Thursday, January 10, 2019

How long should the workday be?

  It has been eighty years since the Fair Labor Standards Act (FLSA) was passed by Congress and signed into law by Franklin D. Roosevelt on June 25, 1938. The FLSA established a national minimum wage of 25¢ an hour, mandated time and a half for overtime in certain jobs, prohibited most child labor, and established a 44-hour workweek (lowered to 40 hours in 1940).

  Although the national minimum wage has steadily risen to $7.25 per hour (where it has stood since 2009), the workweek has never been lowered below 40 hours.

  Some people want that to change.

  In 2017, Jack Ma, billionaire and co-founder of Alibaba, the Chinese multinational conglomerate and world’s largest retailer, predicted that in 30 years, people will be working less than they do now. As reported by CNBC, “I think in the next 30 years, people only work four hours a day and maybe four days a week. My grandfather worked 16 hours a day in the farmland and [thought he was] very busy. We work eight hours, five days a week and think we are very busy.”

  Just recently, Steve Glaveski, the CEO and co-founder of Collective Campus, a corporate-innovation and start-up accelerator based in Australia, made the case for the 6-hour workday.

  Writing in the Harvard Business Review, Glaveski explained, “The internet fundamentally changed the way we live, work, and play, and the nature of work itself has transitioned in large part from algorithmic tasks to heuristic ones that require critical thinking, problem-solving, and creativity.” Heuristic work “requires people to get into the physiological state of flow,” defined as “the state of full immersion in an activity.” Glaveski asserts that “many of today’s organizations sabotage flow by setting counter-productive expectations on availability, responsiveness, and meeting attendance.” He cites research by Adobe which found that “employees spend an average of six hours per day on email” (at work and home). He also cites another study that found that “the average employee checks email 74 times a day” and “people touch their smartphones 2,617 times a day.” Glaveski also refers to organizational psychologist Adam Grant, who maintains,

    The more complex and creative jobs are, the less it makes sense to pay attention to hours at all.

    People waste a lot of time at work. I’d be willing to bet that in most jobs, people would get more done in six focused hours than eight unfocused hours.

  Glaveski concludes, “By cultivating a flow-friendly workplace and introducing a shorter workday, you’re setting the scene not only for higher productivity and better outcomes, but for more motivated and less-stressed employees, improved rates of employee acquisition and retention, and more time for all that fun stuff that goes on outside of office walls, otherwise known as life.”

  There are some data that people appeal to, to reinforce the things that Glaveski is saying.

  According to the latest report analyzing the world’s most (and least) productive countries by Expert Market, working longer hours doesn’t always translate into more productivity. The report “investigates levels of productivity in over 35 countries across the world, to gauge which nation has the most effective financial return during the least amount of working hours.” Productivity levels “are determined as GDP per capita data divided by the average number of hours worked in the nation.” Data comes from the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD).

  The countries among those with the highest annual GDP per capita generally are also the ones with the fewest working hours per week. They include Luxembourg, Norway, Switzerland, Denmark, Iceland, and the Netherlands. The opposite is true at the other end of the spectrum. Mexico and Costa Rica have the highest number of working hours per week and the lowest productivity.

  The Expert Market researcher concludes that “working longer hours is not the solution” to “productivity woes,” putting in overtime hours “to get more out of each day” could be doing “more harm than good,” and “many business skills ranging from communication to decision-making are worsened by the fatigue of working long hours.”

  So to be more productive, should the United States institute a shorter workday like the ones we find in Luxembourg, Norway, Switzerland, and Denmark? Should the United States institute a 6-hour workday as advocated by Steve Glaveski?

  The answer to both questions is, of course, no. But not because the 8-hour workday in the United States is ideal. There is a problem with the 8-hour workday in the United States, but it is not that the 8-hour workday is too long or too short. The problem with the 8-hour workday is that it is de facto mandated by the federal government.

  According to a U.S. Department of Labor, Wage and Hour Division (WHD) “Fact Sheet” about the overtime provisions of the FLSA,

    The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek. The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days.

    The Act applies on a workweek basis. An employee’s workweek is a fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods. It need not coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees. Averaging of hours over two or more weeks is not permitted. Normally, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned.

  Some salaried workers are eligible for overtime pay as well. Employees are not allowed to waive their right to overtime pay. It is because of the overtime pay requirement that the workweek for full-time employees is generally 40 hours throughout the United States.

  Nevertheless, thousands of workers every year allege that they are not paid the overtime they deserve. In Fiscal Year 2018, the WHD of the Department of Labor “recovered a record $304 million in wages owed to workers.” WHD investigations found, “on average, $1,150 for each employee due back wages” and “collected an average of $835,000 in back wages for workers per day.”

  So how long should the workday be? How long should the workweek be? How many hours should employees have to work before they are eligible for overtime pay?

  In a free society, those questions are matters between employers and employees.

  In a free society, an employee’s workday hours, workweek hours, and overtime pay, just like his hourly pay or annual salary, vacation pay, holiday pay, work schedule, sick leave, lunch time, break time, family leave, funeral leave, severance pay, and other fringe benefits would be determined solely by contract or agreement between employer and employee.

  In a free society, there would be no Fair Labor Standards Act.

  In a free society, there would be no Wage and Hour Division of the U.S. Department of Labor.

  In a free society, there would be no U.S. Department of Labor.

  In a free society, there would be no government Bureau of Labor Statistics.

  In a free society, there would be no minimum-wage laws.

  In a free society, there would be no government-imposed 40-hour workweek.

  In a free society, there would be no federal overtime-pay requirements.

  In a free society, some employers would never pay overtime.

  In a free society, some employers would pay overtime for less than 40 hours worked.

  In a free society, some employers would pay more than time and a half for overtime.

  In a free society, the government would not interfere in any way with the employer-employee relationship.

  When it comes to the matter of pay raises, extra pay for working weekends or nights, vacation pay, sick pay, holiday pay, severance pay, breaks and meal periods, performance evaluations, and double-time pay, the WHD says in “Questions and Answers” about the FLSA, “These benefits are a matter of agreement between the employer and the employee (or the employee’s representative).” And that is the way it should also be regarding the workday, the workweek, and overtime pay.

  About the author: Laurence M. Vance is a columnist and policy advisor for the Future of Freedom Foundation, an associated scholar of the Ludwig von Mises Institute, and a columnist, blogger, and book reviewer at He is the author of Gun Control and the Second Amendment, The War on Drugs Is a War on Freedom, and War, Empire and the Military: Essays on the Follies of War and U.S. Foreign Policy. His newest books are Free Trade or Protectionism? and The Free Society. Visit his website: Send him e-mail.

  This article was published by The Future of Freedom Foundation.

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