards Act, establishing a 40-hour workweek.
84 years ago, 84 years ago, the 40-hour week was established.
And since then, we have had a 400 percent increase in
productivity. But nothing has changed.
We--that was why we had--our big three campaign. We had our
stand up strike. We raised a flag for a 32 hour workweek. This
isn't just a union issue. Contrary to what some people want to
talk about, this is a working class issue. And that is why 75
percent of Americans in our contract fight stood with us in
that fight, because they are all living the same reality. Who
is going to act?
Who is going to act to fix this epidemic of lives dominated
by work? Are the employers going to act? Will Congress act? How
can working class people take back their lives and take back
their time? And I know what people and many in this room will
say. They will say, people just don't want to work or working
class people are lazy. But the truth is, working class people
aren't lazy, they are fed up.
They are fed up with being left behind and stripped of
dignity. As wealth inequality in this Nation, this world
spirals out of control, they are fed up that in America, in
America, three families have as much wealth as the bottom 50
percent of citizens in this Nation. That is criminal. America
is better than this.
I want to close with this. I agree there is an epidemic in
this country of people who don't want to work. People who can't
be bothered to get up every day and contribute to our society,
but instead want to freeload off the labor of others. But those
aren't blue collar people. Those aren't working class people.
It is a group of people who are never talked about for how
little they actually work and produce, and how little they
contribute to humanity. The people I am talking about are the
Wall Street freeloaders, the masters of passive income. Those
who profit off the labor of others, have all the time in the
world.
While those who make this country run, the people who build
the products and contribute to labor, have less and less time
for themselves, for their families, and for their lives. So,
our union is going to continue to fight for the rights of
working class people to take back their lives and take back
their time, and we ask you to stand up with the American
workers and support us in that mission. Thank you.
[The prepared statement of Mr. Fain follows.]
prepared statement of shawn fain
Good morning, Chairman Sanders, Dr. Cassidy, and Members of the
Committee.
I'm here to talk about one of the most important issues to any
union leader, any working-class person, any U.S. Senator, any human
being. Our time.
As president of the United Auto Workers, I represent 400,000
working class people across industries, and 600,000 retirees. And I
know when my members look back on their lives, they never say ``I wish
I had worked more.'' They never say, ``I wish I'd made more money.''
They say, ``I wish I had more time.''
But time, like every precious resource in our society, is not given
freely to the working class.
Since the industrial revolution, we have seen the productivity of
our society skyrocket.
With the advance of technology, one worker can do what used to take
dozens.
More profit can be squeezed out of every hour, every minute, every
second.
There was a time when this phenomenon was supposed to lead to
workers getting their time back.
Nearly 100 years ago, the economist John Maynard Keynes spoke of
the future of workers' time.
His worry was that with all the gains in productivity, we wouldn't
know what to do with ourselves. He predicted a 15-hour work week.
In my own union, I go back into our archives and read of the fight
for the 30-hour week, an idea that was alive and well for many decades.
But deep into the 21st century, we find these ideas unimaginable.
Instead, we find workers working longer hours.
We find workers working deep into their 60's, 70's, even 80's.
We find the associated deaths of despair from addiction and
suicide, of people who don't feel a life of endless, hopeless work is a
life worth living.
In our Stand Up Strike last year, we raised the flag for a 32-hour
work week.
Countries across the world have it.
We know with technology, we can do more with less. It is the mantra
we hear from management every day, and yet it never benefits the
worker.
Who is going to act to fix this epidemic of lives dominated by
work?
Will the employers act?
Will Congress act?
How can working class people take back their lives, and take back
their time?
I know what people will say. Maybe even people in this room.
They'll say: people just don't want to work. They'll say, working
class people are lazy.
I want to close with this.
I agree there is an epidemic in this country of people who don't
want to work.
People who can't be bothered to get up every day and contribute to
our society, but instead want to freeload off the labor of others.
But those aren't the blue-collar people. Those aren't the working-
class people.
It's a group of people who are never talked about for how little
they actually work, and how little they actually contribute to
humanity.
The people I'm talking about are the Wall Street freeloaders, the
masters of passive income.
Those who profit off of the labor of others have all the time in
the world.
While those who make this country run, who build the products and
contribute the labor, have less and less time for themselves, for their
families, and for their lives.
Our union will continue to fight for the rights of working-class
people to take back their lives, and take back their time. We ask for
your support in that fight.
______
The Chair. President Fain, thank you very much. Our next
witness is Dr. Juliet Schor. She is an Economist and Professor
of Sociology at Boston College. Dr. Schor is a lead researcher
for 4-day week global trials of companies instituting 4-day
weeks with 5 days' pay.
She has been researching work time since the 1980's and is
the author of the bestselling book, The Overworked American.
Dr. Schor, thanks very much for being with us.
STATEMENT OF JULIET SCHOR, PROFESSOR OF SOCIOLOGY, BOSTON
COLLEGE AND LEAD RESEARCHER FOUR DAY WEEK GLOBAL TRIALS,
NEWTON, MA
Dr. Schor. Thank you. Good morning, Chairman Sanders, Dr.
Cassidy, and Members of the Committee. I am honored to have
this opportunity to support the 32 Hour Workweek Act.
We are here today because for 84 years, there has been no
reduction in the standard workweek. Since 1950, the
productivity of the American worker has risen by 400 percent.
Yet full time employees still log an average of 41.9 hours a
week. Annual hours even rose in the 1990's and have barely
changed since then.
These trends depart from the steady reduction in hours
between 1870 and WWII, and from trends in other wealthy
countries. The average American is on the job 400 more hours a
year than in Germany, 200 more than in France, the Netherlands,
the U.K., and more than the average Japanese.
This is despite the U.S. historically being the global
leader in work time reduction and the world's first 5 day week
country. Now, this was the situation when the pandemic hit,
which brought with it extraordinary levels of stress and
burnout, the great resignation, and historically high job
vacancies.
In response, an increasing number of employers are shifting
to a 4 day, 32 hour week with no reduction in pay. I was asked
to lead research on their experiences in collaboration with an
NGO called Four Day Week Global. To date, more than 300
companies around the world have taken part in our trials.
While the majority are white collar firms, they do include
all sectors, health care, mom and pop restaurants,
manufacturing, construction, retail, nonprofits, IT, finance,
professional services, and even a police department in Golden,
Colorado.
In the U.S., 78 percent of these are small businesses with
50 or fewer employees, which is similar to the U.S. economy.
Our results have been extremely positive for both workers and
the companies. We have 26 well-being measures for more than
3600 employees, every one of which registers improvement from
baseline to the end of the trial. Nearly 60 percent of
employees experience better work family balance.
Anxiety, sleep problems, fatigue, physical and mental
health improve for 40 percent of workers. 69 percent of
employees have lower burnout scores. Participants tell us that
the new schedule is ``life changing.''
One person reports that had it not been for the pilot, I
wouldn't have had the time or the availability to get medical
appointments and procedures, which ultimately led to the early
detection of something that might have proved fatal.
That something was cancer. In our statistical modeling, we
find that the larger the work time reduction, the greater the
increase in well-being. Fewer sleep problems and less fatigue
are one reason, but the second is that a majority of employees
register an increase in their productivity over the trial.
They are more energized, focused, and capable, partly as a
result of organization wide changes in work culture and
processes. In response to methodological criticism, I will just
say here that our findings are robust across time, across place
and industry, and contain a large number of variables to rule
out alternative explanations.
For employers, the most important number is 91 percent.
That is the fraction of companies who have continued with the
4-day week after at least one full year. In the U.S. and
Canada, only two companies have gone back to a 5-day schedule.
Their performance metrics reveal why.
Resignations fell 22 percent, absenteeism declined 39
percent, revenue increased an average of 30 percent. Some
companies report that quality of service improves. After losing
50 percent of their in-patient nurse leaders during the first
two pandemic years, Temple University Hospital gave them a 4-
day week. Patient outcomes improved and voluntary turnover fell
to zero.
If the U.S. adopts a 4-day week, a 32 hour week, it is
likely that hourly productivity will rise. That has been the
experience of both workers and management in our trials. It is
historically what scholars have concluded from past reductions
in work time, and it accords with international comparisons.
The countries with the highest levels of per hour
productivity are those with the shortest working hours. I began
my remarks by referencing our fourfold increase in
productivity. The fact that so little of that productivity
increase has been put toward reducing hours has left American
workers suffering from burnout and stress, with families in
special jeopardy.
The pandemic exacerbated this preexisting problem. Given
the current robust rates of U.S. productivity growth, the
promise of further large increases from artificial
intelligence, and the fact that over the last 84 years the
standard workweek has been unchanged, it is now time for a 32
hour week. Thank you.
[The prepared statement of Dr. Schor follows.]
prepared statement of juliet schor
Good morning Chairman Sanders, Dr. Cassidy and Members of the
Committee. I am honored to have this opportunity to discuss the thirty-
two hour week.
We are here today because since 1938, there has been no reduction
in the standard workweek. And yet, since 1950, the productivity of the
average American has risen by 400 percent. \1\ Although there has been
a small average reduction in weekly hours since that time, full-time
workers still log an average of 41.9 hours per week. \2\ On an annual
basis, hours also remain high--they even rose in the 1990's, and have
barely changed since then. \3\
---------------------------------------------------------------------------
\1\ Total Economy Data Base (TED), Conference Board. In 1950, per
hour productivity was $22; in 2022 it was $83, in constant dollars.
https://www.conference-board.org/data/economydatabase/total-economy-
database-productivity.
\2\ Weekly hours for full-time workers in 2023 from BLS. https://
www.bls.gov/cps/cpsaat19.htm.
\3\ Average annual Hours from TED. Annual hours were 1796 in 1990,
1844 in 2000, 1734 in 2010 and 1774 in 2022.
On a household basis, the time squeeze is especially acute. As
increased numbers of mothers entered the paid labor force in the
1970's, and men's hours did not fall to compensate, paid work effort
soared in dual earner families, which are now the majority household
type. Annual household hours for an average middle-class married couple
with children rose to 3,446, or 600 more than in 1975. \4\
---------------------------------------------------------------------------
\4\ Isabel V. Sawhill and Katherine Guyot, 2020, ``The Middle
Class Time Squeeze,'' Brookings Institution. p 2. https://
www.brookings.edu/articles/the-middle-class-time-squeeze/.
These trends are in contrast to the path of worktime reduction from
1870 until WWII. In fact, the long working hours of the United States
represent an exception--both to our own past and in comparison to other
countries. The average American is on the job 400 more hours than in
Germany; 200 more than in France, the Netherlands and the UK; and 50
more than the average Japanese. \5\ This is despite the U.S.
historically being the global leader in worktime reduction--and the
world's first 5 day week country. In other high income nations, hours
have fallen steadily, by just under a half a percent a year over the
postwar period. \6\ Here, hours have been roughly stable on a
population basis, and on a household basis, have risen considerably.
---------------------------------------------------------------------------
\5\ Average annual hours from TED. https://www.conference-
board.org/data/economydatabase/total-economy-database-productivity.
\6\ Timo Boppert and Per Krusell, 2020, ``Labor Supply in the
Past, Present, and Future: A Balanced-Growth Perspective, Journal of
Political Economy 128(1):118-157.
This was the situation when the pandemic hit, which brought with it
extraordinary levels of stress, burnout, and exhaustion for American
workers, as well as the Great Resignation, \7\ and historically high
levels of unfilled positions. \8\ Gallup reports that the U.S. and
Canada have the highest regional levels of workplace stress in the
world, with more than half of all respondents reporting that yesterday
they experienced feeling stressed ``a lot of the day.'' \9\
---------------------------------------------------------------------------
\7\ Total private quits from Federal Reserve of St. Louis Economic
Data. https://fred.stlouisfed.org/series/JTSQUR.
\8\ Unfilled job vacancies from Federal Reserve of St. Louis
Economic Data. https://fred.stlouisfed.org/series/LMJVTTUVUSM647S.
\9\ Gallup, State of the Global Workplace: 2023, p 22. https://
www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx.
As a result of these elevated levels of stress and burnout, as well
as successful individual company experiences, an increasing number of
employers have decided to trial a 4-day, 32-hour week, with no
reduction in pay. I was asked to lead research on their experiences.
Beginning in February 2022, in collaboration with an NGO called 4 Day
Week Global, we began a series of 6 month trials of the 4-day week
model. Since that time we have been enrolling additional companies.
More than 200 have joined, plus another 100 are being followed by our
collaborators in Portugal, Brazil and Germany. While the majority are
white collar firms, we have participants across all sectors--including
healthcare, restaurants, manufacturing and construction, retail, non-
profits, IT, finance, and professional services, the largest group.
Participants span the globe--in addition to the U.S. and Canada, we
have companies in Europe, Australasia, South Africa, and Brazil. We
collect data from employees before they begin their new schedules, as
well as at six, twelve, and twenty-four months into their 4 day weeks.
We have also collected a small set of common metrics from the
organizations. The results have been extremely positive, for both
---------------------------------------------------------------------------
workers and companies.
First, the worker findings. We have twenty-six worker well-being
measures for more than 3600 employees who have completed at least two
surveys. On every metric, we find positive and statistically
significant improvements with the shift from a five to a 4-day
schedule. In our U.S. and Canada sample, 69 percent of employees have
lower burnout scores and 41 percent have lower stress. More than 40
percent report better physical and mental health. Two-thirds experience
more positive emotions. Anxiety and fatigue decline for 40 percent.
Nearly 60 percent score higher on questions about their ability to
achieve work-family balance. Sleep problems diminish. Ninety-five
percent of participants want to continue with this schedule. Findings
are very similar for our global and our large UK samples.
In survey comments and interviews, we hear that the new schedule is
``life changing,'' ``the best thing that's ever happened to me,''
``transformational,'' and that the trial has ``improved my life in
every possible way.'' Workers tell us about improvements in mental and
physical health, ability to spend time with family, and finally getting
a chance for time for themselves. We hear from people with disabilities
who credit the 4-day week with their being able to stay in the labor
force. One respondent reports that ``Had it not been for the pilot I
wouldn't have had the time or the availability to get medical
appointments and procedures which ultimately led to the early detection
of something that might've proved fatal.'' That something was cancer.
We also find that these results are durable--and not merely a
response to a novel schedule. At 12 months there is no reversion to
pre-trial levels, and for some measures, improvement continues.
In our statistical modeling, we investigate what is driving these
improvements in well-being. We find that it is reductions in hours
worked. \10\ These vary across the sample, as not everyone actually
reduces hours by the full eight per week. What we discovered is that
the larger the working time reduction, the greater the well-being
improvement. When we drill down farther, we find two main reasons for
the association between worktime reduction and well-being. The first is
reductions in sleep problems and fatigue. The second comes from a more
surprising, but integral part of the approach, which is that the 4-day
week results in large improvements in people's self-reported work
ability. We find that 57 percent of employees experience an increase in
their ``current work ability compared to their lifetime best.'' Self-
reported productivity also rises and 54 percent score higher on a
``work smart'' scale. The ways in which companies and individuals
prepare for the 4-day week leave people more in control of their
workloads, more energized on the job, and more capable. It's central to
why the model works, not just for employees, but for the organizations
who implement it.
---------------------------------------------------------------------------
\10\ Wen Fan, Juliet B. Schor, Orla Kelly and Guolin Gu, 2023,
``Does work time reduction improve workers' well-being?: evidence from
global 4-day workweek trials,'' https://osf.io/preprints/socarxiv/
7ucy9.
Let me say a word about our research methods. To assess employee
outcomes we use a within-subjects methodology, surveying employees
before and after the 4-day schedule is introduced. This avoids the
biases of retrospective and cross-sectional studies. While we do not
have a perfect way to establish causality, the finding that larger
reductions in hours yield more well-being improvement supports our
interpretation. To mitigate ``confounders,'' i.e. unmeasured trends
occurring simultaneously, we have adjusted for a wide range of socio-
demographic and socio-economic characteristics, as well as company
characteristics such as industry and size, which barely change the
findings. Our findings hold across various time periods, industries and
nations, suggesting that our results are robust and likely generalize
to different settings. In our ongoing trials we have added control
---------------------------------------------------------------------------
companies for comparison.
Let me turn now to our company findings. The most important number
here is 91 percent. That's the fraction of companies in our global
sample of 202 who have continued with the 4-day week schedule after at
least 1 year. Only 9 percent have gone back to a 5-day schedule. Among
the 60 U.S. and Canadian companies, only two, a mere 3 percent, have
reverted to 5 days.
Company performance metrics also show success. Among the U.S./
Canada companies, the resignation rate fell 22.5 percent. Absenteeism
declined 39 percent. The average revenue increase over the trial period
has been 30 percent. We do not have a common productivity measure in
large part because productivity is so difficult to measure in many
white collar settings and because measurement varies across
organizations. However, the companies rate the trial impact on
productivity at 7.7 out of 10. They rate the trial overall at 8.6 out
of 10. They rate the ability of the new schedule to attract employees
at 8.8.
Many observers are surprised by the fact that a reduction in hours
with no decrease in pay can work for companies. One reason is that they
are able to increase hourly productivity. The 4-day week global model
involves 2 months of preparation in which companies figure out ways to
improve efficiency. These vary by industry, but for many, streamlining
meetings and reducing distractions are key. Because standard hours have
been sticky at 40, companies become vulnerable to Parkinson's Law--work
expands to fill the available time. Even as they have gained many time-
saving digital tools, if hours are not reduced, inefficiencies can
creep in. This has been the case for many in the trials.
A key finding of our research is that the productivity improvements
companies report are not due to speed-up, but occur as a result of true
enhancements to work process and culture. Our employee metrics for work
intensity and the pace of work are mainly stable as measured before the
trial and at 6 months. In contrast, workers' self-reports of
productivity and work ability increase significantly.
But success involves more than just increasing hourly productivity.
Companies are also benefiting in other ways. For some of the
organizations in our trials, the main benefit is reduced burnout among
their employees, which in turn leads to improvements in employee
retention.
Less stressed, more committed workers may also lead to a higher
quality of service or production. This is of particular concern among
healthcare workers, and nurses in particular, who are the largest group
of healthcare workers in the U.S.. The high rates of not just
resignations, but nurses leaving the profession can be addressed with a
4-day week. After experiencing a loss of 50 percent of their inpatient
nurse leaders during the first two pandemic years, Temple University
Hospital instituted a 4-day week for them. Voluntary turnover fell to 0
percent and patient outcomes improved. \11\
---------------------------------------------------------------------------
\11\ Angelo Venditti, Barbara Cottrell, and Kimberly Hanson, 2023,
``Designing structures to support a 4-day workweek for nurse leaders,''
Nursing Management, October, pp-28-32. https://journals.lww.com/
nursingmanagement/citation/2023/10000/designing-structures-to-support-
a-4-day-workweek.5.aspx.
In our trials, we see a statistically significant reduction in
turnover intentions. Some companies report zero resignations after
starting the new schedule. Similarly, they find large increases in
their applicant pool when they can advertise a 4-day week. This is
especially crucial at the current moment, when there are so many
unfilled positions. \12\
---------------------------------------------------------------------------
\12\ Unfilled job vacancies from Federal Reserve of St. Louis
Economic Data. https://fred.stlouisfed.org/series/LMJVTTUVUSM647S.
