Planet Money - Nice work week, if you can get it

Episode Date: October 28, 2021

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This is Planet Money from NPR. About eight years ago, Natalie Nagel decided she wanted to try kind of a radical experiment. Well, at least for the tech industry. Natalie runs a software company called Wildbit out of Philadelphia, along with her husband. They make software for other companies like email automation and job boards. And sure, like any tech executive worth their salt, Natalie was interested in changing the world. But the thing she wanted to change was the way her industry seemed to put work above everything else. So she proposed something bold,

that the company ask its employees to work, drumroll please, a 40-hour work week. Yep, that was the bold move, folks. Five days a week, eight hours a day. We actually put that on our marketing pages, on our company pages, and in our job descriptions to say at Wild Beat, you only work 40 hours, because in our industry, it was pervasive that you would work 50, 60 hours. You know, people were excited about Google installing, you know, laundry and daycare service and all these things on campus because basically they didn't want you to leave. While these tech juggernauts were trying to make it easier for their employees to spend more and more of their lives at work,

Natalie thought Wildbit could offer her workers a better life. And it worked. Everybody got their jobs done in eight hours, no regular all-nighters required. And then in 2016, this book came out called Deep Work by Cal Newport. The main idea behind Deep Work? The human brain can only focus on a difficult task like computer programming for about four hours a day. Pretty much anything after that is just opening and closing tabs. Natalie was captivated by this idea of deep work, that if we could figure out how to actually harness the time when people are at their best, they could then skip out on the thumb-twiddling

and busy work that's become so common in many workplaces, and they could get back to the rest of their lives. And since her 40-hour-a-week experiment had succeeded, she thought, why not take the experiment even further? Go down to 32 hours a week. Give her workers a three-day weekend. the turtles are working 40 hours a day and the horse, I mean, like, come on, right? Like, that's an invented thing. And there's so much of how we operate at the expense of employees, frankly, by saying, well, it's just how it's done. But working long hours was so ingrained in the industry. People just didn't understand how you could be a successful tech startup and work less. She got questions from everywhere, including one of her friends, who was very high up in a major tech company. She's this very important executive in the organization, and her day consists of eight

one-hour meetings. But the conversation was all around, how on earth could I work a four-day workweek if most of my 40 hours is spent in meetings, and the only time I can actually get any work done is after hours? In order to get below the 40-hour work week, Natalie had to fundamentally rethink the work culture of the company, of how and where people actually got things done. While a lot of companies were extolling the virtues of water cooler chat and spontaneous interaction, Natalie started to see those things as distractions from the singular focus required for deep work. So she decided to do away with them one by one, starting with all those meetings that could have been an email. So we won't do a meeting just to give everybody an update on where we're at on a project. We'll just post that to our shared intranet or a project plan and just say, here's where I'm at. They got rid of Slack chat and encouraged their workers to have more focused brainstorming sessions. After thinking through

a lot of options, the company decided to see if they could get by on a Monday through Thursday work week, no more than eight hours a day. Now, Natalie may not have known it at the time, but she was taking her company into what many are calling the future of work, an economy where time off is just as important as making more and more money. Hello and welcome to Planet Money. I'm Sennar and Glenn. And I'm Alexi Horowitz-Ghazi. 40 hours a week, 8 hours a day. It seems as old as work itself. But actually, the 40-hour week is a pretty recent invention. And now dozens of companies and even whole countries are cutting it down to size, just as the pandemic has us

rethinking some of the most fundamental things about the way we work. Today on the show, how we got stuck with the eight-hour day and the 40-hour work week, and what it might take to change it. work week and what it might take to change it. There is nothing particularly ancient or mystical about the 40-hour work week. When you think about it, our idea of work itself is pretty new. If by work you mean getting paid to do a job for someone else. Now, for the overwhelming majority of human history, you worked to live. Hunter-gatherers didn't exactly clock out from hunting and gathering. And when you worked as a farmer, you were baling hay and weeding fields in the summer. But in the winter, there wasn't always a lot to do. Historian Benjamin Honeycutt says the explosion of working hours came with the start of the Industrial Revolution in the early 1800s.

