Mexican Billionaire Proposes Three Day-Day Workweek
Mexican billionaire Carlos Slim called for a shorter work week at a business conference in Paraguay, the Guardian reports.
Slim proposed reducing the workweek to three days, but at the same time lengthening the workday to 10 or 11 hours and raising the retirement age to 70 or 75, saying the change would make workers more productive and improve their quality of life.
His proposal echoes comments made by Facebook COO Sheryl Sandberg, who in a 2012 video admitted to leaving the office at 5:30 in order to spend more time with her children, and defended the practice as being beneficial both personally and professionally.
To get an idea of the relationship between hours worked and productivity, it is possible to compare data for the United States and Europe. According to the Federal Reserve, average annual hours worked per person have generally decreased in both the U.S. and Europe since the 1960s, but much more precipitously in Europe. America overtook Europe in this respect in the early 1980s, and the gap has continued to widen since.
In a 2004 study, Edward Prescott, an economist at the Federal Reserve Bank of Minneapolis, analyzed data from the G-7 countries and found that, relative to the U.S., output per person in Europe remained fairly steady between the 1970s and the 1990ss, even as the number of hours each person worked fell sharply. By implication, the declining number of hours worked per person in Europe corresponded with an increase in output per hour worked.
Then again, Prescott also noted that higher marginal tax rates tend to reduce labor supply by decreasing the incentive for work, and that the data for hours worked per person does not include “time spent working in the underground economy or in the home sector.”
As a result, it is possible that higher tax rates caused European workers to put in a greater number of hours “off the books”, inflating the figures for output per hour worked.
Slim seems to recognize that no single approach is ideal for all workers, based on the offer he made to employees at Telmex, the communications company where he serves as CEO. Under the new policy, workers will be given a choice between taking early retirement and continuing to work at full pay for four days a week.
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