Our research involves companies who have voluntarily decided to
shift to a 4-day week. It may be useful to note some of the features of
these companies, to address potential concerns of an economy-wide shift
to a 32-hour week. One concern is about small companies. We have a
preponderance of small companies in our sample--in the U.S./Canada
group, 78 percent of organizations have 50 or fewer employees. In part
that is an artifact of the trials--large companies can do this on their
own. However, employees at many small companies may be especially
---------------------------------------------------------------------------
suffering from burnout.
A second issue relates to flexibility. Companies in these trials do
not follow a one size fits all model. They are more like snowflakes--
every company does it differently. The ways in which they take time off
vary, as they plan, experiment and figure out the best model for them.
For example, only 60 percent have a Fridays off model.
Finally, one of the reasons these organizations are succeeding is
that the planning process involves productive collaboration between
workers and management to figure out how to make the new schedule work.
That collaboration is itself a benefit to the organization going
forward.
Governments around the world have become interested in the 4-day
week. In Spain, Portugal, Belgium and Scotland, national governments
have already sponsored trials. Interest is growing.
If we adopt a 4-day week it is likely we will find that
productivity growth not only makes worktime reduction possible, but
that the relationship goes both ways. Hours reductions can raise hourly
productivity. That has been the stated experience of both workers and
management in our trials. It is historically what scholars have
concluded from past reductions in worktime. \13\ And it accords with
international comparisons--the countries with the highest levels of per
hour productivity are those with the shortest worktime--Germany,
France, Netherlands, Norway, and Denmark. \14\
---------------------------------------------------------------------------
\13\ Gerhard Bosch and Steffen Lenhdorff, 2001, ``Working-time
reduction and employment: experiences in Europe and economic policy
recommendations,'' Cambridge Journal of Economics, 25:209-243; John
Pencavel, 2015, ``The Productivity of Working Hours,'' The Economic
Journal, 125(589):2052-2076.
\14\ Annual hours and productivity from TED. https://
www.conference-board.org/data/economydatabase/total-economy-database-
productivity.
I began my remarks by referencing the four-fold increase in
productivity that we have seen in the U.S. economy over the last 70
years. The fact that so little of that productivity increase has been
put toward reducing hours is in sharp contrast to the prior century. As
a result, American workers have been suffering from burnout and stress,
with families in special jeopardy. The pandemic exacerbated this pre-
existing problem. Given current robust rates of U.S. productivity
growth, \15\ the promise of further increases as a result of Artificial
Intelligence, and the fact that over the last 85 years, the statutory
workweek has been unchanged, I support the legislative effort to enact
---------------------------------------------------------------------------
a 32 hour workweek.
\15\ Productivity growth was 3.2 percent in Q4 of 2023. https://
www.bls.gov/news.release/prod2.nr0.htm
---------------------------------------------------------------------------
______
[summary statement of juliet schor]
We are here today because since 1938, there has been no reduction
in the standard workweek. Since 1950, the productivity of the average
American has risen by 400 percent yet full-time workers still log an
average of 41.9 hours per week. Average annual hours even rose in the
1990's, and have barely changed since then. These trends depart from
the steady reduction in hours between 1870 and WWII, and from trends in
other wealthy countries. The average American is on the job 400 more
hours a year than in Germany; 200 more than in France, Netherlands and
the UK; and 50 more than the average Japanese. This is despite the U.S.
being the world's first 5 day week country. This was the situation when
the pandemic hit, which brought with it extraordinary levels of stress
and burnout, the Great Resignation, and historically high vacancy
levels.
In response, an increasing number of employers are shifting to a 4-
day, 32 hour week, with no reduction in pay. I was asked to lead
research on their experiences, in collaboration with an NGO called 4
Day Week Global. To date, more than 300 companies around the world have
taken part in our trials. While the majority are white collar firms,
they include all sectors--healthcare, restaurants, manufacturing,
construction, retail, non-profits, IT, finance, and professional
services. In the U.S., two-thirds of these are small businesses, with
50 or fewer employees. The results have been extremely positive, for
both workers and companies.
We have twenty-six well-being measures for more than 3600
employees, every one of which registers improvement. In our U.S./Canada
sample, 69 percent have lower burnout scores. Nearly 60 percent
experience better work-family balance. Anxiety, sleep problems,
fatigue, physical and mental health all improve for roughly 40 percent
of workers. Participants tell us that the new schedule is ``life
changing,'' and ``transformational.'' One person reports that ``Had it
not been for the pilot I wouldn't have had the time or the availability
to get medical appointments and procedures which ultimately led to the
early detection of something that might've proved fatal.'' That
something was cancer.
For employers the most important number is 91 percent--the fraction
of companies who have continued with the 4-day week after at least 1
year. In the U.S./Canada group, only two companies have reverted to 5
days. Performance metrics reveal why. On average, resignations fell
22.5 percent. Absenteeism declined 39 percent. Revenue increased 30
percent. After losing 50 percent of their inpatient nurse leaders
during the first two pandemic years, Temple University Hospital gave
them a 4-day week. Patient outcomes improved and voluntary turnover
fell to 0.
If the U.S. adopts a 4-day week it is likely that hourly
productivity will rise. That has been the experience of workers and
management in our trials. Similarly, nations with the highest levels of
per hour productivity are those with the shortest hours--Germany,
France, Netherlands, Norway, and Denmark. I began my remarks by
referencing the fourfold increase in productivity that we have seen in
the U.S. economy since 1950. The fact that so little of that
productivity increase has been put toward reduced hours is in sharp
contrast to the prior hundred years. As a result, American workers have
been suffering from burnout and stress, with families in special
jeopardy. The pandemic exacerbated this pre-existing problem. Given
robust rates of U.S. productivity growth, the promise of further
increases as a result of Artificial Intelligence, and the fact that
over the last 85 years, the statutory workweek has been unchanged, I
support the legislative effort to enact a 32 hour workweek.
______
The Chair. Dr. Schor, thank you very, very much. Our next
witness is Jon Leland, the Chief Strategy Officer at
Kickstarter and Co-Founder of the nonprofit WorkFour. Mr.
Leland successfully introduced 4-day workweek at his company in
2022, and in his nonprofit work supports employers, unions, and
policymakers advancing the 32-hour workweek. Mr. Leland, thanks
for being with us.
STATEMENT OF JON LELAND, CHIEF STRATEGY OFFICER, KICKSTARTER
AND COFOUNDER, WORKFOUR-THE NATIONAL CAMPAIGN FOR THE 4-DAY
WORKWEEK, NEW YORK, NY
Mr. Leland. Good morning, Chairman Sanders, Dr. Cassidy,
and Members of the Committee. As the Chief Strategy Officer at
Kickstarter, I bring a unique perspective to this panel, having
both implemented and experienced a 4-day workweek in our
company of 118 employees.
Our journey began during the pandemic, a period that
completely upended traditional work norms and demonstrated just
how ingrained and potentially outdated some of our assumptions
are around work.
But the pandemic also clarified that the time we have with
our families and loved ones is the most valuable thing that we
have. Kickstarter is a data driven company and we were
initially driven by repeated studies and success stories
demonstrating that a 4-day workweek could benefit both
businesses and employees.
We also recognized some common sense around how a 4-day
workweek could work. Hours worked is a factor in productivity,
but it is not determinative. Efficiency, focus, and employee
retention are all equally or more critical. And people are
tired. Workers are already finding ways to rest at work. They
are surfing the internet. They are just slowing down. They are
stepping away just to get the energy to get through the
workday.
I would rather just give people back their time so they can
properly rest. In April 2022, we initiated a 6-month pilot. Our
goal was to maintain or improve overall productivity. And to do
that, the bargain we made with our employees was simple.
They would get back an extra day every week, retaining the
same salary, the same benefits, and in exchange, we expected
them to manage their time effectively, show up to work every
week rested and ready to go, and get the job done.
We were not going to scale back our ambitions or our goals
to accommodate the 4-day workweek. And the results of our pilot
were clear. Our goal achievement rate soared from 62 percent to
95 percent. Customer response times and satisfaction ratings
stayed the same. Employee retention increased from 82 percent
to 98 percent, all while reducing average weekly working hours
by 9 hours a week for each employee.
We made the decision to stick with the 4-day workweek and
have kept it for 2 years. The most profound change, however,
has been the impact to our employees. In just 2 years, we have
been able to return nearly 10,000 days to our 118 employees.
That is more than 27 years.
Those are our years of spending time with family and their
children, volunteering in their communities, learning new
skills, and taking care of their health. The value of that time
is priceless and ultimately has been the greatest outcome of
our transition to a 4-day workweek. The 5-day workweek is not
an immutable law of nature. It was not written on the tablets.
It was established 84 years ago here in the U.S..
Critics of the 5-day workweek back then also predicted
doom. They worried that a weekend would destroy the American
economy. Instead, it helped launch us to the front of the
global pack. Entire industries of recreation and leisure were
born.
The American middle class became the envy of the world, and
the weekend became a time when families and communities came
together, with a century of profound changes in our workforce
and technology. With AI looming on the horizon, it is time for
a much needed update.
The studies echo what we learned at Kickstarter that when
piloted, the 4-day workweek works. All 35 North American
companies that piloted the 4-day workweek with us in 2022 have
kept it. If it didn't work, for profit companies would abandon
it. You don't need theories or advanced data, you just need to
see that the companies that tend to pilot this tend to stick
with it. This is not just tech companies either.
These are manufacturing companies, health care facilities,
restaurants, and police departments that are making this
transition. This is a shift that can and must benefit all
workers in our society. That is why the bill introduced by the
Chairman is so important.
It would ensure that we are defining a new standard for our
workweek that benefits all workers in our economy, not just the
most privileged. With the opportunity we have now, it is
important to ensure that all American workers and our
communities reap the dividends.
The 4-day workweek is an issue backed by data that
Americans of all stripes in poll after poll say matters to
them. Before us is the opportunity to deliver a boost to our
economy and happiness to every American worker, to strengthen
American families and communities. The original weekend did
just that, and it is time to do it again.
[The prepared statement of Mr. Leland follows.]
prepared statement of jon leland
Introduction
Chairman Sanders, Ranking Member Cassidy, and Members of the Senate
Health, Education, Labor, and Pensions Committee, I appreciate the
opportunity to testify on the need to transition to a shorter workweek,
with no loss in pay, for the benefit of our economy, society, and our
people.
My name is Jon Leland and I am the Chief Strategy Officer of
Kickstarter, the largest crowdfunding platform for creative projects.
We have 118 employees across the country and every year we help about
20,000 entrepreneurs, creators and artists fundraise $700M to launch
new businesses and projects. I am also the co-founder of WorkFour, the
national campaign for the 4-day workweek. We are an entirely volunteer-
driven organization dedicated to supporting the transition to a shorter
workweek for the benefit of all workers, businesses, and society.
Data and Common Sense Led Kickstarter to Pilot a 4-Day Workweek
The COVID-19 pandemic upended work for everyone. Suddenly, the
norms around where, when, and how work got done shifted radically.
Kickstarter, like many companies, pivoted to being a fully remote
company, and we adapted quickly to new forms of working together. That
shift demonstrated just how ingrained, and potentially outdated, some
of our assumptions are around the way we work. But the pandemic also
clarified something else--that the time we have with our families and
our loved ones is the most valuable thing in our lives, an insight that
made us more critically assess the time we do spend at work.
Kickstarter is a data-driven organization, and our interest in the
4-day workweek began with the mounting evidence that a 4-day workweek
can work for the mutual benefit of businesses and its employees.
Studies from trials in Europe and success stories from pioneering
organizations in the U.S. all showed that this was possible. Poring
through the research led to a simple conclusion: the data was good.
We also knew that our employees were stressed, trying to balance
work and their personal lives--particularly employees with young
children at home. Smartphones have connected us to the world in real
time, while letting work follow us around everywhere we go. We wanted
to give our employees the time and space to attend to the rest of their
lives, enabling them to be their best selves at work.
Finally, we recognized the common sense behind the data that showed
the 4-day workweek works. Hours worked is a factor in productivity, but
it's not determinative. Efficiency, focus, and employee retention are
all more critical in driving organizational output. And the truth is, a
lot of time at work is not used efficiently. Companies take up too much
time meeting inefficiently, engaging inessential tasks, or performing
the theater of work. Additionally, with an epidemic of burnout, workers
are already finding ways to rest at work. They're surfing the Internet,
working slowly, or just stepping away for a time to get the energy to
continue with their workday.
We were faced with a choice: we could either demand our employees
give us time that wasn't being used effectively and efficiently, or we
could strip the inefficiencies in our work and give time back to our
employees to properly rest. Armed with the data from studies and pilots
from around the world and with input from stakeholders across the
organization, we opted for the better approach--the 4-day workweek.
Once we decided we wanted to pilot a 4-day workweek, we quickly
found support from our board and our employees for a pilot. We were
actually in the middle of negotiating the first collective bargaining
agreement with our newly formed union, who were pleasantly surprised by
management's desire to move to a 4-day workweek, and we worked together
on a provision in our CBA to facilitate policies for the pilot.
How Kickstarter Adapted to a 4-Day Workweek Without Losing Productivity
Our goal in transitioning to a 4-day workweek was to maintain or
improve overall productivity, while consistently giving employees more
time back in their week. The bargain we made with our employees was
simple: they would get an extra day back every week while retaining the
same salaries and benefits, and in exchange, we expected them to manage
their time effectively, show up to work every week rested and ready to
go, and get the job done. We weren't going to scale back our goals or
ambitions to accommodate the 4-day workweek.
Kickstarter joined the first joint pilot in the U.S. that kicked
off in April 2022, which was organized by 4 Day Week Global and an
earlier iteration of the WorkFour campaign. Transitioning to a 4-day
workweek required the active participation of every level of our
company, and it didn't happen overnight. For executive leadership, the
transition required us to set tightly focused goals for our teams,
establish clear success metrics, and reaffirm a culture of high
expectations and high trust. The 4-day workweek requires leaders to be
sharper and clearer--there's less room for error in our own
performance. That's a challenge we embrace. At the team level, we
significantly trimmed meeting time, and identified and reduced the
lowest impact work. Almost any employee you talk to could tell you a
few ways that their job wastes their time. The 4-day workweek is an
opportunity to collectively identify and strip away those
inefficiencies. At the individual level, we expected our employees to
manage their time effectively, and show up to work more focused and
more motivated.
Different teams had to make different adjustments. Our product
teams focused on improving their development processes. Our support
teams, which have to respond to user tickets and issues 7 days a week,
invested in additional automation and extended their weekend rotations
to cover 3 days instead of two. Our creator success team, which works
with our top accounts, proactively set expectations with creators that
we would be less responsive on Fridays, but would still be available if
the matter was urgent. Nothing we did was radical or revolutionary, but
working together with the shared benefit of a shorter workweek, we were
able to structure our work to fit a 4-day schedule.
Outcomes of the 4-Day Workweek for Kickstarter and its Employees
Data informed our decision to trial a 4-day workweek, and we used
data to assess the success of our pilot. We measured our performance by
whether we were able to hit our overall goals, maintain our user
response times and satisfaction, and actually reduce working hours. The
outcomes were clear. In the 6-months of the pilot, our ability to hit
our company goals jumped from 62 percent to 95 percent. Our response
times and user satisfaction remained the same. Satisfaction with work-
life balance increased from 48 percent to 81 percent. Employee
retention rose from 82 percent to 98 percent. We managed these outcomes
while reducing, on average, staff working time by 9 hours a week. Faced
with the data of our experience, we made the decision to maintain our
4-day workweek going forward.
It has now been 2 years since we adopted the 4-day workweek and the
benefits persist. We rarely see an employee choose to leave the
company. That means our teams stay together longer, work together
better, and our turnover costs are reduced. Meetings are like weeds and
need to be occasionally cut down to keep us working efficiently.
Maintaining focus and clarity in how we direct the company remains
critical for supporting our staff in hitting their goals in fewer hours
each week.
For as beneficial as this shift has been for us as a company, it is
a profound change for our employees. In just 2 years, and with a staff
of about 100 people, we've been able to return nearly 10,000 days to
our employees. That's more than 27 years. Those are years of our
employees spending more time with their children and families,
volunteering in their communities, learning new skills, and taking care
of their health. The value of that time is priceless, and ultimately
that has been the greatest outcome of our transition to a 4-day
workweek.
Building the National Campaign for the 4-Day Workweek
Motivated by the success of Kickstarter and other companies across
America, my co-founder Jon Steinman and I established WorkFour not just
to help accelerate this change that we believe will benefit everyone--
and that so many of us are clamoring for--but to help ensure the
transition benefits everyone. Our economy has not always delivered
fairly to all who help power it forward. Returning invaluable time to
everyone who participates in our economy is the right decision and a
smart re-investment that the United States should make in its people.
The 5-day workweek is not an immutable law of nature, it was
established 100 years ago here in the United States. It was the product
of visionary leadership from policymakers, unions, and private industry
who recognized that our economy was built on far more than hours
clocked and products shipped. The economy is all of us, too, working;
it's all of us going to the office, climbing into the cab of a long
haul truck, donning the welder's mask. Critics of the 5-day workweek
predicted doom, as they worried that a weekend would set the United
States' economy back. Instead, it helped launch us to the front of the
global pack. Entire industries of recreation and leisure were born, the
American middle class became the envy of the world, and the weekend
became the time when families and neighbors came together.
Now, it's time for a much overdue update.
Enormous advances in technology helped enable the original weekend,
and the same is going to be true for expanding it. Sophisticated
technology is further driving corporate efficiencies and innovation;
productivity and profits are soaring. With the rapid development of
applied Artificial Intelligence in the workplace, we are on the verge
of even more change. Bill Gates \1\ and Jamie Dimon \2\ are already
predicting the need to transition to a three or three and a half day
workweek. Change isn't coming, it's upon us--our generation's choice is
what we make of it. With the opportunity we have now, it's important to
ensure all American workers and our society reap the dividends.
\1\ Royle, O. R. (2023, November 23). Bill Gates teases the
possibility of a 3-Day work week. Fortune. www.fortune.com/2023/11/23/
bill-gates-microsoft-3-day-work-week-machines-make-food/.
\2\ Jljenniferliu. (2023, October 3). JPMorgan CEO Jamie Dimon
says Ai could bring a 31/2-day workweek. CNBC. www.cnbc.com/2023/10/03/
jpmorgan-ceo-jamie-dimon-says-ai-could-bring-a-3-day-workweek.html.
The latest round of studies continues to echo what we've already
learned: when piloted, the 4-day workweek produces increased
organizational efficiency, happier employees, and lower rates of
turnover. All 35 North American companies that piloted a 4-day workweek
with us in 2022 have kept it. These are individual organizations
achieving individual results. If it didn't work, for-profit companies
would abandon it. You don't need theories or advanced data, you just
need to see that the companies that try it, almost always stick with
---------------------------------------------------------------------------
it.
As with the original weekend, when the 4-day workweek is the norm,
the benefits will scale across society. Research suggests that beyond
improved workplace productivity and employee well-being, communities
and families will benefit as will our environment \3\--and perhaps our
civic bonds as well.
---------------------------------------------------------------------------
\3\ Colombo, G. F. and S. (2023, May 18). The climate benefits of
a 4-day workweek. BBC News. www.bbc.com/future/article/20230220-is-a-4-
day-workweek-good-for-the-climate.