All of a sudden, workers had bosses who expected them to work from dawn until dusk, often six days a week. And he says it was actually these grueling hours that led to the birth of the American labor movement. The first demand of organized labor was 10 hours, the 10-hour movement, Boston house painters. And they made a concerted effort and were successful to a certain extent to obtain the 10-hour day. Honeycutt says the push towards the 10-hour day for everyone else took most of the 19th century. The movement included work stoppages and strikes by skilled workers, an executive order shortening the workday for federal workers, and large-scale labor strikes like May Day. By the end of the century, a lot of different kinds of

companies had adopted a 10-hour day. It was an economy-wide process. It caused the working hours to reduce from dawn to dusk to 10, and then to 8. At the turn of the century, the 8-hour day comes in with a rush. This is around the time we see the birth of so-called scientific management, when people like Frederick Winslow Taylor started studying how to make work more efficient. You know, productivity reports, time motion studies. Business leaders were taking notice. And decided that people who were working 10 hours, surprise, surprise, got tired. The fatigue factor. got tired. The fatigue factor. After eight hours, the worker is not as productive, especially on a high-speed assembly line. Makes more mistakes and so forth. So it makes sense to reduce working hours from 10 or 12 to eight. Speaking of assembly lines, in the 1920s, the eight-hour workday

wins a surprising champion in the form of Henry Ford. Now, Henry Ford, who pioneered the assembly line, sees the eight-hour day as a way to increase efficiency and profitability. He realizes that if he switches to eight-hour shifts instead of two long shifts of 10 or 12 hours, he can run three shifts in a day. And that means he can run his factories around the clock. And just a few years after Henry Ford adopted the eight-hour day, there was a whole litter of copycats who thought their businesses might be improved by shortening the workweek. Several other industrial leaders said, we see your 40-hour workweek, and we raise you. By which we mean we'll lower you. So Kellogg's of, you know, Tony the Tiger

fame cut their hours to 30, which they kept in place for decades. Goodyear Tire dabbles with it, but workers were still essentially at the whim of their employers, and whatever schedule their bosses thought would make the company most profitable. That was until, what else, the Great Depression. You know, my grandmother, Alexi, used to say that the Great Depression changed everything. And in the case of working hours, well, she was definitely right. Eileen DeVault is a labor economist at Cornell. She says the American Federation of Labor, the umbrella organization for unions at the time, saw the Great Depression as an opening for a federal policy creating a shorter work week. The AFL suggested that the solution to the high levels of unemployment during the Depression was to

cut back the hours of labor without changing wages. That was their key. And they said that would spread the work among more people. And support for this idea went way beyond the unions. Mainstream politicians started pushing for shorter hours, and a bill mandating a 30-hour workweek actually passed the Senate in 1933, at a time when both houses of Congress and the president were all in the same party. We were so close to a national 30-hour workweek. But President Franklin Roosevelt was pushing for a lot of other things that would make work safer and fairer and address the enormous unemployment crisis. Now, labor unions did not get the 30-hour week, but Roosevelt delivered on a much bigger promise, the Fair Labor Standards Act of 1938. Except perhaps for the Social Security Act,

it is the most far-reaching program, the most far-sighted program for the benefit of workers that has ever been adopted here or in any other country. This is probably the biggest victory in the history of American organized labor. Alexei, I will let you tell the folks what is in this important piece of legislation. Okay, this thing's got some bangers. It established the minimum wage, gave us the weekend, though not the Canadian pop star. It bolstered child employment standards, and it required employers to pay overtime to employees who worked more than 44 hours a week.

