May 2, 2024


Investing and Stocks News

Sanders’s 4-Day Week Will Kill Flexible Jobs

Imagine a small business owner navigating the complexities of trying to be profitable, as most small businesses close in the first two years, and to provide a reasonable work-life balance for their employees. Enter the “Thirty-Two Hour Workweek Act,” proposed by Senator Bernie Sanders, which seeks to mandate a reduction from 40 to 32 hours at the same pay.

While well-intentioned, this bill simplifies the nuanced balance of modern work environments and threatens the flexibility crucial to businesses and workers.

The Act proposes to amend the Fair Labor Standards Act of 1938. Sanders suggests this change will fairly distribute productivity gains, decrease stress, and improve life quality. However, this sweeping reform would harm sectors where extended hours are essential due to operational demands or competitive pressures. It would also hurt the needs of workers and their families.

Current data from the Bureau of Labor Statistics show that the average workweek for full-time private sector employees is about 34 hours per week. This means employers and workers are already negotiating work arrangements that deviate from the traditional 40-hour workweek based on mutual needs and economic conditions. The BLS table below shows the different average weekly hours by major industry.

In sectors like healthcare or manufacturing, where longer shifts are common, limiting hours might reduce employees’ earnings if they are willing to work more. With their thin profit margins, small businesses could face severe challenges, potentially leading to job cuts, reduced services, or even closures, especially in rural or disadvantaged areas. Only leisure and hospitality and other services industries have average hours at or below 32 hours. Those are typically lower-skilled, lower-paid jobs, with many working part-time for various reasons. 

This flexibility in the private sector allows employers to manage labor costs effectively and workers to adjust their schedules for optimal work-life balance.

The proposed 32-hour workweek represents a significant opportunity cost, not only in economic terms but also in worker and employer liberty. America faces a worker shortage, with job openings exceeding the number of unemployed individuals. Reducing work hours could exacerbate this issue, particularly as many Americans juggle multiple or part-time jobs to make ends meet. This policy would add another layer of complexity and constraint in a market that requires more flexibility, not less.

This act would disproportionately affect small businesses, which typically operate with tighter profit margins and may find the increased labor costs unsustainable. These businesses might be forced to reduce their workforce, cut back services, or, worst cases, shut down altogether. The impact on employment could be profound, especially in rural or economically disadvantaged areas where small businesses are often major employers.

Compensatory flexibility, where businesses adjust other aspects of employment such as benefits or job duties to offset mandated costs, could mean that workers end up with less flexible schedules, reduced benefits, or increased job demands as employers strive to maintain profitability. Total earnings, including pay and benefits, are much higher than average weekly pay, so a government mandate like this would worsen the situation.

Looking globally, countries like France have long experimented with reduced work hours (the 35-hour workweek). The results have been mixed, with some reports suggesting a negligible impact on employment and others indicating increased stress for workers who have to compress the same amount of work into fewer hours. These mixed outcomes underscore the risks of applying such policies universally without considering industry-specific and cultural contexts.

These costs would further exacerbate the connection between people and work by many across the country. Work is also a moral issue, we bear responsibility to “be fruitful and multiply.” Moreover, work brings dignity, value, productivity, and the best path out of poverty. David Bahnsen’s latest book Full-Time Work and the Meaning of Life highlights these virtues of work and how government interventions in the labor market destroy many of its benefits.

Rather than imposing hour restrictions or other government mandates, politicians at the federal, state, and local levels, as appropriate, should remove government barriers to work and let the market work. 

These policies that would benefit workers include reducing or eliminating most occupational licenses, reducing or eliminating minimum wages, and ending the tax exclusion of employer-sponsored health insurance. These pro-growth policies would allow for more dynamic labor market movements, and spending less and cutting taxes would leave workers with more earnings to support flexible work choices. Also, many companies are already voluntarily innovating with remote work, flexible hours, and four-day work weeks without government mandates. These changes are often driven by the competitive need to attract and retain the best workers and the recognition that happy, well-balanced employees are more productive.

Improving work-life balance is commendable, but the “Thirty-Two Hour Workweek Act” would hinder rather than help. By championing policies that limit government intervention thereby supporting work flexibility and innovation, we can foster a labor market that thrives and adapts organically, benefiting all sectors of the economy and ensuring that both employers and workers enjoy true freedom in crafting their work lives.