At WorkFour, we're supporting the employers, unions, and
policymakers at the forefront of this transition. We've worked with
employers across the country who have successfully adopted a shorter
workweek, and these are not just white-collar companies. Advanced RV is
a manufacturer in Willoughby, Ohio, who builds custom mobile homes.
They moved to a 4-day workweek in 2022, finding efficiencies that
enabled them to maintain their output while dramatically improving the
well-being and happiness of their employees. 4C Health is a behavioral
health provider in Indiana employing hundreds of workers and serving
thousands of patients. Facing a worker shortage in healthcare, they
moved to a shorter workweek, which improved productivity, retention,
and recruitment and decreased clinician burnout by 50 percent. The
Golden, Colorado Police Department launched a 4-day, 32-hour workweek
in July 2023. Six months in, they found that their response times
improved, burnout amongst officers decreased, and the city saved
$115,000 in overtime compensation. \4\ ThredUp, a clothing retailer and
publicly traded company with 300 employees, made the shift to 4 days
permanent after a successful 1-year experiment, citing improved
employee morale and increased productivity. This is a transition that
can and must be made across industries, for the benefit of all workers.
---------------------------------------------------------------------------
\4\ Aguilar, J. (2024a, February 20). Golden Police's 32-hour
workweek-for 40-hour pay-resulted in faster emergency response times,
Data Show. The Denver Post. www.denverpost.com/2024/02/20/four-day-
week-golden-police-results-productivity-response-times/.
We're proud to have helped support and introduce legislation in 10
states to advance the 4-day workweek, along with the bill introduced by
Rep. Mark Takano, in the House of Representatives. Policymakers have a
critical role in facilitating an equitable and smooth transition to a
4-day workweek through pilots, incentive programs, and policy
---------------------------------------------------------------------------
adjustments.
We appreciate the engagement of this Committee and the Senators in
attendance today. We also appreciate that it's an election year, and
there's plenty of partisanship to go around. But the 4-day workweek is
an issue, backed by data, that Americans of all stripes, in poll after
poll, say matters to them. Before us is the opportunity to deliver a
boost to our economy and happiness to every American worker. The
original weekend did just that.
It's time to do it again.
______
The Chair. Mr. Leland, thanks very much. Senator Cassidy,
do you want introduce your witnesses?
Senator Cassidy. Please. First, Dr. Liberty Vittert is a
Professor of the Practice of Data Science at the Olin Business
School at Wash. U. in St. Louis. She is a Senior Fellow at
Harvard University and MIT researcher, on air statistician from
News Nation, two Discovery Channel shows, and analyzes and
calls elections for Decision Desk HQ, and is featured in a
number of publications.
Has a great resume for academics. But what is most
interesting about Dr. Vittert is that she studied at Le Cordon
Bleu. So, we actually have someone here who knows how to cook
something more than pancakes, which, no offense, I am sure
others do as well. Anyway, so we--you would call it a crepe.
Anyway, so we are pleased to have you.
STATEMENT LIBERTY VITTERT, PROFESSOR OF THE PRACTICE OF DATA
SCIENCE, OLIN BUSINESS SCHOOL, WASHINGTON UNIVERSITY IN ST.
LOUIS, ST. LOUIS, MO
Dr. Vittert. I should have made some chocolate chip cookies
for the group. Chairman Sanders, Dr. Cassidy, Senator
Hickenlooper, thank you so much for having me here today. I am
a statistician, and we have heard a lot of statistics thrown
around.
I am here to make some sense of these and make sure we are
analyzing them properly. Proponents of the 32 hour workweek
often point to statistical studies, mostly pilots, that suggest
shorter workweeks can lead to increased productivity and
improved employee well-being.
But this argument is making broad claims based upon weak
and statistically flawed data sets. A closer look at some of
the most popularly cited studies reveals significant flaws and
limitations. We will take a brief look at some of these studies
to understand these statistical flaws and shed significant and
potentially insurmountable doubt on the proposal's
sustainability in the American work economy.
Many of the news headlines touting these studies discuss
the stress or happiness levels of workers who work less time.
Inevitably, over the short term, in these short pilot projects,
it is not inconceivable to imagine that happiness levels
increase. The question is where does the pendulum end?
At no work. Statistical studies, long term statistical
studies of this, have shown us that happiness does not increase
over time, it goes back to the same level. For example, the
study in France, after a mandatory Government reduction of
hours, saw a return to the same level of happiness after 7
years.
If you want to see those same employees really stressed
out, just see what happens where their employers lay them off
to hire part time workers instead or have to close their doors
because they cannot make enough revenue. Another major flaw in
these studies is the self-selection bias.
For example, the companies that choose to participate in
some of these studies, like the Four Day Week Global Study, are
companies whose work tend to be able to be adapted to a shorter
workweek already. Who can remove ``wasted hours.''
Specifically, only companies that are able to adapt to
shorter workweek that tend to participate. Cutting out, as they
say, extraneous meetings, coffee breaks, having more
independent work, going to Zoom.
However, over 70 percent of the U.S. job economy is people
working with their hands. They don't necessarily have
extraneous meetings or too many coffee breaks to cut out. So
statistically, you can't apply this type of cutting of hours
across the entire economy.
Also, given the types of companies that are potentially
capable of cutting their workweek, we could see a divide of the
rich getting richer, having more time, and the poor needing to
take on three part time jobs in order to pay the bills.
We also potentially disadvantage older workers who cannot
necessarily physically do the same amount of work in a shorter
time. This happened to the great detriment of that population
during the Great Depression.
In terms of increased productivity, by shortening the week,
the statistics just aren't there, and there are specific
studies that show the opposite. Japan tried it, as Dr. Cassidy
said, from 1988 to 1996, and the result was not ambiguous.
Economic output fell by 20 percent. Another largely touted
study was in Iceland, which had a pilot program cutting the
workweek by about 4 hours from 2015 to 2019. The results were
blasted all over the headlines as this overwhelming success.
What is not reported on is that the Icelandic government,
or rather taxpayers, now have to shell out almost $30 million
extra a year to hire more health care workers because of this
experiment. In Spain, where there is a pilot program, the
companies that participate get access to a multi-million dollar
government fund in order to participate.
Microsoft also tested a 4-day workweek by shutting down its
Japan office every Friday for the month of August. The
statistical claim is that this resulted in a 40 percent
increase in productivity.
This is a statistical fallacy that correlation is not
necessarily causation. Productivity increased over a very, very
short period of time during a low productivity month when
overall productivity was already at a 75 year low. There is no
statistical evidence to merit a nationwide mandate of a 32 hour
workweek.
In fact, there is clear evidence against it. If it works
for some companies in some sectors, that is great. But it
cannot be applied to all sectors. Thank you.
[The prepared statement of Dr. Vittert follows.]
prepared statement of liberty vittert
Flaws in Statistical Studies on the 32-Hour Work Week: A Critical
Examination
The idea of a 32-hour work week has gained a significant following
as a solution to modern workplace challenges i.e. burnout, stress, and
work-life balance. Proponents often point to statistical studies (pilot
programs in general) that suggest shorter work hours can lead to
increased productivity and improved employee well-being. The argument
for the 32 hour week is much more tendentious, making broad claims
based on weak and flawed data sets. A closer look at some of the most
popularly cited studies reveals significant flaws and limitations that
call into question their reliability and validity. We will take a brief
look at some of these studies to understand the statistical flaws that
shed significant and insurmountable doubt on the proposal's
sustainability in the American work economy and threaten what makes our
Nation's future prosperity possible.
Productivity:
The definition of productivity is very different throughout these
statistical studies, as is the measure of success. Is it sales per
agent? Is it company revenue? Is it country GDP? Or, in most cases, is
it simply self-reported data by the employees? There are no clear
statistical studies showing that in the long-term, less hours would
produce more productivity unless productivity is already low or any
increase is simply along the same lines as regular expected and planned
for increases in a company's yearly outlook. A large statistical study
was already conducted in Japan on this topic. From 1988 to 1996 (the
longest study I have found), Japan shortened the work week from 46 to
30 hours. The result was not ambiguous: Economic output fell by 20
percent. Productivity simply could not increase enough to compensate
for the country's economic loss. Ignoring these major studies is what
we call in statistics ``cherry-picking''--only choosing the studies, or
rather pieces of studies, that suit our particular point. In Japan,
Microsoft also tested a 4-day work week by shutting down its Japan
office every Friday during the month of August. The claim is that this
resulted in a 40 percent increase in productivity. But if that's true,
then why aren't they doing this everywhere Microsoft operates? Again,
the answer is simple: Productivity increased over a very short period
of time during a low-productivity summer month, when overall
productivity was already at a 75-year low. This clearly also does not
show Japan's productivity across multiple sectors, only one very
particular company, giving us absolutely no statistically valid
insight. Multiple studies that have shown some increase in productivity
are not necessarily not looking at shortened hours (i.e. 40 to 32 hours
per week) but rather a shortened work week (i.e. working 10 hours per
day for 4 days). This is not the proposal here and provides possible
consequences like more accidents, insufficient quality in product
production or potentially more stress for workers.
On this note, advocates of the 32 hour work week often cite a study
out of Iceland conducted between 2015 and 2019 (cutting from the
traditional 40 hours to a 35-36 hour work week), which purportedly
found positive outcomes associated with shorter work hours. However, a
critical examination of the statistical methodology used in this study
reveals significant flaws that call into question its validity and
generalizability.
The Iceland study introduces several methodological challenges. For
instance, the study relied on self-reported data (the employees who are
directly affected by the study are reporting on themselves), which is
susceptible to severe biases. Additionally, a lack of randomization in
assigning workers who choose to participate in the pilot program versus
the `control' (does not reduce hours) can cause serious statistical
selection bias and confounding variables.
Furthermore, two think tanks that heavily lobby the government for
shorter working weeks base their case on this study. But the first
thing to note is that many of the cited studies didn't actually test a
4-day week at all. Rather, it shortened their overall hours in a 5-day
week. We need to be clear when discussing a ``4 day work week'' versus
``number of hours worked''. For example, a large study in Belgium only
looked at a condensed work week i.e. the same number of hours just over
a shorter period. The Iceland trial only included a little more than 1
percent of that nation's workforce. However, in terms of economic
output and productivity, it had negative consequences in specific
field. The Icelandic government had to expend almost $30 million extra
each year to hire more healthcare workers because of the experiment.
It is clear from the trial participant's own language and the study
conductors that a key to any success in this study was removing
``wasted hours'' at work. For example, work meetings were shortened or
coffee breaks were reduced. This type of pencil-cutting is clearly not
feasible for the vast majority of the job economy. While the study
touts that roughly ``86 percent of Iceland's population has either
moved to shorter working hours or have gained the right to shortened
their working hours'' that is highly statistically misleading. Large
groups of workers had their work week shortened by 18 minutes, not
hours.
Even further studies show that the only way a program can succeed
by having less hours for the same pay is with government subsidies. For
example, Spain started a trial program in December 2022 with the pilot
helping businesses cut their working week by half a day without
reducing salaries. However, companies that choose (again self-
selection) to do this, are eligible to receive aid from a multimillion
dollar government fund. A study by 4 day week global showcased revenue
increases during their 6 month trial period with hiring increasing.
Without sounding too repetitive, self-selection of the companies
participating in this study is crucial for the statistical veracity.
Smaller companies are probably hiring more. In the short-term, more pay
for less work could increase hiring. Last, period of the trial was from
June 2022-December 2022, while recovery was high anyway-an increase in
revenue could have been correlation and not causation.
Stress and Happiness
Many of the news headlines touting these studies discuss the stress
or happiness levels of workers who work less time. Inevitably, over the
short term, it is not inconceivable to imagine that happiness levels
increase--the question is where does the pendulum end--at no work?
Statistical studies show that it doesn't actually matter if we decrease
the work time in the long run-workers' happiness fails to improve over
these long-term studies. For example, in France, the government
mandated the reduction of the standard work week from 39 hours to 35
hours. There was no evidence that this increased workers' happiness and
in fact, decreased it, due to the need of companies to hire part-time,
cheaper, workers. Worker satisfaction in general is not at a terrifying
low-in fact personal well-being levels have increased in many countries
according to census data. As with the study in Iceland, this data is
self-reported and therefore highly susceptible to statistical fallacy.
But more importantly, we need to examine long term effects. How will
workers feel when they don't have a job anymore because the company had
to close due to lose productivity and profits or when the company
hires, cheaper, part-time labor, or when they have to work two jobs in
order to make the same income because of this? Multiple studies show
these long-term poor effects on workers' stress and happiness.
Concurrently, many companies that participate in these studies, one
would imagine, feel the need to keep going i.e. they are self-
selecting. Imagine over a 6 month period you give your employees the
same pay for 32 hours of work instead of 40 hours of work but then tell
them they need to go back to 40 hours of work for the same pay. Even
the largely touted 4 day week Global study says in their own words
``The initiative, which only involves companies whose work can be
adapted to a shorter workweek, is led by Berlin-based management
consultancy Intraprenhr together with the non-profit organisation 4 Day
Week Global (4DWG).'' By definition, this concept and any statistical
findings from it cannot be extrapolated to the work economy at large.
It is specifically only companies that are able to adapt to a shorter
workweek by cutting out, as they say, extraneous meetings or having
more independent work. Over 75 percent of the U.S. job economy is
people working with their hands, they don't have extraneous meetings or
too many coffee breaks to cut out. Statistically, you cannot apply this
generality across all types of companies by any stretch.
Polarization of Labor Markets
Given the types of companies that are potentially capable of
cutting their work week, we could see a divide of the rich getting
richer (or working less time) and the poor needing to take on part time
jobs. Given our largely aging population, we also potentially
disadvantage older workers who cannot necessarily physically do the
same amount of work in a shorter time. For example, this was the case
in the United States when the work week was reduced during the great
depression. This is all to say that the current statistical studies do
not show us what the long-term effects are on a country's workforce and
economy. Imagining that a 6 month or 2 year study will show us this is
statistically dangerous.
This also does not account for the workers that companies will have
to bring in to make up for like the loss of workers in the Iceland
study that the government needed to make up for. But there are even
larger effects. Given the potential need for companies to hire part-
time workers to ensure that productivity does not decrease (or to man
the phones on Fridays), part-time unemployment could potentially
increase significantly which are usually associated with lower-paying
jobs and lack of benefits.
The trial by 4 day week global showed many of these issues. First,
it was not a full reduction of hours from 40 to 32 hours. The study
required a ``meaningful reduction'' which is not defined from my
inspection. Second, it is self-selected companies (a majority of which
had less than 25 workers) and the companies that had issues with this
short trial were specifically ``reliant on continuous client engagement
or time-sensitive deliverables''. This, by definition, is a majority of
the work economy in the United States.
______
[summary statement of liberty vittert]
Flaws in Statistical Studies on the 32-Hour Workweek: a Critical
Examination
There are significant statistical flaws in all of the studies I
have examined and are regularly touted as proof of concept for the
shortened workweek. There are also many overlooked studies that show
the true detriment to both the workers and the economy of the country.
Based on this, in my testimony today I will make four main points:
First, productivity does not necessarily increase with a shortened
workweek in the long-term. Besides the issue of defining exactly what
productivity or success means in different companies or countries, we
have seen in multiple studies that long-term there is a significant
decrease in productivity as measured by the country's GDP (a study in
Japan run from 1988 to 1996) where economic output fell by 20 percent
after a significant reduction in working hours.
Second, there is a large self-selection issue of companies
participating in these studies such as with the 4 Day Week Global
study. The companies are choosing to participate, potentially meaning
that they are small and trying to grow (enticing new workers) or are
capable of reducing hours by removing extraneous meetings, coffee
breaks etc., a point made by the study conductors themselves. Given
that 75 percent of the workforce in the United States works with their
hands, there are no extraneous meetings to cut out.
Third, a study in Iceland that is widely cited as a measure of the
success of the shortened workweek, fails to mention that the Icelandic
government had to expend almost $30 million extra to hire more
healthcare workers because of the experiment. This is also the case
with a study in Spain where companies that participate in the pilot
were also eligible for a multi-million dollar government fund to help
subsidize.
Fourth, the concept that this reduction in hours will automatically
increase happiness and decrease stress long-term is statistically
flawed. For example, in France, the government mandated the reduction
of the standard workweek from 39 hours to 35 hours. There was no
evidence that this increased workers' happiness and in fact, decreased
it, due to the need of companies to hire part-time, cheaper, workers.
Should workers not have jobs, or have to work two jobs since with this
plan companies are incentivized to hire part-time workers instead,
stress and unhappiness will surely increase.
______
Senator Cassidy. Thank you, Ms. Vittert. Next is Mr. Roger
King, a Senior Labor and Employment Counsel at the HR Policy
Association, which represents the chief human resource officers
of nearly 400 of the largest businesses.
He is highly regarded as a labor relations attorney. Career
spanning more than 40 years. He began out of law school as a
counsel for this Committee. He told me he was a peer with Angus
King, one of our colleagues, and that he in his day worked with
Robert Taft Junior, a very young Teddy Kennedy, Jacob Javits,
and others.
It is like a homecoming week for you. Thanks for being
here, Mr. King.
STATEMENT OF ROGER KING, SENIOR LABOR AND EMPLOYMENT COUNSEL,
HR POLICY ASSOCIATION, ARLINGTON, VA
Mr. King. Thank you very much. Mr. Chairman, Dr. Cassidy,
Members of the Committee, it is indeed a distinct honor to come
back before this Committee again. I had great experiences here
working with Robert Taft Jr., Fritz Mondale, Ted Kennedy, Jack
Javits. And, yes, Angus King and I used to go out for an adult
beverage now and then in this community.
Thank you again for having me back. And I am appearing
here, Dr. Cassidy as you mentioned, on behalf of the HR Policy
Association. We represent approximately 10 percent of the
private sector workers in this country through our corporate
members. I would like to start the discussion about mandating
32 hours over 8 hours, over 12 hours.
These are concepts that have consequences. This proposal
only works if you reduce 8 hours a workweek and have the
workers have the same level of productivity that they had at 40
hours. It just doesn't work in many industries. It doesn't work
economically. It doesn't work operationally.
Then what we have is what I call a productivity gap, where
we have work that is not getting done for the 32 hour workweek
situation. How do you fill that productivity gap? And as you
mentioned, Senator Cassidy, the inflationary impact of this
type of proposal is considerable.
I noted this week that the U.S. Bureau of Labor Statistics
said that we have inflation at 3.2 percent, ticked up from
January. Our core inflation is 3.8 or more. Well beyond the 2
percent target rate for the Feds.
This is bad policy as it results to the consumer. So, what
do I mean by that? If you can't fill the productivity gap by
cutting back hours or making some adjustments in your business,
you pass on added costs to the consumer. You have to pay for it
some way.
The other very important point I would like to make at the
beginning of my testimony is flexibility is the most important
thing that we are hearing from workers today. They want as much
flexibility as possible as to how, when, and where they perform
work.
The proposal of the Chairman, and all due respect, is going
to interfere with that flexibility. Workers today want to be
able to spend more time with their families. I certainly agree
with the panel of witnesses on that point. They also want to
select though, as I said, when, where, and how they work.
Let's go to the history of the Fair Labor Standards Act
just for a moment. It has been mentioned already numerous
times. If you go back and look at the history of the New Deal
and why President Franklin Roosevelt was initiating this
proposal, it was to increase the number of jobs in the country.