And then two years later, the law was amended. Employers would have to pay overtime over 40 hours. That right there, that's where we get eight hours a day, five days a week. The 40-hour workweek becomes the law of the land. But as Benjamin Honeycutt says, after a century of progressively shorter and shorter work hours. Nobody thought things would get stuck at 40 hours. The assumption was that the work week would just keep getting shorter. No one expected the process to end.

What the hell happened? Yeah, what the hell happened? I'm not sure exactly. I'll answer that question. It's a damn good question, though. So why are we still working 40 hours a week or in some cases, many, many more? That's coming up after the break. So to try to get to the bottom of the mystery of why we're still working 40 hours a week after 80 years, we called up Dan Hammermesh. He's a labor economist at Barnard College. Dan specializes in, among other things, what he calls the most precious of economic resources, time.

You may not think that time has a cost, but it does. Because whatever you're doing right now, you could be doing something else. You've made the choice to spend this hour talking to me. You're doing it presumably because you get paid for the pleasure of my company, okay? Dan says that some of the leading economic thinkers of the last century expected the gradual shortening of the workweek would just keep going. None other than John Maynard Keynes, one of the most important figures in economics and imaginary friend of the show, famously predicted that we would all be working a 15-hour work week by 2030. Now, the man's long since dead. I don't want to make fun of the dead people, but unless something happens in nine years or so, he was really wrong. Dan says your buddy Keynes'

prediction that we'd all be working dramatically less appears to have been particularly wrong when it comes to the U.S. The U.S. has diverged from the world's other wealthy economies since the late 1970s when it comes to how many hours employees work each year. And how much of an outlier are we in terms of our workaholism? Well, if you take hours per year, at this point, we're probably 1,800 and some hours per worker per year. The next country, which is the UK, would be about 50 or 60 hours less. Places like France and Germany would be hundreds of hours less. Now, Dan points out workers in Europe are generally still working 40-hour weeks. But over the course of the year,

employees end up getting more time off overall because they have a lot more paid vacation. And at the end of the day, Dan says the difference between working hours in the U.S. and other wealthy nations is political will. The democracies in Western and Northern Europe have given workers more paid time off, such as sick leave and parental leave, as well as creating more new holidays. But in the U.S., things have been much slower to change. What has changed? In one word, nothing, darn it. That's exactly the problem. Nothing has changed. I mean, look, we just created a new holiday this past year, the Juneteenth holiday, which we're celebrating for the first time next June 20th, by the way. Are people going to get off of work on that?

I don't know. But putting in a holiday every 20 years extra, which half the people don't take off work for anyway, I don't think is the issue. I mean, what we need is some kind of way of cutting through the Gordian knot of employers' unwillingness to give people more work time off. I am definitely taking Juneteenth off and I dare you not to pay me. Dan argues that the vast majority of companies might be hesitant to cut employee hours because it could put them at a disadvantage with their competitors. And Dan says they're afraid of how it could affect the bottom line. I don't see how if people work less, we're going to keep total productivity as high as it currently is. In other words, doing that has a cost. That cost might come in the form of decreased productivity. So a company might have to serve

fewer customers or make fewer widgets. Or the cost could come from having to hire more people to keep call centers open and assembly lines humming like before. Or the cost could come from having to hire more people to keep call centers open and assembly lines humming like before. And those costs could be even steeper in a tight labor market like we're seeing right now. Of course, companies can save money when they cut hours. In manufacturing, for instance, less time on the factory floor would mean fewer expensive workplace injuries, less burnout, and less turnover. And we know constantly replacing your workers can be expensive. These are some of the tradeoffs that companies are having to make as they experiment with a shorter week. Basecamp, Shopify, even Shake Shack have all tried out versions recently.

But how permanent or widespread those experiments will become is still up in the air. In the case of Natalie Nagel's company, Wildbit, she says they've thrived working a four-day week, and she was able to keep paying her employees what they made during five days a week. Though she did have to hire a few more customer service folks because most of their clients were still stuck on the nine-to-five grind. