Labour wants us to have more bank holidays. There might be a good economic case for this.
My chart hints at the point. It shows that, across 35 OECD nations, there is a very strong negative correlation (of minus 0.77) between annual working hours and GDP per hour worked. Countries that work less are more productive. The French, for example, are far more productive than the UK even though they spend all their time eating cheese.
The same correlation exists over time. We work only around half as much now as we did in the 19th century, but we’re far more productive in those hours we do work.
Of course, correlation is not causality. A big reason for this relationship is that more productive societies use their greater wealth to take more leisure.
But this might not be the whole story. It could be that the imposition of shorter working hours can help to spur productivity. Parkinson’s law tells us this. It says that work expands so as to fill the time available for its completion. If a manager knows that he has a long week to fill an order, he’ll take that long week. A shorter week could sharpen his incentives to increase efficiency.
Also, if people are working longer they get tired and jaded and so less efficient. A recent study of call centre workers has found that productivity falls as working hours rise even for people working quite short hours. This corroborates evidence from a very different industry – British munitions workers (pdf) during World War I. John Pencavel writes:
Employees at work for a long time may experience fatigue or stress that not only reduces his or her productivity but also increases the probability of errors, accidents, and sickness that impose costs on the employer…Restrictions on working hours – those imposed by statute or those induced by setting penalty rates of pay for hours worked beyond a threshold or those embodied in collective bargaining agreements – may be viewed not as damaging restraints on management but as an enlightened form of improving workplace efficiency and welfare.
France’s imposition of a 35-hour working week, for example, did seem to lead to a boost to productivity.
Of course, more bank holidays alone won’t close the massive productivity gap between the UK and other countries. But they might be one of many policies that might help.
There is, equally, a very long tradition of denying this. Nassau Senior opposed the 19th century Factory Acts limiting working hours because he believed that profits were made in the last hour. He was plain wrong (pdf). Mightn’t his 21st century counterparts also be mistaken?
It depends upon your view of British bosses. If you think they’re clueless inflexible buffoons, then there’ll not be a boost to productivity, because they won’t be able to rejig working methods sufficiently. If, however, you think they are smart enough to justify their big wages and egos, you’ll be more confident. From this perspective, it’s the right who should be more welcoming of Labour’s proposals than the left.
So why aren’t they? It’s because to them, managerial control is a good thing in itself.
Herein, though, lies the radical question posed by Labour’s proposal: should the job of increasing productivity – which should be our top economic priority – be entrusted wholly to managers, or is there instead a case for intervention by the state and (in different respects) workers? Even if Labour is wrong, it is at least asking a good question.