The evidence is clear. That proposal was put in place by
the Congress to increase the number of Americans to come to the
workplace. The proposal of the Chairman will require the
creation of more jobs, especially, part-time jobs. We already
have a tremendous shortage of workers.
Industry after industry doesn't have enough workers today.
This proposal for many employers will cause even further worker
shortages. The flexibility factor is a problem. Now, we do
commend the Chairman and this Committee for having a hearing on
the impact of AI. It is considerable.
Senator Cassidy, I think your suggestion for a bipartisan
discussion is excellent. We would welcome that. There is no
question AI can increase productivity. And there is no question
that increased wealth can occur. This is what I call the AI
dividend wealth. And we agree that workers and employers alike
should share in that wealth. But the way to go about that is
let the market determine that distribution of wealth.
If Mr. Fain's union can negotiate a 32 hour workweek, so be
it. If he can convince the auto worker companies in this
country to do it, so be it. But let the market determine how
the distribution of wealth is to occur.
Finally, as an overall point, we commend the Committee for
starting a discussion about the Fair Labor Standards Act. This
is one of the most litigated statutes in the country. Mr.
Chairman, you are absolutely correct, we need to reexamine it.
The amount of litigation that occurs regarding the Fair Labor
Standards Act is way over the top. We need to address more
clarity in this statute.
I have listed in my testimony a number of problems with the
32 hour workweek. I would close with this comment. I just saw
the Senator's bill last night, and it is even more extreme than
I had thought we were going to be discussing today.
The requirement to pay overtime over 8 hours will be a
significant economic adverse impact on many companies, and the
requirement to pay double time over 12 hours. I think the only
state in the country that does that is California.
That, from our perspective, is quite extreme. One last
point is an example, just to bring this home, health care
employers in this country generally employ registered nurses
for three 12 hour shifts.
It is not just four--they have gone to three workdays, but
they are 12 hour shifts in a work week. And that works by and
large. But this proposal would require between that 36 and 32
hour, 4 additional hours of overtime, and additionally, it
would require overtime over 8. That is going to have a very
negative impact on the health care community in this country
and cause health care expenses to go up.
The solution for the health care community is to get more
nurses, more workers into the employment stream, not to impose
strict standards that will cripple employers and cause
incremental costs. Thank you very much.
[The prepared statement of Mr. King follows.]
prepared statement of roger king
Chairman Sanders, Ranking Member Cassidy, and Members of the
Committee:
Thank you for the opportunity to again testify before the
Committee. Each time I appear before this Committee, it is a special
privilege as one of the first employment positions I had after
graduating law school was serving as a professional staff counsel for
the Committee. In that capacity, I had the opportunity to work for
Senator Robert Taft, Jr., Senator Jack Javits, Senator Ted Kennedy,
Senator Walter Mondale, and many other outstanding and influential
members of the Senate.
This morning, I am appearing on behalf of the HR Policy Association
where I serve as the Senior Labor and Employment Counsel. HR Policy is
a public policy advocacy organization that represents the chief human
resource officers of more than 350 of the largest corporations doing
business in the United States and globally. Collectively, their
companies employ more than 10 million employees in the United States--
nearly 9 percent of the private sector workforce. Since its founding,
one of HRPA's principal missions has been to ensure that laws and
policies affecting human resources are sound, practical, and responsive
to labor and employment issues arising in the workplace. My
biographical information \1\ is attached to my written testimony. I
respectfully request that my written testimony and the exhibits thereto
be included as part of the record of the hearing.
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\1\ Mr. King is a graduate of Miami University (1968) and Cornell
University Law School (1971). Mr. King is a member of the District of
Columbia and Ohio State Bar Associations, and his professional
experience includes serving as a legislative staff assistant to Senator
Robert Taft Jr. and professional staff counsel to the United States
Senate Labor Committee (1971-1974), associate and partner with Bricker
& Eckler (1974-1990), partner and of counsel at Jones Day (1990-2014),
and Senior Labor & Employment Counsel at HR Policy Association
(2014Present). Mr. King acknowledges the assistance of Daniel Yager,
his colleague at the HR Policy Association, in the preparation of his
testimony.
Initially, I want to note that the Association is not opposed to
32-hour workweeks or other non-traditional workweek configurations that
make operational and financial sense for employers and provide
flexibility for employees. We are, however, opposed to amending the
Fair Labor Standards Act (FLSA) to change the overtime requirements for
nonexempt employees from 40 hours to 32 hours. \2\ We agree with
Senator Sanders' objective of holding this hearing to explore options
for employees to share any ``AI wealth dividend'' that may occur as a
result of AI-related productivity advances in the workplace. Where we
part ways with the Chairman, however, is that we believe any such
wealth distribution should not be mandated by government intervention,
but rather traditional market forces should determine how any AI wealth
dividends should be distributed. As illustrated in the following chart,
productivity and employee compensation increases have generally closely
tracked one another for many decades. \3\
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\2\ The Association opposes HB 1332, which would phase-in changes
to the FLSA 40-hour overtime workweek standard to a 32-hour standard.
\3\ Deciphering the Fall and Rise in the Net Capital Share:
Accumulation or Scarcity?, Matthew Rognlie, Massachusetts Institute of
Technology (Spring 2015). www.brookings.edu/wp-content/uploads/2016/07/
2015a-rognlie.pdf. The Link Between Wages and Productivity Is Strong,
Michael Strain, Economic Strategy Group (Feb. 4, 2019). https://
www.economicstrategygroup.org/publication/the-link-between-wages-and-
productivity-is-strong. Does Productivity Growth Still Benefit Working
Americans?, Stephan Rose, Information Technology & Innovation
Foundation (June 13, 2007). https://itif.org/publications/2007/06/13/
does-productivity-growth-still-benefit-working-americans/. Workers'
Compensation: Growing Along with Productivity, James Sherk, The
Heritage Foundation (May 31, 2016). www.heritage.org/jobs-and-labor/
report/workers-compensation-growing-along-productivity.
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Accordingly, there is no need for government intervention in
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this area.
Finally, we commend the Committee for initiating a discussion about
potential amendments to the FLSA. Given the considerable change in the
workplace since the FLSA was enacted in 1938, there certainly is a need
for Congress to do a review of this statute. Such a review would be
particularly helpful for all stakeholders, given the fact that the
statute has been subject to conflicting interpretations by the Wage and
Hour Division of the U.S. Department of Labor and the courts. In fact,
this statute is one of the most frequently litigated statutes in the
Federal courts. For example, in 2023, there were 5,532 court filings
involving the FLSA, and according to a report by the Seyfarth Shaw law
firm, many of these lawsuits involved complex and ``novel and creative
claims and Supreme Court/appellate level battles . . . over long-
accepted standards.'' \4\ Reduction in such costly litigation and often
conflicting interpretations of the FLSA should be addressed by
Congress.
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\4\ 2023 FLSA Litigation Metrics and Trends, www.jdsupra.com/
legalnews/2023-flsa-litigation-metrics-trends-4777793/.
Before we begin our discussion this morning, I believe it is
important that we level set the parameters of our conversation. It is
my understanding that the Chairman's intent for holding this hearing
today is to discuss scenarios where employees do not perform work for
their employers for more than 4 days in a workweek, work no more than
32 hours in such workweek, and continue to receive the same amount of
pay they would have received in a traditional 40-hour workweek setting.
\5\ Senator Sanders has not to date provided specific details regarding
his thoughts with respect to the 32-hour workweek and the corresponding
requirement that employees suffer no decrease in wages. One could
assume, however, that he is only considering nonexempt employees in his
thinking--if he is also contemplating exempt employees in any proposal
in this area, substantial amendments would have to be made to the FLSA.
\6\ Finally, it is my understanding that the Chairman believes,
consistent with the above objectives, that the FLSA should be amended
to require employers to pay overtime to nonexempt employers after 32
hours of work in a workweek. As I understand it, the rationale for such
initiatives is to assist nonexempt employees to receive part of any
``AI wealth dividends'' that certain employers may receive from
utilizing AI-related workplace technology. My testimony is predicated
on the above understandings.
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\5\ The title of this hearing only states that employees would not
suffer a reduction in pay they are currently receiving by working a 40-
hour workweek and then moving to a 32-hour workweek. I am assuming,
however, that Senator Sanders would also take the position that
employees in a 32-hour workweek schedule situation would receive the
same level of benefits. This is an important point as the U.S.
Department of Labor, Bureau of Labor Statistics has concluded employee
benefits account for approximately 29.4 percent of an employee's total
weekly payroll costs to private sector employees.
\6\ U.S. workers deserve a break. It's time for a 32-hour working
week, Bernie Sanders, The Guardian. www.theguardian.com/commentisfree/
2023/may/04/us-workers-bernie-sanders-32-hours-working-week.
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The 40-Hour Workweek and the FLSA
A good beginning point for our discussion is a brief review of the
origin of the 40-hour workweek and the enactment of the FLSA. The
origin of the 40-hour workweek in the United States is generally
attributed to Henry Ford, who, in the 1920's, instituted a new work
schedule for the auto workers in his plants. Mr. Ford changed his
employees' work schedules to provide for 2 days off each workweek yet
maintained a schedule consisting of five 8-hour workdays--the 40-hour
workweek. Thereafter, President Franklin Roosevelt, as part of his
``New Deal'' reform initiatives, made proposals to require overtime to
be paid over a certain number of hours worked in a workweek. The
overtime provisions that President Roosevelt was seeking were intended
to reduce the number of hours worked by an employer's current workforce
and create jobs for the substantial number of unemployed workers in the
country at that time. \7\ President Roosevelt's initiatives ultimately
resulted in the enactment of the Fair Labor Standards Act in 1938. The
statute, initially in its overtime requirements, established a 44-hour
standard, with phase-in provisions ultimately moving the overtime
provision to a 40-hour standard in 1940. (See attachment 1).
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\7\ The Fair Labor Standards Act (FLSA): An Overview,
congressional Research Service (updated March 8, 2023).
www.crsreports.Congress.gov-r42713 and The Cons of a 4-Day Workweek,
Nirvi B., People Hum (Feb. 13, 2024). www.peoplehum.com/blog/cons-of-a-
4-day-workweek. See also Fair Labor Standards Act of 1938: Maximum
Struggle for a Minimum Wage, Jonathan Grossman, U.S. Department of
Labor. https://www.dol.gov/general/aboutdol/history/flsa1938.
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The potential AI Wealth Dividend
Various studies and pilot projects have provided convincing
evidence that the adoption of AI technology in the workplace can result
in positive outcomes for all stakeholders. \8\ For example, in a recent
study, Goldman Sachs concluded that AI could raise global GDP by 7
percent. \9\
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\8\ See Generative AI Can Boost Productivity Without Replacing
Workers, Katia Savchuk, Stanford Business (Dec. 11, 2023).
www.gsb.stanford.edu/insights/generative-ai-can-boost-productivity-
without-replacing-workers.
\9\ Machines of Mind: The Case for an AI-powered Productivity
Boom, Martin Neil Baily, Erik Brynjolfsson, and Anton Korinek,
Brookings Education (May 10, 2023). www.brookings.edu/articles/
machines-of-mind-the-case-for-an-ai-powered-productivity-boom/.
Understanding of the impact of AI in the workplace, however, is in
the embryotic stages of development, with widely varying analyses. Some
predictions have concluded that there is a substantial potential for
considerable job loss because of the implementation of such new
technology--other studies, however, present glowing predictions of
enhanced opportunities for employers and employees alike. Accordingly,
given the numerous labor relations policy issues presented by AI, we
agree with Chairman Sanders that this issue should be given significant
attention, and we commend the Committee for initiating this discussion.
As noted above, however, where we part ways with Senator Sanders is
this proposal to have intervention by governmental entities to
distribute any potential ``AI wealth dividend.'' Employers should be
given considerable flexibility and latitude on how to run their
businesses. Entrepreneurial innovation, including the implementation of
reduced workweek schedules, should be encouraged and incentivized but
not mandated by government intervention.
Workers Desire Flexibility
Workers today are asking that their employer provide as much
flexibility as possible for when, where, and how work is to be
performed. \10\ Many employees today want to work remotely or in hybrid
situations and set their own hours of employment. They seek flexibility
for more family time, increased opportunities to engage in social and
academic activities, and to achieve a better work-life balance. Given
these well-established findings that employees in the workplace today
are requesting more flexibility, what is the rationale to mandate any
rigid type of workweek? For this reasons and other concerns outlined
below--and perhaps other policy, economic, and legal reasons--the
Association submits that the Committee should consider the following
issues in its deliberations regarding the merits, or lack thereof, for
a 32-hour workweek and a corresponding requirement that employers not
reduce employees' wages and benefits in any potential change from a 40-
hour workweek.
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\10\ Survey: U.S. Employees Prioritize Workplace Flexibility as a
Key Component of Compensation, The Conference Board, PR Newswire (Nov.
13, 2023). www.prnewswire.com/news-releases/survey-us-employees-
prioritizeworkplace-flexibility-as-a-key-component-of-compensation-
301986497.html. ``According to a new survey from The Conference Board,
a majority [of employees] now consider workplace flexibility a basic
element of competitive compensation--one that can make or break a
company's ability to attract and retain talent.'' See also Mandating
the 4-day Workweek Is a `one-size-fits-none' Policy, Brent Orrell, U.S.
News and World Report (Oct. 19, 2021). https://www.aei.org/op-eds/
mandating-the-4-day-workweek-is-a-one-size-fits-none-policy/. ``Data
from a recent American Enterprise Institute survey shows that workers
value flexibility in employment above virtually any other
consideration: Workers want a better balance between their work and
family lives, and they are willing to sacrifice financially, as much as
$30,000 per year in salary, in order to get it.''
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Worker shortage concerns
``We have a lot of jobs, but not enough workers to fill them. If
every unemployed person in the country found a job, we would still have
nearly 3 million open jobs.'' \11\ Employers from construction, to
healthcare, to the service industry currently cannot find enough
employees. These shortages of employees are well-documented. \12\ For
example, one recent study concluded that an estimated 501,000
additional workers are needed in the construction industry on top of
the normal job pace of hiring in 2024. The same study concluded, in
2025, that the construction industry will need to bring in nearly
454,000 new workers, on top of new hiring, to meet industry demand.
\13\ Thousands of positions in hospitals, clinics, and long-term care
facilities also cannot be filled, including projections by the Bureau
of Labor Statistics that the country will face a shortage of 195,400
nurses by the year 2031 and that the number of job openings for home
and personal health aids will increase 37 percent by 2028. \14\
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\11\ Understanding America's Labor Shortage, Stephanie Ferguson,
U.S. Chamber of Commerce (Feb. 13, 2024). www.uschamber.com/workforce/
understanding-americas-labor-shortage.
\12\ Why America Has a Long-Term Labor Crisis, in Six Charts,
Laura Weber and Alana Pipe, The Wall Street Journal (Sept. 25, 2023).
www.wsj.com/economy/jobs/labor-supply economy-jobs-charts-3285a5b7.
Report: As U.S. Economy Grapples with Nearly 11 Million Unfilled Jobs,
Immigration Reform is Critical, Committee for Economic Development of
The Conference Board (CED), PR Newswire (Mar. 21, 2023).
www.prnewswire.com/newsreleases/report-as-us-economy-grapples-with-
nearly-11-million-unfilled-jobs-immigration-reform-is-critical-
301777423.html. Immigration Reform: A Path Forward, Stephen Yale-Loehr,
Randel Keith Johnson, Theresa Cardinal Brown, and Charles Kamasaki,
Cornell University Law School (Oct. 5, 2023).
www.lawschool.cornell.edu/wp-content/uploads/2023/10/Cornell-
immigration-white-paper-10-5-23.pdf.
\13\ ABC: 2024 Construction Workforce Shortage Top Half a Million,
(January 31, 2024).www.abc.org/NewsMedia/News-Releases/abc-2024-
construction-workforce-shortage-tops-half-a-million.
\14\ U.S. is Suffering a Healthcare Worker Shortage. Experts Fear
it Will Only Get Worse. Alexandra O'Connell-Domenech, The Hill (Sept.
28, 2023). www.thehill.com/changing-america/well-being/prevention-
cures/4225960the-us-is-suffering-a-healthcare-worker-shortage-experts-
fear-it-will-only get-worse/.
The adoption of a 32-hour workweek would increase, in many
instances, the number of positions an employer would need to fill to
meet client and customer demands, with no corresponding strategy for
how these shortages should be addressed. Consider, for example, a
refinery that operates on a 24/7 basis and uses four crews. Such an
employer hypothetically has four people for every position, and the
employees take turns filling a job during a 40-hour workweek. If each
crew were forced to change to a 32-hour workweek, the employer would
have to hire an additional crew. This would be a 25 percent increase in
staffing with corresponding payroll increments. The only other solution
this employer would have would be to significantly increase overtime
for the existing crews, assuming the workers in question were willing
to work the additional hours and such overtime did not present safety
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issues.
Congress should not set private employers' wage
structures
The second part of Senator Sanders' change in the law (after the
32-hour overtime amendment to the FLSA) would require employers not to
reduce the wages (and presumably benefits) for employees who are moved
from a 40-hour workweek to a 32-hour workweek. The impact of this
approach is to force employers to change their wage structure--they
would be required to provide a certain level of pay for employees, who
then would be working reduced hours. This approach would require
congressional action. Even assuming Congress had the constitutional
authority under the Commerce Clause or pursuant to some other
constitutional theory to proceed in this manner, this is bad public
policy. Governmental entities should not intervene in the employers'
basic entrepreneurial rights to run their businesses, including the
establishment of wage structures.
FLSA overtime provisions were not enacted to be
wealth distribution mechanisms
As stated above, the overtime provisions of the FLSA were enacted
in 1938 to incentivize employers to create more jobs and to discourage
employers from providing more hours of work to their existing
workforce. Yet, the Chairman's proposal would attempt to utilize the
Fair Labor Standards Act to distribute potential ``AI wealth
dividends'' from employers to employees by government intervention.
While we agree that employees should benefit from any AI wealth
dividend, we do not agree that government intervention is the proper
way to achieve this objective. Traditional market-related forces, with
an underlying minimum wage safety net, should determine the rate of pay
for private sector employees. When employers fail to reward their
employees with increased wages for increased productivity gains, such
employers will not be able to recruit or retain employees--they will
lose their employees to competitors. Traditional market forces should
determine how any AI wealth dividend is to be distributed. Indeed,
various studies substantiate that historically productivity gains and
increases in employee compensation are closely linked. \15\
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\15\ Id.
Implementation of a 32-hour workweek with
corresponding requirement that no employees suffer any loss of
wages is a ``backdoor'' or ``workaround'' to the establishment
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of a new Federal minimum wage
Consider this example. Hypothetical employer X presently pays its
nonexempt employees $20.00 an hour, and its employees work a
traditional 40-hour workweek, receiving a total gross weekly pay of
$800.00. Per the Chairman's approach, if employer X moves from the
traditional 40-hour workweek to a 32-hour workweek, it would be
required to provide its employees the same total weekly compensation of
$800.00. Accordingly, such employees would then be making $25.00 an
hour, a $5.00 an hour increase or a 25 percent increase over their
previous hourly rate. Granted, this is not a direct establishment of a
new Federal minimum wage, but it certainly is a workaround method of
establishing minimum wages for employees in a potential transition from
a 40-hour workweek to a 32-hour workweek. Minimum wage adjustments
should be considered separately from Senator Sanders' proposal.
Payroll cost impact on employers
As illustrated above, the imposition of a 32-hour workweek can
result in incremental payroll costs--when incremental benefit costs are
added, the figure is even higher. The amount of work an employer needs
to have completed in a workweek does not change in most instances if an
employer converts to a 32-hour workweek, but under Senator Sanders'
proposal, an employer will need to hire more employees or pay
significant overtime for existing employees to meet its work
requirements. Indeed, the Association notes that a rule presently
pending at the Department of Labor would increase the compensation
threshold of when employees are to be paid overtime. \16\ When you
combine an employer's potential need to pay more overtime with the
impact of such a proposed overtime rule requirement with the
requirement by Senator Sanders that employees receive the same amount
of pay and benefits for a reduced number of hours in a workweek, a
potentially unsustainable increase in payroll expenses will be placed
on many employers.
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\16\ New Proposed Overtime Regulation Is Wrong Rulemaking at Wrong
Time, Marc Freedman, U.S. Chamber of Commerce (Sept. 14, 2023).
www.uschamber.com/employment-law/new-proposed-overtime-regulation-is-
wrong-rulemaking-at-wrong-time. ``The new proposed regulation first
published on September 7, 2023, will raise the salary threshold, below
which an employee is non-exempt (or eligible to earn overtime) by more
than 50 percent from the current $35,568/year ($684/week) to $55,068/
year ($1,059/week). The proposed rule also includes an automatic
escalator clause to reset it every 3 years.''
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Inflationary impact
Even if an employer could successfully navigate a way to reschedule
its workforce and pay the added costs associated with a 32-hour
workweek, such added costs would, in virtually every instance, have to
be passed on to consumers. Inflation is already a major problem in this
country and has taken a substantial toll, particularly on working class
families. \17\ For this reason alone, the imposition of a 32-hour
workweek is not a sound policy option.
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\17\ Pursuant to a report issued by the U.S. Bureau of Labor
Statistic, inflation rose again for the 12 months ending in February to
3.2 percent. The same report indicates that core inflation--which
excludes volatile food and energy prices--rose 3.8 percent for the 12
months ending in February. https://www.bls.gov/news.release/
cpi.nr0.htm.
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Operational coverage
The imposition of a 32-hour workweek will force many employers to
make difficult operational decisions. If an employer wishes to minimize
overtime expenditures and not incur the cost of hiring additional
workers, it may have to limit the number of hours of its operations.
This may be obtainable in certain manufacturing settings (provided the
same production output can be accomplished in a 32-hour vs. a 40-hour
schedule) but will not be obtainable by other employers. For employers
that must operate on a 24/7 basis (e.g., hospitals), they cannot close
and the imposition of a 32-hour workweek is not practical. In such
settings, significant increases in payroll costs will occur. Other
employers, especially those in retail and hospitality, could reduce
their hours of operation, but in doing so, they could face substantial
negative customer/client reactions. For example, what if a hotel
decided to only be open for 4 days in a week? Exercising such option
not only may be financially unsound, but also not operationally viable.
The employer could hire more workers and/or pay its existing workers
more overtime, but again, proceeding with either option would
undoubtedly result in significant increases in the cost of doing
business.
Scheduling disruption and interference with non-union
and unionized employer operations
Many employers in this country have long-established scheduling
systems that are well-accepted in the workplace. This is particularly
true for employers such as hospitals and other employers that must
operate on a 24/7 basis. Imposing a 32-hour workweek would adversely
impact such operations and present significant scheduling issues. In
unionized settings, employers and unions would be forced to renegotiate
collective bargaining agreements, many of which have embraced the 40-
hour workweek for decades.
Employee loss of work
Mandating a 32-hour workweek, with a requirement that employees
maintain their current compensation, may cause employers to eliminate
certain positions. Alternatively, employers may split numerous full-
time positions into part-time positions to minimize overtime costs,
thereby overall decreasing employee wages. Such an approach may
directly conflict with concerns often voiced by employees in the
workplace today that they cannot get enough hours of work from their
employer and are, therefore, forced to work for more than one employer
to meet basic costs of living expenses. Simply put, a 32-hour workweek
may, in many situations, result in either job elimination or an
increase in part-time work, thereby adversely impacting the overall
compensation of employees.
Will there be a potential adverse impact on Social
Security, Medicare, and state payroll tax-funded programs?
What impact would a 32-hour workweek have on mandatory tax payments
by employees and employers to the Social Security and Medicare trust
funds? As noted above, some employers may be forced to eliminate
positions or reduce payroll expenses by creating new part-time
positions if a 32-hour workweek is mandated. Such deductions in overall
payroll tax contributions certainly must be considered. Granted, some
employers, however, may be forced to hire more workers or pay more
overtime hours, thereby balancing out any eliminated positions or
increased part-time positions, but AI may also result in a net
reduction in total employee and employer payroll tax payments. Even
minimal reductions in payroll tax contributions by employers to the
Social Security and Medicare trust fund (and state unemployment-funded
systems) could have significant adverse effects on such funds that are
already on the brink of financial insolvency.
Increase in employer benefit costs or reduction in
benefit coverage
Employee benefit costs for private sector employees is 29.4 percent
of an employer's total payroll cost. \18\ Pursuant to Senator Sanders'
proposal, requiring employers to maintain the same level of pay and
benefits for a reduced number of hours worked will, accordingly,
increase the hourly benefit cost for each employee. Further, as noted
above, certain employers may either eliminate positions or reduce the
number of hours that employees work in a given workweek to accommodate
the 32-hour a week schedule. Moving employees to part-time positions
may result in such employees receiving a lesser amount of healthcare
insurance benefit coverage or no benefit coverage altogether. If this
occurs, there will be an adverse impact on our Nation's healthcare
delivery system. This issue should be considered when analyzing the
potential impact of a 32-hour workweek.
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\18\ U.S. Bureau of Labor Statistics, Employer Costs for Employee
Compensation Summary, (Dec. 15, 2023).
Increased employee stress, related workplace safety
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issues, and product/service quality
While the proponents of a reduced workweek extoll the virtues of a
3-day weekend and increased time off, the reality in most workplaces is
that the same amount of work would still need to be done over a shorter
number of hours. This pressure to produce the same amount of product or
provide the same level of services can, as noted by many studies, \19\
lead to more stress on workers that negates partially or completely the
benefit of more time off. Employee workplace safety concerns may also
increase if safeguards are not put in place for the increased
productivity required in a reduced workweek. Finally, requiring the
same level of production or services could also result in employees
``rushing'' to finish a job or project or otherwise not maintaining the
same quality of work as previously provided in a 40-hour workweek.
\19\ Employers Beware--A 4-Day Workweek Creates A Multitude Of
Problems (Here's a long list of them), Dr. John Sullivan (April 11,
2022). https://drjohnsullivan.com/articles/employers-beware-4-day-
workweek-creates-problems/.
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``One size does not fit all''
As noted by many commentators, a 32-hour workweek does not work for
many types of employers. This is especially true for employers who must
provide services to the public on a 24/7 basis or run a production
operation, such as a refinery, without interruption. The only way
employers could adjust to a 32-hour workweek would be to pay
significant overtime to existing employees or hire additional workers
(if they can even be found) to cover the lost shift hours of their
current workforce. Accordingly, in addition to the overwhelming desire
by employees for more flexibility in the workplace, accommodations
would need to be made for certain industries and employers if a 32-hour
workweek were mandated.
Changes to paid time off and other benefits tied to
hours worked
If an employer calculates paid time off benefits based on hours
worked, moving to a 32-hour work week would result in fewer paid time
off hours being earned. Other benefits tied to hours worked would also
be reduced. It is not clear how Senator Sanders' approach would
accommodate such benefit plans. These are but a number of benefit
issues that would have to be addressed if the Chairman's approach were
to be enacted. \20\
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\20\ Shortening the Workweek: Pros and Cons, Indeed for Employers.
www.indeed.com/hire/c/info/shorter-work-week.
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Is increased productivity possible?
A shortened workweek may not permit a worker to increase their
productivity. For example, on an assembly line, no matter how well the
worker performs, the line speed could remain unchanged. This would mean
working 20 percent fewer days/hours would translate to 20 percent less
productivity per person. \21\
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\21\ The 32-Hour, 4-day Workweek: A Win-Win or a Risky Move?,
James Dillingham (Dec. 19, 2023). www.industryweek.com/talent/
compensation-strategies/article/21279606/the-32-hour-4-day-workweek-a-
win-winor-a-risky-move.
Also, consider in warehouse situations that there may be a physical
limit on how many items employees can pick per hour or how many
delivery locations a driver can serve in a given day. These are a few
examples of where workers have little or no ability, as a practical
matter, to increase their productivity. \22\
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\22\ The Impact of Working a 4-Day Week, Amy Fontinelle,
Investopedia (Nov. 13, 2022). www.investopedia.com/the-impact-of-
working-a-4-day-week-5203640.
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Short-term success--Long-term failure
Many articles and studies have concluded that the employee
appreciation and support for a shortened workweek exists only for a
short period of time. Such studies have concluded that the initial
positive reaction by employees can fade very quickly, with
corresponding morale, operational, and financial problems facing
employers that move to a shortened work week. \23\
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\23\ The Cons of a 4-Day Workweek, Nirvi B., People Hum, Feb. 13,
2024. www.peoplehum.com/blog/cons-of-a-4-day-workweek.
Mr. Chairman, Ranking Member Cassidy, and Members of the Committee,
this concludes my testimony. I am happy to respond to any questions or
comments you may have.
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__
[summary statement of roger king]
I am appearing on behalf of the HR Policy Association where I serve
as the Senior Labor and Employment Counsel. HR Policy is a public
policy advocacy organization that represents the chief human resource
officers of nearly 400 of the largest corporations doing business in
the United States and globally. Collectively, their companies employ
more than 10 million employees in the United States--nearly 9 percent
of the private sector workforce.
I want to note that the Association is not opposed to 32-hour
workweeks or other non-traditional workweek configurations that make
operational and financial sense for employers. We are, however, opposed
to amending the Fair Labor Standards Act (FLSA) to change the overtime
requirements for nonexempt employees from 40 hours to 32 hours. \1\
Accordingly, there is no need for government intervention in this area.
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\1\ The Association opposes HB 1332, which would phase-in changes
to the FLSA 40-hour overtime workweek standard to a 32-hour standard.
It is my understanding that the Chairman's intent for holding this
hearing today is to discuss scenarios where employees do not perform
work for their employers for more than 4 days in a workweek, work no
more than 32 hours in such workweek, and continue to receive the same
amount of pay they would have received in a traditional 40-hour
workweek setting. \2\ In my testimony I will cover the 40-hour workweek
and FLSA origins, the potential for AI wealth dividends, and workers'
desire for flexibility. Additionally, I will cover the unintended
negative consequences of a federally mandated move to a 32-hour
workweek, including increased part-time offers, reduced contributions
to Social Security and Medicare, and reductions in benefit coverage.
---------------------------------------------------------------------------
\2\ The title of this hearing states only that employees would not
suffer a reduction in pay they are currently receiving by working a 40-
hour workweek and then moving to a 32-hour workweek. I am assuming,
however, that Senator Sanders would also take the position that
employees working a 32-hour workweek schedule would receive the same
level of benefits. This is an important point as the U.S. Department of
Labor, Bureau of Labor Statistics has concluded employee benefits
account for approximately 29.4 percent of an employee's total weekly
payroll costs to private sector employees.
Many articles and studies have concluded that the employee
appreciation and support for a shortened workweek exists only for a
short period of time. Such studies have concluded that the initial
positive reaction by employees can fade very quickly, with
corresponding morale, operational, and financial problems facing
employers that move to a shortened work week. \3\
---------------------------------------------------------------------------
\3\ The Cons of a 4-Day Workweek, Nirvi B., People Hum, Feb. 13,
2024. www.peoplehum.com/blog/cons-of-a-4-day-workweek.
---------------------------------------------------------------------------
______
The Chair. Thank you very much to all of the panelists. Let
me just briefly respond to Mr. King's statement about letting
the market decide who benefits from a transition to more
advanced technology.
For the last 50 years, the market has done just that, and
the result has been that there has been a $50 trillion transfer
of wealth from the bottom 90 percent to the top 1 percent. So,
after those 50 years, there are millions of workers today who
are worse off, while we have more income and wealth inequality
than we have ever had in the history of the country.
I am not quite in favor of letting the market decide. All
right, let me begin the questioning. We are going to be a
little bit, not to offend Senator Cassidy, a little bit liberal
here, in terms of the time because we only have a few Members
here and it is an important subject.
I wanted to start off with President Fain. And I don't want
to talk about statistics. We have heard a lot of statistics.
You have been with the union for over three decades. No doubt
as president, you have met thousands of workers, you have met
thousands of retirees. Tell the American people what it is like
to work on a factory floor. In some cases--I mean, by the way,
I learned this recently.
There are people today in America who are working 7 days a
week, 12 hours a day. Unbelievable. But President Fain, talk
about the impact on the life of a worker mentally, physically,
who was doing work, hard work, day after day, year after year.
What is--what happens to that person?
Mr. Fain. Thank you. So, I find irony in some of the
statements I just listened to, but I--so, the typical life of a
factory worker, I mean, and this is union or not--and it is
actually worse for nonunion workers because they have less
rules that govern their workplace.
But when you are--typically many factory workers, many
typical schedules in manufacturing are 12 hour schedules, and
they are 7 days a week. These--a lot of these places run around
the clock.
When you are standing on concrete floors 12 hours a day, 7
days a week, year after year after year, there is a lot of wear
and tear on a person's body. As I say, people in the age, they
end up--in their older working years, end up getting knee
replacements, hip replacements, shoulder surgeries.
I just find an irony in some of this mentally. The stress
of working 7 days a week, 12 hours a day, when you don't get to
see your kids, you don't get to go home and have dinner with
your kids, you don't get to make sure they are getting their
homework done, you don't get to spend quality time with family.
Or just even if you don't have a family, if you have
quality time for yourself. You know, something is sacrificed
when you are working 12 hours a day, either sleep or time with
family. Something is going on--something else is sacrificed. We
only have so much time in a day.
But, I find that irony in some of the comments that were
made by Mr. King. As far as a shortage of workers, I don't
believe we have a shortage of workers in this country. I think
COVID made people wake up and realize what is important in
life, and it is not working for 12 hours--$12 an hour and 12
hours a day, and multiple jobs struggling to get by.
This shortage of workers that we see, I don't believe it is
a shortage. I believe it is a fact that people have woken up
and they have decided I am not going to leave my home for $12
an hour when I can't even afford to pay the bills.
Also, going back to that, letting the markets determine
this and it is just an HR standard talking point about passing
added cost onto the consumer. Well, I witnessed inflation in
the last 4 years.
That wasn't caused by workers. It wasn't caused by--it was
caused by two words, corporate greed. It is consumer price
gouging. And so, that to me--we got to get focused on the
reality here.
The Chair. Thank you. Dr. Schor, we are the wealthiest
country in the history of the world and yet we have people who
are stressed out. We have a crisis in mental health. A lot of
factors for that.
Yet we are working longer hours, as I understand it, than
people of any other wealthy nation. How does that happen?
Dr. Schor. Well, I think a lot of the reason for the long
hours in this country have to do with the kinds of things that
we have been talking here today and the fact that the American
worker has not had enough power in the market to reduce hours.
But there are other aspects as well.
One of the things we know from economic studies is that
when inequality increases, so do working hours. And so, the
rise in inequality in the United States, which you referred to
earlier, is one of the primary causes of longer working hours
in the United States.
The Chair. Okay. Mr. Leland, from your perspective, this
discussion is not just theoretical. You have implemented it.
Talk a little bit about the impact that has had, the transition
to a 4-day work week in your company. The impact that it has
had on the workers there.
Mr. Leland. Yes. I mean, it has been transformative for our
workers. I mean, I have been told that this is one of the most
impactful things that they have experienced in their lives,
because a lot of these workers are able to spend time with
their kids.
They are learning new skills. I have someone who works for
me, learned how to use AI on those days off, and has brought it
back into the workplace, and is much more efficient. And as a
result, they are learning new skills that are not related to
work but are just participating in their communities,
volunteering.
The Chair. We talked about increased productivity. Are
workers more focused when they come back after 3 days?
Mr. Leland. Yes. So, workers are much more focused. They
are better rested. They are dedicated to the task at hand in a
different way, and teams sit together longer. The cohesiveness
of the organization is much more robust on a 4-day work week
because you aren't burning people out, you aren't churning
through them. You aren't having to deal with turnover costs.
The Chair. Well, talk about turnover. I mean, one of the
great cost to businesses is a lot of turnover and having to
train new workers. What do you think the impact of a 32-hour
work week would be on that?
Mr. Leland. It was shocking, honestly, how much it changed
turnover and what impact that had on our productivity. I mean,
honestly, we have we have rarely lost an employee in the last 2
years.
That means people have longer tenure. We don't have to deal
with hiring, the cost of hiring, the time of hiring someone
else. Our goal is don't get disrupted by the sudden departure
of a key employee. I think a 32 hour workweek--people want to
work.
The notion that, I don't know, Americans are lazy, that
some people have is, I think, inaccurate. People want to work,
but they want to work in a way that is balanced with the rest
of their lives, and they will stay in those jobs longer if the
job is balanced with the rest of their lives.
The Chair. Thanks very much.
Senator Cassidy.
Senator Cassidy. I yield to Senator Braun.
Senator Braun. Thank you. So, before I got here, 37 years
spent running an enterprise that would encompass that scrappy
navigation of how hard it is when you are signing the front
side of a paycheck to get a little business, to ever get beyond
that. As we grew into a regional and national company, things
change as you evolve. And we have had discussions before.
I am a proponent of high wages and good benefits. Been out
there to where you ought to be able to negotiate and bargain,
but there is such a big difference in terms of that dynamic and
then wrapping it with mandates that would never enable most of
what comprises our economy, which would be small businesses,
Main Street ones, to be in a position to where they would have
to live with some type of homogenous approach to maybe even
what we are talking about.
I think even for most business owners, if they can, they
are going to weave that into what they are able to offer their
employees. And Mr. Fain, we have had the conversation, big
corporations that are in places where they have cornered the
market, I think there is a legitimate discussion of how you
spread that wealth within, between employees in public
companies and a lot of times a professional management that
would seem to, rake in levels of pay that I never thought were
possible.
I want to get back to though how I do disagree with trying
to do anything from this place that would impose upon the
preponderance of businesses out there to where I just don't
think they could survive. I think that it is a legitimate issue
to talk about voluntarily.
If you are good at what you do and you are going to keep
employees, you are going to want to weave it in. I think it is
a legitimate issue to bargain for at that highest level of
super large corporations and large workforces. I think that is
about as far as you can go.
Most businesses would not be like yours, Mr. Leland. There
is more--you wouldn't be in business if you weren't open 6 days
a week for almost any retail business I am aware of, including
my wife's business in our downtown that has been there for now
nearly 45 years. It just would not work.
Keep that in mind. I want to start with this particular
question for Dr. Vittert and Mr. King, and I want to focus on
how this would work on Main Street and with small businesses. I
am not worried about big corporations.
They generally are going to land on their feet anyway, and
I believe they ought to be negotiated with for all the things
you might do to improve the position of a worker there. But
what about Main Street and small business. We will start with
you--Dr. Vittert, you start, then Mr. King.
Dr. Vittert. [Technical problems]--exactly what you are
saying--pardon me, sorry. I should learn that mute in Zoom, I
should have gotten there at this point.
I think it is really important to note that so many of
these studies that have been done and these pilots that have
shown incredible things, what is done at Kickstarter is
amazing, is that it is self-selection.
These companies are choosing to be a part of this. And so,
they are able to cut out extraneous meetings. They are able to
shorten coffee breaks. They are able to go to remote meetings
for some things you don't have to commit--whatever it is.
Senator Braun. I have never heard of anything that you have
just mentioned in a small business.
Dr. Vittert. Exactly.
Senator Braun. That just is not there. We try to do it. And
so, we don't run out of time, because I do have a final
question for Mr. Leland, Mr. King, would you weigh in on that
too?
Mr. King. Senator, it is good to see you again. This
doesn't work for small business. It doesn't work for any type
of business if you can't measure productivity correctly and
then have that productivity gap satisfied.
The proposal the Chairman is putting in legislation today
would require overtime over eight. It would require overtime
over 32. It would require overtime, double time, in fact, over
12. So, a small business needs to have flexibility. Employees
have family obligations.
They have other obligations in their community. The
employer needs them sometimes more than eight, sometimes less.
You know that from your business. The bill we are talking about
here today interferes with that flexibility. It just is not
sound policy.
Senator Braun. Thank you. Mr. Leland, would you agree that
your business has certain characteristics that probably made it
peculiar to you being able to do that? Or do you honestly
believe that would be transferable into the multitude of
businesses, especially out on Main Street?
Mr. Leland. Yes, no, I mean, our business definitely has
characteristics that are not unique but lend themselves toward
an easier transition to a 4-day workweek. However, the pilots
that Dr. Schor has worked on show that this is possible across
multiple industries.
It looks different, that transformation looks different,
but we have seen manufacturing, construction, healthcare,
police departments all do this successfully.
Senator Braun. Thank you.
The Chair. Thank you.
Senator Murphy.
Senator Murphy. Thank you very much, Mr. Chairman. Thanks
for convening this hearing. I think this is a really important
conversation to have regardless of where you stand on this
issue.
I think, the fundamental question here that we are asking
is where has all this wealth gone that has been gathered in
this economy from these massive increases in productivity if it
hasn't been going to workers, if the UAW and other unions have
to fight tooth and nail just to be able to get living wage
increases. I will tell you something we haven't talked about
yet.
A lot of that money is going to trust funds. A lot of that
money is going into inherited wealth. And at some point, we
should have a conversation about that a little bit more openly
as a Committee and as a Congress.
Here is a stunning piece of data. For the first time last
year, the majority of wealth for new billionaires, these were
people who became billionaires in 2023, came not from their
work, but through inheritance.
It's the first time ever that has happened. A thousand
billionaires are expected to pass down $5.2 trillion worth of
wealth to their heirs in the next 20 years, and so you hope
that if the money isn't going to the workers, it is at least
being recycled back into the economy. It is just not true.
A lot of that money is being hoarded and then passed down
to kids who in previous ages would not have been able to enjoy
that level of benefit from their parents' success. Mr. Fain, I
wanted to talk to you just a little bit about leisure time. You
have talked about this already.
You are--I think you really importantly talk about the
importance that your faith plays in the work that you do and in
your life. But there is a pretty wild thing happening in
America today. In 2000, 70 percent of Americans belonged to a
religious institution, but today, that number is 50 percent.
This has been a pretty precipitous decline in the ability
or willingness of Americans to go to church or to a religious
institution on a regular basis. And I think that has lots of
broad impacts in our society. But there are a lot of reasons
for that. But one of them is that Americans just have less free
time.
When you have to work 70 hours to get the same standard of
living for your family that 40 hours would have gotten you a
few decades ago you don't have time to go to Wednesday night
Bible study. You might not have the ability to even attend
church services on a Sunday.
You can talk about church if you want or if you don't want,
but it is just true that some of the leisure time activities,
some of the institutions that Americans found value and meaning
in, are less accessible when you have to work these long hours.
I would love to hear your thoughts on that.
Mr. Fain. Yes. I mean, one of the biggest--it is one of the
things we talked about with the 32 hour workweek, when we put
that in our contract talks, was the fact that we wanted to
create work life balance.
Because it is just, in this country we are the most
productive. I mean, sadly, I say not proudly, sadly we are the
most productive nation in the world, which means our people are
working more and more hours with less and less people, and
something has got to give. And so, this is--it is work life
balance.
As I say, when you are working multiple jobs to live
paycheck to paycheck or you are working 7 days a week, 12 hours
a day, something else is sacrificed in that. And that is--it is
what ends up happening.
You have to sacrifice, your ability to go to church. If it
is something else to do on a Sunday, maybe you get a Sunday off
and you haven't slept all week, and you spend the whole day
sleeping. I mean, that is a reality a lot of workers face on
some of the schedules they work.
The thing to me that I think, I hear all this--we have
heard my whole life about good for business is good for people,
trickle-down economics and all those type things. But to me, we
have to focus--I do believe Congress has an obligation here in
spending priorities and regulations.
That may be an ugly word to some people that represent
business. But, the point of this is this should be done to
create more jobs, more jobs at a better rate of pay, so that
people have more free time to live.
If Government is going to invest in business the trillions
of dollars we invest in business, that our taxpayer dollars
invest in business, that should--those benefits should be going
to working class people, not just strictly business.
That is the problem. All this money goes to business, but
it never seems to funnel its way down to benefit working class
people.
Senator Murphy. Well, listen, I agree with you. I think we
should have an interest in leisure time, right. We should have
an interest in making sure that people are able to find value
outside of work.
A lot of people find value in work, and I am glad that they
do. But a lot of people find more value by the institutions and
the social clubs and the churches that they affiliate and spend
time with outside of work, but that is just less accessible for
people today, and that should be a public policy interest of
the U.S. Congress.
I appreciate this hearing allowing us to talk about that.
Thank you, Mr. Chairman.
The Chair. Thank you.
Senator Cassidy.
Senator Cassidy. Yes, thank you all. We have a little extra
time. I got a lot of questions, so I will ask you all to be
tight with your responses.
First, Mr. Fain, I totally agree with you. My practice as a
physician was in a hospital for the uninsured. Folks want jobs,
and they want decent pay. I agree with that entirely. There is
a little bit of kind of, though, confusion in what we are
saying. I just want to put out some of that confusion.
When you say people are working longer to make more money,
well, if you just cut them down to 32 hours a week, they are
still making the same money. So, for them to grow their income,
they would have to either work overtime and, or take a second
job. And yes, there are companies that work 24/7, but the
people don't work 24/7.
They work 40 hours a week, or apparently on average 41.3
hours per week. So, I think we have to be kind of clear on
that. And last, of course, productivity is not more hours to
make the same money. Productivity is more work per hour.
It is oftentimes aided by machines, in which case there is
less wear and tear on the body. Not to say that there is not
wear and tear on the body when we think of construction
workers, but still, that is the whole point.
Dr. Schor, when you mentioned that decreasing hours work
per week increases productivity, it makes total sense to me.
When I go to Spain and go to McDonald's, they don't have
somebody at the front desk to take my order for a hamburger.
They have got a machine that I push a button on, and it
dispenses it. And our Department of Labor has said that if we
raise minimum wage, there will be a net loss of jobs because
people will automate in order to decrease their labor cost.
How would--if you are speaking of a service industry, why
would raising their labor costs by having fewer hours work per
week for the same salary be any different than raising the
minimum wage in terms of an incentive for net loss of jobs by
replacing workers with automation?
Dr. Schor. Yes. Thank you for that question. Let me just
respond----
Senator Cassidy. Real quick.
Dr. Schor. Yes. Two points. One is, we are seeing no
increase in overtime and second job holding in our studies, by
the way. But the impacts that we are seeing here are not labor
displacing because people are able to make up that productivity
in the 4-days that they had in the 5-days, yes.
Senator Cassidy. That surprises me because I--just
intuitively I am a doctor. So, intuitively when I read about
the Temple nurses working shorter hours.
I will just say that according to the Pennsylvania Hospital
Association, 30 percent of RN positions are unfilled, and
apparently Temple University Hospital spent $55 million for
nurse overtime during--because of a nursing shortage.
I am not sure how to square that because they worked less
hours, but they had to pay more for overtime and, or for
others.
Dr. Schor. These are for their nurse managers. Because the
other nurses are on these like 3 day schedules and so forth.
So, and this was put into place 2 years after the pandemic
started.
Senator Cassidy. The nurse managers are working less, not
the RNs themselves.
Dr. Schor. Correct.
Senator Cassidy. Okay.
Dr. Schor. They haven't--because they are not on 5 day
schedules, so they haven't, yes----
Senator Cassidy. I am almost out of time. I am going to
move. Mr. Leland, right now we are trying to get a health bill.
The best I can tell my staff is working 80 hours a week,
because anytime they call me on a Saturday or Sunday or Monday
on a holiday, they are fully prepared and obviously there. When
you all got a big crunch time, deadline has to hit, boom, you
got to move, like people still only work 32 hours?
Mr. Leland. No. It is a norm, right. This is not pencils
down at 32 hours. It is the question of, well, what is your
standard workweek that you are flexing around.
Senator Cassidy. Yes. That is all I was going to check. Dr.
Vittert, I look at France's unemployment rate among the youth.
It is like 17 percent. It is pretty amazing. And then for the
next group, it is like 7 or 8 percent, much higher than ours.
And you had mentioned--and they have got other labor laws as
well.
But you had mentioned that this kind of, sugar high, more
satisfaction but then it fades and then it goes away. But also,
that there is a loss of work as workers either go to temporary
workers or offshore. Could you elaborate on that, please?
Dr. Vittert. I think it is the same kind of idea as right
when COVID hit, we are all baking bread or doing whatever we
are doing. And then as COVID went on longer and you were at
home more, you are sitting in your bed longer.
It shows in the long term studies that things just go back
to normal. We just see that happen all over again with people.
And I think we see it clearly in terms of unemployment rates in
the same way.
Senator Cassidy. If you will, the other things that occur,
the disruption in the economy, etcetera, really do more to
dictate your happiness than whether or not you work a little
less. Indeed, there may be a loss of a job because of this
impact upon you.
Dr. Vittert. That is exactly what happened in France, is
people lost their jobs.
Senator Cassidy. Got you. And, Mr. King, just to make the
point, there is nothing to prevent a business like Mr. Leland
or Temple University Hospital for a select group of employees
to have a policy which would be 32 hours a week. So, there is
no reason for a mandate per se. Companies can do that. Just to
make that point.
Mr. King. Yes, absolutely, Senator. And that is the point,
let's give flexibility to workers and to employers. Don't have
Government come in and intervene. It is going directly in the
opposite position of where we should be going.
Now, as far as the number of workers available in this
country, I agree with Mr. Fain, we need to get more people back
into the workforce for sure.
But study after study shows, even if we did that, and I am
looking at a recent U.S. Chamber of Commerce study, we would
still have 3 million jobs open in this country. This proposal
is going in the wrong direction. Flexibility is what we need.
Senator Cassidy. Dr. Vittert, I am going to--Dr. Schor,
first I want to ask you this. Think about it, to Dr. Vittert.
You had mentioned--I didn't quite get the association versus
causation. You say that when there is more inequality that
there are--that people work longer hours. I didn't quite
understand that relationship. Is that an association or a
causation?
Dr. Schor. It is--these are done with macroeconomic
studies. So, we believe they are causation, but they are not
controlled experiments. And that is----
Senator Cassidy. Dr. Vittert, any comment?
Dr. Vittert. If you don't have a controlled experiment you
cannot find causation. It is just statistical--statistics.
Senator Cassidy. Yes. I once gave a vaccine to a person who
became pregnant. And it made me realize that, just because it
happens at the same time, it is not a causation. It is an
association.
Dr. Schor. Yes. But these are highly sophisticated studies.
And I really would disagree with the idea that we can only know
something if we have an experiment----
Senator Cassidy. Yes, but I don't understand intuitively
why it would happen. But I am out of time, yes----
Dr. Schor. Oh, because people need to work more hours to
keep up because there is a comparative dimension to the way
people's sense of what is----
Senator Cassidy. Actually, the thing of milk costs more
because somebody else is making more, but that is another
story. Yes.
The Chair. Senator Hickenlooper.
Senator Hickenlooper. Thank you, Mr. Chair. And I have been
looking forward all day to this just because it is such a great
group of panel. I appreciate your--all your time and
contribution.
To Mr. Fain, great to see you again. Appreciate all the
work that you did to bring up a 4-day week in the negotiations,
but I am going to hold off on yours just because I have to
start with Dr. Schor who was an undergraduate student while I
was a graduate student, and somehow she hasn't aged, whereas I
have. And I think there is an injustice there that needed to be
pointed out but appreciate all your work and research over all
these years on the lives people lead in various types of jobs.
You talked a little bit about the different ways that
people have a shorter workweek, just taking part off every day
or a whole day, time each month off. What are some of the pros,
and again, concisely, because I got several questions, but pros
and cons on this.
Dr. Schor. Yes, the majority in our studies--and thank you,
by the way. Really wonderful to see you. Are doing full days
off. So over 90 percent of our studies are doing full days off.
And that seems to be a much more popular way to do this than
shorter, daily hours. Although there is a little bit of
variation.
One thing we looked at in our studies was whether or not
having three consecutive days had a bigger impact on well-
being, and we were surprised that it doesn't. In some of them,
people are taking those Wednesdays off to get a break in the
middle of the week.
Senator Hickenlooper. Interesting. And better or worse for
small businesses?
Dr. Schor. Yes. Great question. Thank you. Over 70 percent
of the businesses in our U.S. and Canada sample have fewer than
25 employees. So, I think this is proving to be an especially
appealing thing for small businesses. And it may have to do
with higher levels of stress that they are seeing among their
employees.
I mean, one of the things we are seeing is the small number
of companies who are discontinuing. We are trying to figure out
what is common among them. And so far, the only thing we can
see is they are not achieving the same levels of well-being
increase that the ones who don't stop are.
Senator Hickenlooper. Interesting, right. When I was
Mayor--when I first became Mayor of Denver in 2003, we had the
worst budget recession ever.
One of the stopgap measures we did was we compelled all
city employees to take Friday afternoons off unpaid. Needless
to say, that was not perfect. No one likes to, when you are on
a tight budget, to have to make a budget balanced at the end of
the month. But people really liked it.
To this day that is--to give people that Friday off every
week. We saw an increase in sales at local restaurants, which
was interesting. And other, retail sales went up. So, there is
some accessory benefit.
Mr. Leland, I am going to skip past you, although I can't
tell you how excited I had the chief vision officer for
Kickstarter because I admire so much of what you all have done.
I am going to--I want to go to Dr. Vittert, just because I
found compelling that she was in 2018 the coolest person in
Scotland.
That her television show, Liberty's Great American
Cookbook, which is--is still showing in Scotland?
Dr. Vittert. It is.
Senator Hickenlooper. It still showing in Scotland, was
something----
Dr. Vittert. I need all the viewers I can get.
[Laughter.]
Senator Hickenlooper. Well, we want to make sure we don't
miss to promote that, because when I was the Mayor and working
through that, and I looked this up last night when I saw
because Vittert not a common name.
It is interesting that she seemed to the left of Mr.
Leland, because her brother, Leland Vittert, was a journalist
with international success, admired journalist with Fox back.
He was based in Denver when I first became Mayor. And so, he
schooled with--he re-educated me within the school of hard
knocks on how to think about these things.
Anyway, Dr. Vittert, one argument in favor of implementing
a 32 workweek is that, these tech advancements like AI are
going to make such a dramatic increase. How realistic do you
think that is? And when would those productivity increases
begin to show or begin to have a benefit?
Dr. Vittert. I think the issue that we see here is people
use the word AI and don't necessarily know what that means. And
as someone who works in this space, we don't know yet what
abilities AI is going to give us or machine learning.
I mean, we are still trying to figure out what those words
even really mean. So, to say that there is going to be this
explosion of productivity and wealth, we just don't know yet.
And no one is saying, or I am certainly not saying, it is above
my pay grade, that people shouldn't share in that.
But mandating a reduction to a 32 hour workweek is not the
way to do that.
Senator Hickenlooper. Got it. I hear that. And Mr. King,
same question to you because I think you got a little more,
going into AI, or on a deeper level. What is your feeling on
that?
Mr. King. Tremendous opportunity for everybody, absolutely.
But the issue of distribution of wealth, the wealth dividend,
Senator, from AI, I know that is what we are really talking
about here.
I would point the Committee's attention to chart one in my
testimony. Productivity and compensation have tracked similarly
for decades. Economists agree on that. Now, there have been
gaps in different industries. There has been time lag, Senator,
but the market will solve this issue.
Mr. Fain will negotiate hard for 32 hours. I am sure.
Others will advocate for 32 hours. We have examples that we see
work. But let the market decide this. Don't have Congress
impose this on employers or employees.
Senator Hickenlooper. Got it. Great. And then, sorry--go
over just for a minute. Mr. Fain, when you were negotiating and
introduced this notion of a 32 hour workweek--I mean, you have
talked firsthand with the large employers and large group of
employees. It ultimately wasn't included in the final contract.
But what were some of the concerns--unique concerns we
haven't heard before that were raised by the employers? And
what do you think it would take to get those employers to move?
I think in terms of the 36 hour work week that we tried
when I was Mayor of the city, it is really like a roughly a 10
percent pay raise. Just a way to think about doing something
like that. The level of appreciation of people having that
Friday afternoon off was palpable. You could feel it. Anyway,
what is your sense on that?
Mr. Fain. Well, I think it is just--obviously I think it is
just a fear of change or something--doing something different.
I mean, you look at, there are studies that have been done when
workers, especially factory workers, manufacturing, when they
work anything after 10 hours typically is--they are not as
productive.
It's just the wear and tear that you go through throughout
the day--there have been a lot of studies done on that. The
productivity actually drops off. So, there are benefits to
shorter working hours.
As a person who stood on a line, as an 18 year old, I can
vividly remember putting a part on a transmission. I would sit
there. It is monotonous work doing it over and over and over
and, literally after 2 hours of that, you are just--your mind
is wandering off and imagine doing that for 12 hours a day, 7
days a week.
There are a lot of benefits to having some semblance of
work life balance. But unfortunately with the advances in
technology, the companies choose to eliminate jobs and squeeze
more and more people, the remaining people working more and
more hours, and that just doesn't work.
Senator Hickenlooper. Right. I appreciate that. I have got
many more questions, which I will throw in writing, but I yield
back to the Chair. Thank you all again for being here.
The Chair. Thank you, Senator Hickenlooper.
Senator Hickenlooper. Tell him I said, hi.
The Chair. Senator Cassidy has asked unanimous consent to
enter into the record a number of statements. Without
objection.
[The following information can be found on page 52 in
Additional Material:]
The Chair. Mr. King, you can inform your clients that my
legislation probably will not be passing tomorrow.
Mr. King. Okay. Thank you. They will be glad to hear that.
The Chair. I am sure they will. But the point of this
hearing is to try to raise, at the congressional level,
something that has not been discussed here for decades after
decades. And I think, as all of us have understood, we are
living in a difficult moment in American history.
We have more income and wealth inequality than we have ever
had before. Senator Murphy made the interesting point that for
the billionaire class, now a majority of that wealth is being
not earned by any case, but being transferred to children--
unearned income, if you like.
We are seeing CEOs making 350 times more than their
workers, while 60 percent of the people in America are living
paycheck to paycheck. We have the highest level of childhood
poverty of almost any major country on earth. Many of our older
people finding it hard to retire.
We have got to start asking some fundamental questions.
This is an extraordinarily wealthy country, but three people on
top as Mr. Fain mentioned, own more wealth than the bottom half
of American society. According to the RAND Corporation, over
the last 50 years--and RAND Corporation is not exactly a
socialist organization.
Over the last 50 years, $50 trillion has gone from the
bottom 90 percent to the top 1 percent. So, in the wealthiest
country in the history of the world, the vast majority of the
people are struggling to put food on the table or living under
incredible stress. Our life expectancy is significantly lower,
as you know, than other countries.
For working class people, if you are working class in this
country, you are going to live 10 years fewer than you will if
you are upper class. These are issues that have got to be
discussed. I am not suggesting that a 32-hour workweek is going
to change all of that, but one of the issues that we have got
to talk about is stress in this country.
The fact that so many people are going to work exhausted,
physically and mentally. And the fact that we have not changed
the Fair Labor Standards Act. This was in 1940, we came up with
the 40 hour workweek--1940.
Who is going to deny that the economy has not fundamentally
and radically changed over that period of time? So, to suggest
that we have to maintain what we put in place 84 years ago does
not make a lot of sense to me.
Let me just conclude by thanking all of our excellent
panelists. It has been a good discussion. I hope the discussion
continues and thank you all very much for being here today. For
any Senators who wish to ask additional questions, questions
for the record will be due in ten business days.
I ask unanimous consent to enter into the record two
statements in support of shortend workweeks, including a
statement from Congressman Takano and business owners across
the country.
[The following information can be found on page 49 in
Additional Material:]
The Chair. The Committee stands adjourned.
ADDITIONAL MATERIAL
the honorable mark takano (ca-39)
As the lead sponsor of the Thirty-Two Hour Workweek Act in the
House and as a Senior Member of the House Committee on Education and
the Workforce, one of my top priorities has long been to ensure the
quality of life and pay for workers while broadly seeking to modernize
the structure of our workforce.
For decades, workers have been working longer hours while
productivity has skyrocketed and wages have remained stagnant. On
average, workers in the United States work 200 more hours per year than
comparable workers in other developed countries. The COVID-19 pandemic
only further exacerbated the need to have conversations about the
future of work, and more workers today are now reimagining their
relationship to labor. As we emerge from the pandemic, workers are
clear-eyed on the need for better work-life balance and fairer
compensation. Workers want more time for leisure and with loved ones,
and now seek to challenge the status quo of long hours with low pay
that defined the pre-COVID era. We are currently in the midst of a
rapidly evolving labor market and our laws need to be responsive to
that change.
This is why during the 117th Congress, I first introduced the
Thirty-Two Hour Workweek Act to amend the Fair Labor Standards Act
(FLSA) to reduce the standard workweek from 40 hours to 32 hours for
non-exempt employees. The bill's intent is to grow additional work
sharing and labor market participation, thereby creating healthier
competition in the workplace to empower workers to negotiate better
wages and working conditions. Outside of the legislative space, the
introduction of this legislation has catalyzed robust conversations
about the modern workplace.
Pilot studies on both a domestic and international scale have
yielded positive outcomes. Workers who have benefited from reduced
workweek trials have cited increased happiness, strengthened
productivity, and achieved a more tenable work-life balance. Congress
must seize this historic opportunity to memorialize the gains that
workers have achieved in this new environment. At a time when the
nature of work is rapidly changing, it is incumbent upon us to ensuring
our labor market prioritizes productivity, fair pay, and an improved
quality of life for workers--not merely profits for the biggest
corporations and wealthiest shareholders.
Furthermore, the proliferation of artificial intelligence (AI) will
have far reaching ramifications across the economy. Even in the
technology's infancy, we are witnessing transformative changes, and
questions remain about its impacts and how we can use AI to restructure
our workforce and redefine the typical workweek.
It is abundantly clear that the United States is at another
inflection point. Will Congress respond to the demands and needs of the
everyday worker? Or rigidly adhere to an outdated model that has
unfairly tipped the scales of power in favor of capital holders and the
rich? This legislation would achieve the former, and I call on Congress
to take deliberate action to move this legislation and other bills that
are responsive to the needs of workers.
Thank you to Chairman Sanders and Ranking Member Cassidy for the
opportunity to submit this testimony. I look forward to building on the
progress to help lift up all workers, regardless of their income or
background.
______
letter to policymakers in support of shorter workweeks
We are executives and organizations who have adopted a shorter
workweek with no reduction in pay, and we represent a range of
industries, from tech, healthcare, finance, nonprofit, government,
manufacturing, and more. We write to you today to urge policymakers to
explore and enact legislation that supports the transition toward a
shorter 32-hour workweek with no decreases in pay. We have seen
firsthand how transformative a shorter workweek can be for workers and
employers and thus believe policymakers should advance legislation to
pilot, facilitate, research, and ultimately adopt the widespread
implementation of a shorter workweek.
The 40-hour workweek has been the assumed standard for close to 100
years. \1\ We are long overdue for an update. Since the adoption of the
5-day workweek, our economy and culture have undergone transformational
changes. Technology has increased productivity and connectivity at the
workplace, women have entered the workforce in great numbers, \2\ and
an epidemic of burnout and stress has emerged. \3\ Yet, despite these
radical shifts in how and where we work, the length of the workweek has
not budged. It is time to rethink the workweek, especially as we
prepare for the rapid emergence of artificial intelligence that offers
the potential to drive transformative productivity gains and
efficiencies for organizations. Embracing a shorter workweek can bring
about numerous benefits for employers, workers, and society as a whole.
---------------------------------------------------------------------------
\1\ Sopher, P. (April 2018). Where the 5-day workweek came from.
The Atlantic.
\2\ St. Louis Fed. (February 2024). Labor force participation
rate--women. Labor force participation for women rose from1/3d
participation in 1948 to between 55-60 percent participation in the
21st century.
\3\ Aflac WorkForces Report: Workplace Benefits Trends. Employee
Well'being and Mental Health 2022-2023. Six out of ten labor force
participants report presently experiencing moderate to high burnout.
---------------------------------------------------------------------------
For Employers:
Increased Productivity: Studies have shown that
shorter workweeks can lead to higher levels of productivity per
hour. \4\ By having more time for rest, family, and personal
pursuits, employees return to work rejuvenated and more
focused, resulting in greater efficiency during working hours.
---------------------------------------------------------------------------
\4\ Fan, W., Schor, J., Kelly, O., and Gu, G. (2023, December 23).
Does work time reduction improve workers' well-being? Evidence from
global 4-day workweek trials; and 4 Day Week Global. (July 2023). The 4
Day Week: 12 Months on with new U.S. and Canadian research.
Improved Recruitment and Retention: In a competitive
job market, companies that prioritize work-life balance and
offer shorter workweeks stand out as desirable employers.
Studies show that companies with a 4-day workweek attract more
applicants and reduce turnover rates, saving on recruitment and
training costs. \5\
---------------------------------------------------------------------------
\5\ Kiderlin, S. (October 2022). 4-day work week firms are seeing
a surge in job applications. CNBC.
Enhanced Employee Engagement: Offering a shorter
workweek demonstrates a commitment to employee well-being,
fostering a positive work culture and improving morale. Engaged
employees are more likely to be loyal, innovative, and
dedicated to their work. \6\
---------------------------------------------------------------------------
\6\ Josh Bersin. (December 2023). How to Actually Execute a 4-Day
Workweek. Harvard Business Review. ``[Four-day workweek] companies also
reported a 57 percent decline in the likelihood that an employee would
quit, plus a 65 percent reduction in the number of days taken off as
paid sick time.''
---------------------------------------------------------------------------
For Workers:
Improved Work-Life Balance and Well-being: A shorter
workweek allows employees to better balance their professional
responsibilities with personal and family commitments, as
evidenced by employees at companies with 4-day workweeks
reporting significantly lower levels of burnout (9 percent)
when compared to employees at companies with typical 40-hour
workweek schedules (42 percent). \7\ Shorter workweeks lead to
reduced stress, better mental and physical health, and stronger
relationships outside of work.
---------------------------------------------------------------------------
\7\ Infinite Potential and Work Time Reduction Center of
Excellence. (February 2024). The State Of Workplace Burnout.
Increased Time to Care for Loved Ones: A shorter
workweek promotes equitable practices for groups such as
caregivers. \8\ There are considerable childcare, healthcare,
eldercare, and other costs to families who have to spend time
caregiving. A shorter workweek acknowledges the value of
caregiving time and validates the experience of caregivers by
providing more spaciousness and flexibility to tend to a
variety of responsibilities.
---------------------------------------------------------------------------
\8\ Liu, J. (February 2023). Workers report a 4-day workweek
improves health, finances and relationships: It `simply makes you
happy.' CNBC.
Opportunities for Personal Development: With more
time outside of work, employees can pursue hobbies, further
their education, or engage in community activities. This not
only enriches their lives but also fosters personal growth and
---------------------------------------------------------------------------
fulfillment.
For Society:
Economic Stimulus: A shorter workweek can stimulate
economic activity by spreading employment opportunities across
more workers. \9\ This can help address unemployment and
underemployment issues while boosting consumer spending.
---------------------------------------------------------------------------
\9\ Sawhill, I. V. (May 2016). Time for a shorter work week?
Brookings.
Environmental Benefits: Reducing working hours can
lead to a decrease in commuting and energy consumption,
contributing to environmental sustainability and mitigating
climate change. \10\
---------------------------------------------------------------------------
\10\ Fan, W., Schor, J., Kelly, O., and Gu, G. (2023, December
23). Does work time reduction improve workers' well-being? Evidence
from global 4-day workweek trials; and 4 Day Week Global. (July 2023).
The 4 Day Week: 12 Months on with new U.S. and Canadian research.
Social Equity: Shorter workweeks promote equality by
ensuring that all members of our society can tap into the
benefits of a shorter workweek rather than exacerbating
existing disparities among groups such as hourly workers,
unionized workers, or industries such as the care economy. This
---------------------------------------------------------------------------
helps create a more inclusive and cohesive society.
Our economy and society have changed; so must our workweek. We urge
policymakers to consider and support legislation that facilitates the
transition to a 4-day workweek, paving the way for a more prosperous,
healthy, and balanced future.
Thank you.
Sincerely,
Carrie Cadwell,
CEO, 4C Health.
Teylor Schiefelbein,
CEO, Alter Endeavors.
Liz Powers,
Co-founder and CEO, ArtLifting.
Sam Mazzeo,
Managing Attorney, Better APC.
Alan Palm,
Executive Director, Better Future Project.
Angela Lang,
Executive Director, Black Leaders Organizing for Communities
(BLOC).
Aaron McCall,
Federal Advocacy Coordinator, California Environmental Voters.
Jennifer Njuguna,
Co-CEO, Common Future.
Elise Allyn,
Associate Consultant & Lead Analyst, Conscious Revolution.
Zen Trenholm,
Senior Director of Employee Ownership Cities and Policy,
Democracy at Work Institute.
Sammy Chavin-Grant,
Federal Strategy Director, Family Values @ Work.
Adrian Power, Founding Partner,
Good Stuff Partners.
Alison Gianotto, CEO,
Grokability, Inc.
Michael Arney,
CEO, Halftone Digital.
Jennifer Brandel,
CEO, Hearken.
Tarik Nally,
Founder & Creative Principal, Kale & Flax.
Maira Danyal,
Strategist, Kale & Flax.*
Jon Leland,
Chief Strategy Officer, Kickstarter.
Gabriel Stein,
Head of Operations and Product, Knowledge Futures.
Mary Alexander,
CEO, KnowledgeOwl.
Jake Lipsman,
Director of Impact Research and Analysis, LifeCity, L3C.*
Dimitrios Cavathas,
CEO, Lower Shore Clinic.
Howard Kaibel,
Brand Manager, M'tucci's Restaurants.
Lauren McGuire,
President, Made Music Studio.
Karim Bouris,
Principal, Mixte Communications.
Dom Kelly,
Co-Founder, President and CEO, New Disabled South.*
Amy Sample Ward,
CEO, NTEN.
Katie Carter,
CEO, Pride Foundation.
Ashton Lattimore,
Editor-in-Chief, Prism.
Shanti Mathew,
Managing Director, Public Policy Lab.*
Emily Kelleher-Best,
CEO, Seed&Spark.
Emily VanDerEems,
Brand Manager, TGW Studio.
Aimee Woodall,
CEO, The Black Sheep Agency.
Michael Abramson III,
Director of Policy & Advocacy,
Women's Foundation for the State of Arizona.
*Signing as individuals as opposed to on behalf of an organization
______
a 4-day workweek would destroy everything that made america great
By Liberty Vittert, Opinion Contributor
For some people, the 4-day workweek is the new dream.
This measure, supposedly a panacea for employee satisfaction, even
found its way into the United Auto Workers' demands in their contract
talks. Liberal bastions such as Massachusetts and California have
pushed bills upon businesses to adopt a 4-day work week.
We may not see it yet, but this measure threatens to undo
everything that made our Nation's current prosperity possible.
America was built on a 6-day workweek. The 5-day week originated
nearly a century ago with Henry Ford, who used it to remove incentives
for his employees at Ford to unionize.
The argument for the 4-day workweek is much more tendentious,
making broad claims based on weak and flawed data sets.
Story after story in the media expounds upon how much ``less
stressed'' employees are with a 4-day workweek. At the risk of sounding
pedantic, well, duh! Of course less work means less stress. Work is
stressful, as any working person can tell you. But stress is part of
life. You will never be stress-free until you're dead. Has any society
or economy grown or possessed any dynamism while everyone was lying in
hammocks?
Given that so many news stories are making such expansive claims
about how beneficial this is, why aren't more companies doing it? Why
is it that the number of 4-day-a-week jobs has not changed in the last
3 years?
The short answer is that it just doesn't work. A more complex
answer is that it isn't good for those employees' companies. And if you
want to see those same employees really stressed out, just see what
happens when their employers lay them off or shut their doors due to
falling productivity or lost profits.
Most of the studies behind this fad, extolling the benefits of
shorter hours, are self-reported. In other words, employees are the
ones saying they are less stressed and more productive. These data are
not based on company revenue or any other objective metric.
It's also worth mentioning that Japan already tried this. From 1988
to 1996, Japan shortened the workweek from 46 to 30 hours. The result
was not ambiguous: Economic output fell by 20 percent.
But let's take a closer look at the studies cited to support the
shorter 4-day week. Iceland did something similar when it shortened
health care workers' hours on a trial basis starting in 2015. The
results were blasted all over the headlines (especially during and
after COVID). Some are now calling it an ``overwhelming success'' for
the 4-day workweek.
Two think tanks that heavily shill for the 4-day week base their
case on this study. But the first thing to note is that this study
didn't actually test a 4-day week at all. Rather, it shortened their
overall hours in a 5-day week. The trial included only about 1 percent
of that tiny nation's workforce, and (no shocker here) it showed that
employee well-being did increase with a reduction in working hours. But
it was a complete mess for the employers. The Icelandic government had
to shell out almost $30 million extra each year to hire more health
care workers because of the experiment.
Microsoft also tested a 4-day workweek by shutting down its Japan
office every Friday during the month of August. The claim is that this
resulted in a 40 percent increase in productivity. But if that's true,
then why aren't they doing this everywhere Microsoft operates? Again,
the answer is simple: Productivity increased over a very short period
of time during a low-productivity summer month, when overall
productivity was already at a 75-year low.
In all fairness, who doesn't want to work 80 percent of the hours
for 100 percent of the salary and benefits? But the problem is that the
4-day week doesn't work for the bottom line, no matter how much the
media or employees would like it to.
For any customer-facing business, a 4-day week would be a
nightmare. If your company is open only 4 days a week, or if it has
significantly reduced operations 1 day each week, then how do people
reach your staff? The result is that companies have to hire more staff,
which in turn raises costs.
We built this Nation and got ahead working six or six-and-a-half
days a week. The countries that are now competing against us have
essentially 7-day work weeks, and they are rapidly catching up to us.
If American companies bow to pressure and embrace this new think-
tank-driven fad, we are going to have a real challenge on our hands
when it comes to competing with our adversaries.
Liberty Vittert is a professor of data science at Washington
University in St. Louis and the resident on-air statistician for
NewsNation, a sister company of The Hill.
Copyright 2024 Nexstar Media Inc. All rights reserved. This
material may not be published, broadcast, rewritten, or redistributed.
______
March 14, 2024
Hon. Bernie Sanders, Chair,
Hon. Bill Cassidy, Ranking Member,
U.S. Senate Committee on Health, Education, Labor, and Pensions,
Washington, DC.
Dear Chair Sanders and Ranking Member Cassidy:
The undersigned organizations write to express our concerns with
the ``Thirty-Two Hour Workweek Act.'' The bill's provisions would
exacerbate the current worker shortage and dramatically increase
inflationary pressures. The result would be a deterioration in spending
power for American families, a decline in the availability of goods and
services--including critical services--and diminished competitiveness
internationally.
Reducing the standard workweek from 40 to 32 hours would result in
a decline in productivity. Companies would have to adjust by finding
additional workers, increasing prices to account for increased labor
costs, and producing fewer goods and services. Consumers would feel the
impact as costs increase and services are reduced across industries,
including construction, retail, and hospitality and critical services,
such as childcare, education, healthcare, government, and security.
Many of these industries require worker coverage 24 hours a day and 7
days a week and already struggle to meet demands. To cover the lost
work hours, industries would need to hire more labor, which is already
a challenge due to the existing significant labor shortage. There are
currently 1.4 job openings for every unemployed worker in the U.S. \1\
In January 2024, the Health Care and Social Assistance and Leisure and
Hospitality industries alone had 1.9 and 1.1 million open jobs,
respectively. \2\ The inevitable result of this bill would be fewer
services and increased prices for consumers at a time when is inflation
is already high. \3\
---------------------------------------------------------------------------
\1\ Bureau of Labor Statistics, ``The Employment Situation--
February 2024,'' March 8, 2024, available at https://www.bls.gov/
news.release/pdf/empsit.pdf.
\2\ Bureau of Labor Statistics, ``Job Openings and Labor Turnover
Summary,'' March 6, 2024, available at https://www.bls.gov/
news.release/jolts.nr0.htm.
\3\ The Consumer Price Index for All Urban Consumers (CPI-U) rose
0.4 percent in February 2024, the largest increase since September, to
3.2 percent. The Federal Reserve aims for an inflation rate of 2
percent, which the United States has not experienced since before the
COVID-19 pandemic in 2020. See Bureau of Labor Statistics, ``Consumer
Price Index Summary,'' March 12, 2024, available at https://
www.bls.gov/news.release/cpi.nr0.htm.
Given these concerns, we strongly urge the Committee to reconsider
this legislation and focus instead on measures that will alleviate,
rather than exacerbate, inflationary pressures and the current
---------------------------------------------------------------------------
workforce shortage.
Sincerely,
American Hotel & Lodging Association
Associated Builders and Contractors
Associated General Contractors of America
International Foodservice Distributors Association
International Franchise Association
National Association of Wholesaler-Distributors
National Federation of Independent Business
National Restaurant Association
National Retail Federation
______
QUESTIONS AND ANSWERS
Response by Juliet Schor to Questions of Senator Cassidy
senator cassidy
Question 1. The companies that voluntarily participated in your
study are traditionally white-collar industries rather than occupations
requiring more physical work. Productivity gains achieved through
advancing technology allowed the reduction in hours worked. How does
that apply to professions that require manual labor?
Answer 1. Although most of the companies in our studies are in
white-collar industries, not all are. Eight percent are in construction
and manufacturing. We also have restaurants (1 percent) and health care
companies (6 percent). The largest organization in our study, a 1000
person health care company, had such a successful experience they told
us they are expanding the 4-day week to all 5000 of their employees.
The productivity improvements that companies reported are due to
multiple factors, not just advanced technologies. Many find that
changes to their meetings practices, fewer interruptions, and more
advance planning free up time. Some report that when their employees
are better rested and less stressed they are more productive. Employees
self-report higher productivity.
Question 2. Your testimony noted several companies around the world
that have transitioned to a 4-day, 32-hour workweek. Were any of these
transitions as a result of a government mandate, or did employers
voluntarily adopt a shorter workweek?
Answer 2. All of the organizations in our early waves did this
without a government mandate. However, there are now governments that
are sponsoring trials, and we are involved with the Portuguese and
Scottish national trials. In those trials, companies join voluntarily.
Question 3. Chairman Sanders argues that the United Kingdom's 4-day
workweek pilot program of 3000 workers at more than 60 companies was a
``huge success.'' \1\
---------------------------------------------------------------------------
\1\ Production line workers are estimated at 145,823 in 2021.
https://www.zippia.com/production-line-jobs/demographics/. Total
employment in the U.S. was 161 million in February 2024.
Question 3(a). Did the 4-day workweek pilot program consist of 8-
---------------------------------------------------------------------------
hour days or 10-hour days?
Answer 3(a). There are no 10 hour day companies in our studies. The
vast majority are on 8 hour schedules, however, there are a few who
offer some employees five shorter days or flexible reduced-hour
schedules. All companies in the trials must offer reduced hours of work
with no reduction in pay.
Question 3(b). If the 4-day workweek was so successful, why did 9
percent of businesses not continue the shorter workweek?
Answer 3(b). There are a variety of reasons that a small number of
companies did not continue. There is no common reason. One company was
taken over by a private equity firm that canceled it without
explanation. For a few their inability to identify metrics for success
led to a pause or an end to the 4-day week. A few were very small
entities (4-10 employees) for whom limited staff capacity led to their
ending the new schedule. One ended the 4-day week when half their team
went on maternity leave. The other (a retail shop) decided they wanted
to stay open 5 days. There were a few for whom downturns in business
were the reason. In one or two other cases, it seems they lacked
capacity to meet orders. Quite a few of the companies in our trials are
growing rapidly and keeping up with demand can be challenging.
Question 3(c). What types of companies participated in the UK pilot
program? Were there any manufacturing companies that use assembly
lines?
Answer 3(c). The UK program had companies from a wide variety of
industries (see Figure 1 below). Marketing and advertising (18 percent)
was the largest group, followed by professional services (16 percent).
Finance and insurance was 9 percent and healthcare and social insurance
was also 9 percent. Manufacturing companies were 7 percent of the
total, and construction and housing were 4 percent. To my knowledge
there were no companies with assembly lines. In the U.S., only .09
percent of workers currently work on assembly lines.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Response by Shawn Fain to Questions of Senator Cassidy
senator cassidy
Question 1. Is it true that some of your members work 10-, 12-, and
15-hour shifts for as many as 90 days in a row? If so, and Congress
moved to a 32-hour workweek, wouldn't it make sense for your members to
continue to work the same number of days to collect additional
overtime?
Answer 1. UAW members at Ford, General Motors, and Stellantis work
varying work schedules, including long shifts. Working people don't
need more overtime, we need more time for ourselves and with our
families. When our members look back on their lives, they never say ``I
wish I had worked more.'' They never say, ``I wish I'd made more
money.'' They say, ``I wish I had more time.''
Question 2. The premise of this hearing is that employees do not
see the benefits of technology in the workplace. Since 2006, the Mine
Act requires mine operators to track miners working underground so that
in an emergency their last known location is recorded. Do you agree
that this type of technology benefits miners?
Question 2(a). Can you identify other advanced technologies that
benefit employees?
Answer 2(a). The UAW does not currently represent workers subject
to the Mine Act. We defer you to our brothers and sisters at the UMWA
for their opinion on what would benefit miners. Any technology that
increases productivity--whether automation, artificial intelligence, or
regular improvements in the production line--must be deployed to the
benefit of the workers who build the products and contribute their
labor.
Question 2(b). How would a Federal 32-hour workweek mandate impact
your current contracts?
Question 2(c). Would you need to renegotiate the current contract
with the Big Three?
Answer 2(b). Federal legislation moving the workweek from 40 to 32-
hours with no reduction in pay would raise standards at work for all
working people.
Answer 2(c). Our contracts with Ford, General Motors, and
Stellantis will remain in effect until May 1, 2028, regardless of
changes in Federal employment law.
Response by Jon Leland to Questions of Senator Cassidy
senator cassidy
Question 1. When does your company start to pay your employees
overtime?
Answer 1. We do not currently employ any hourly wage workers, so we
do not pay overtime. However, we do offer comp time to our salaried
employees when they work over 32-hours in a workweek.
Question 2. Can you describe what steps Kickstarter had to take to
transition to a 32-hour workweek?
Answer 2. We instituted organization-wide policies to eliminate or
reduce meetings and provided clear performance expectations for each
team that they had to maintain with a 32-hour workweek. At the team
level, we worked with managers to identify and eliminate low impact
work or opportunities to gain efficiencies in their processes. This
looked different for every function as teams like engineering, sales,
and customer support very different types of labor that required
different adaptations. For functions like engineering, we improved our
processes around project requirements and scoping to reduce ambiguity
and alignment challenges that tended to slow down work. For customer
support, we developed a richer set of pre-written and implemented
artificial intelligence assistance to speed up our ability to respond
to customer requests while maintaining the same level of user
satisfaction. We reduced our vacation days proportionately (from 20
days to 16) and we determined that we needed to maintain the 4-day
workweek even when there was a holiday, so while we typically work
Monday to Thursday, we switch to a Tuesday to Friday schedule when
Monday is a holiday.
Question 2(a). Would you agree that there are business models
incapable of cutting meetings or using artificial intelligence to
adjust for a 32-hour workweek?
Answer 2(a). While there are business models incapable of primarily
relying on cutting meetings or using artificial intelligence to adjust
to a 32-hour workweek, there are typically other adjustments those
employers can and have made to successfully make the transition.
Question 2(b). How would you propose that those types of businesses
manage the transition?
Answer 2(b). No matter the industry, overall organizational
productivity is not simply a factor of the number of hours worked.
Efficiency, focus, employee quality, and retention are equally or more
critical factors. It is simply a fact that a lot of time at work is not
used effectively. I can't articulate all the ways that companies across
different sectors manage the transition to a 4-day workweek, but there
are success stories from a number of industries where cutting meetings
or using artificial intelligence are not impactful, including
manufacturing, healthcare, restaurants, and pest control. While exact
implementations vary, the common thread is that maintaining a well-
rested and focused workforce working a 32-hour workweek is more
effective than trying to maintain a burned out and high turnover
workforce on a 40-hour workweek.
______
Response by Roger King to Questions of Senator Cassidy
senator cassidy
Question 1. Requiring employers to pay employees for 40 hours when
they work only 32 would put Congress in the position of having to
legislate the wage for each position in the workforce, or mandate that
no business could ever reduce any worker's salary. Does Congress have
that power?
Answer 1. It is questionable whether Congress has the authority to
legislate wage structures for private sector employers covered by the
NLRA. While there is statutory and constitutional authority for
Congress to enact minimum wage statutes and also statutory protections
for minors in the workplace, I am not aware of any statutory or
constitutional authority for Congress to indirectly or directly
establish wage schedules for all of an employer's employees. Stated
alternatively, Senator Sanders' proposal would require an employer to
establish a new wage structure for all employees and positions that
were initially impacted by a conversion from a 40-hour to a 32-hour
work week. This approach would establish ``minimum wages'' for all
impacted positions and employees and have a corresponding impact on the
entirety of an employers' wage structure. Further, this approach would
prohibit an employer from ever decreasing the rate of pay and benefits
for such impacted positions. Again, I am not aware of any authority
that Congress may have to require an employer to adopt such a wage
schedule.
Question 1(a). Would Senator Sanders' legislative proposal protect
workers hired after implementation from earning less than their peers?
Answer 1(a). It is unclear as to the ``longevity'' of Senator
Sanders' proposal regarding impacted positions and employees converting
from a 40-hour to a 32-hour work week. How long would such a
requirement remain in place? It is also not clear whether employees not
initially covered by such a conversion but who were later placed in the
initially converted positions would be covered by Senator Sanders'
``hold harmless'' wage and benefit requirement. Further, it is not
clear whether Senator Sanders' proposal would also require an amendment
to the Employee Retirement Income Security Act (ERISA) as his proposal
also requires a hold harmless approach to benefits. In summary, there
are more questions than answers with respect to Senator Sanders' hold
harmless approach.
Question 2. If Congress mandates a 32-hour workweek, what would be
the impact on employer-sponsored health insurance? Would employers be
incentivized to reduce workweeks to 20 or 30 hours so they don't have
to provide health insurance?
Answer 2. As stated in my testimony, it is quite probable that
Senator Sanders' approach to require a maintenance of benefits for
employees converting from a 40-hour to a 32-hour work week could have a
number of adverse consequences to an employer's health benefit plans.
Specifically, healthcare benefit contributions by employers are often
tied to the number of hours worked by an employee in a work week.
Employees who would have their work week hours reduced would
potentially either suffer a reduction in healthcare coverage or have
such coverage eliminated altogether. Even assuming that Senator Sanders
could lawfully mandate no such negative impact upon employees as their
work week hours are reduced, there would be benefit contribution
issues. For example, an employer would be forced to increase the amount
of its hourly contribution rate for the benefit plans in question or
make other adjustments given the fact that employees would be working
fewer hours in a work week. Even if Congress has this authority, how
long would such a mandate be effective, particularly for new employees
coming into positions that were initially covered by the reduced work
week and salary and benefit hold harmless provisions? Would it only be
effective for those employees and positions that were initially
impacted by the reduction in the number of hours worked in a work week?
The financial and operational impact of such ``hold harmless'' benefit
coverage should be closely scrutinized with appropriate in-depth
studies.
Question 3. The Biden administration is proposing to increase the
overtime threshold to $55,068, a 55 percent increase from the level set
in 2020. Can you describe how this change, in addition to an adjustment
to the standard 40-hour workweek and an increase in the minimum wage,
would impact businesses of all sizes?
Answer 3. Pursuant to Senator Sanders' approach employers will be
adversely impacted in three ways. First, Senator Sanders' proposal
would require the establishment of a new increased base rate that would
be utilized for overtime pay calculations. This new rate would have to
be applied to determine the amount of overtime rate of pay. In every
instance, the amount of overtime pay would increase considerably.
Second, there would be a considerable increase in the number of non-
exempt employees eligible for overtime, pursuant to the Biden
administration's proposal to increase the hourly salary/wage threshold.
Accordingly, there would be more employees receiving overtime pay at a
higher overtime rate. Third, employers, in manyinstances, will have to
increase the amount of overtime in a work week to compensate for the
loss of work week hours thereby increasing their overall payroll cost.
When you combine all three of these adverse impacts on employers, it
may be financially difficult for a business to continue to operate or,
in the alternative, it would operate with a substantial reduction in
its work force and/or a conversion of full-time jobs to part-time jobs.
Finally, to the extent an employer could navigate such considerable
wage increases in its payroll cost, in most instances it would have to
pass on this added cost of doing business to consumers, thereby further
increasing inflationary pressures on our economy.
Question 4. Senator Sanders recently introduced his ``Thirty-Two
Hour Workweek Act.'' It appears that it would have the potential to
decrease by as much as 20 percent the amount companies would pay into a
defined benefit plan until the next collective bargaining agreement
(CBA) is consummated. Is this correct? What would be the financial
impact of this on these plans?
The impact of Senator Sanders' proposal on defined benefit for both
union and nonunion employers could be considerable. For example, an
employer's benefit contribution obligation, in many instances, is to
provide contributions on an hours-worked basis. Assuming employees
reduced their hours worked in a work week, the employer's corresponding
benefit contribution obligation--absent a renegotiation of the
applicable plan requirements--could be considerably impacted. This
issue of employer benefit contribution is another aspect of the 32-hour
work week that will have to be carefully analyzed. Further, have the
ERISA implications from a statutory amendment perspective been fully
considered? Finally, if employer benefit contributions are
significantly decreased, benefit plans would also be adversely
impacted. Indeed, perhaps a number of benefit plans would have to
greatly curtail their healthcare benefits coverage or cease to exist
altogether. Any such negative consequences for employer healthcare
plans could have a corresponding adverse impact on the nation's
healthcare network and correspondingly increase the need for more
governmental Medicare and Medicaid assistance.
Response by Liberty Vittert to Questions of Senator Cassidy
senator cassidy
Question 1. You have examined various 32-hour workweek studies.
What are your conclusions about the impact of a shortened workweek on
businesses and workers?
Answer 1. There are significant statistical flaws in all of the
studies I have examined and are regularly touted as proof of concept
for the shortened work week. There are also many overlooked studies
that show the true detriment to both the workers and the economy of the
country.
First, productivity does not necessarily increase with a shortened
work week in the longterm. Besides the issue of defining exactly what
productivity or success means in different companies or countries, we
have seen in multiple studies that long-term there is a significant
decrease in productivity as measured by the country's GDP (a study in
Japan run from 1988 to 1996) where economic output fell by 20 percent
after a significant reduction in working hours.
Second, there is a large self-selection issue of companies
participating in these studies such as with the 4 Day Week Global
study. The companies are choosing to participate, potentially meaning
that they are small and trying to grow (enticing new workers) or are
capable of reducing hours by removing extraneous meetings, coffee
breaks etc., a point made by the study conductors themselves. Given
that 75 percent of the workforce in the United States works with their
hands, there are no extraneous meetings to cut out.
Third, a study in Iceland that is widely cited as a measure of the
success of the shortened work week, fails to mention that the Icelandic
government had to expend almost $30 million extra to hire more
healthcare workers because of the experiment. This is also the case
with a study in Spain where companies that participate in the pilot
were also eligible for a multi-million dollar government fund to help
subsidize.
Fourth, the concept that this reduction in hours will automatically
increase happiness and decrease stress long-term is statistically
flawed. For example, in France, the government mandated the reduction
of the standard work week from 39 hours to 35 hours. There was no
evidence that this increased workers' happiness and in fact, decreased
it, due to the need of companies to hire part-time, cheaper, workers.
Should workers not have jobs, or have to work two jobs since with this
plan companies are incentivized to hire part-time workers instead,
stress and unhappiness will surely increase.
Question 2. If all it takes to transition to a 32-hour workweek is
reducing meetings and streamlining processes as mentioned in Mr.
Leland's testimony, why haven't all companies or all economies moved to
a shortened workweek?
It is specifically only companies that are able to adapt to a
shorter workweek that tend to participate by cutting out, as they say,
extraneous meetings, coffee breaks, or having more independent work.
However, over 75 percent of the U.S. job economy is people working with
their hands, they don't have extraneous meetings or too many coffee
breaks to cut out. Statistically, you cannot apply this type of cutting
across all types of companies, which is necessary for any kind of
successful reduction in work hours.
Also, given the types of companies that are potentially capable of
cutting their work week, we could see a divide of the rich getting
richer (or working less time) and the poor needing to take on part time
jobs. We also disadvantage older workers who cannot necessarily
physically do the same amount of work in a shorter time, which happened
to great detriment to that population during the Great Depression.
Question 2(a). Is this sustainable in 24-hour industries?
No, it is not. It will be devastating to companies economically and
even if they can do it, it will encourage them to hire part-time
workers instead of full time workers leading to stereotypically lower
pay and less benefits.
Question 3. In an op/ed piece for The Washington Post, Chairman
Sanders touted Belgium, France, Norway, and Denmark as positive
evidence for mandating a 32-hour workweek in the United States. \1\
---------------------------------------------------------------------------
\1\ https://www.washingtonpost.com/opinions/2024/03/19/32-hour-
work-week-sanders-fain/.
Question 3(a). What was the impact on economic output in each of
---------------------------------------------------------------------------
these countries?
Answer 3(a). They did not mandate necessarily a 32 hour work week,
some did 36 hours or some did a shortened work week but the same amount
of hours so using these as evidence is not an apples to apples
comparison. There were also huge issues for employees is some of these
countries with layoffs due to this implementation. Also, for a lot of
these studies there were enormous government subsidies to allow this to
happen.
Question 3(b). Long term, do workers sustain the same level of
satisfaction popular studies have noted?
Answer 3(b). Many of the news headlines touting these studies
discuss the stress or happiness levels of workers who work less time.
Inevitably, over the short term, in these short pilot projects, it is
not inconceivable to imagine that happiness levels increase--the
question is where does the pendulum end--at no work? Statistical
studies show that it doesn't actually matter if we decrease the work
time in the long run--workers' happiness fails to improve over the
long-term studies we have that are often ignored by proponents. For
example, the study in France, after mandatory government reduction of
hours saw a return to the same level of happiness after 7 years.
If you want to see those same employees really stressed out, just
see what happens when their employers lay them off for part-time
workers that generally take lower pay and less benefits or even shut
their doors due to falling productivity or lost profits.
Question 4 Chairman Sanders also noted that in 2019, Microsoft
tested a 4-day workweek in Japan and reported a 40 percent increase in
productivity. \2\
---------------------------------------------------------------------------
\2\ Ibid.
Question 4(a). Was the 4-day workweek at Microsoft in Japan
---------------------------------------------------------------------------
successful?
Answer 4(a). It was not successful in any statistically meaningful
manner. Microsoft tested a four-day work week by shutting down its
Japan office every Friday during the month of August. The claim is that
this resulted in a 40 percent increase in productivity. This is a
statistical fallacy that correlation does not necessarily mean
causation. Productivity increased over a very, very short period of
time during a low-productivity summer month, when overall productivity
was already at a 75-year low.
There is no statistical evidence to merit a nationwide mandate of a
32 hour work week and, in fact, clear evidence against it. If it works
for some companies in some sectors, then great, but it will be highly
detrimental to the majority.
Question 4(b). Why hasn't Microsoft implemented the 4-day workweek
worldwide?
Answer 4(b). Because it was clearly not successful in any
statistically meaningful way.
______
[Whereupon, at 11:29 a.m., the hearing was adjourned.]
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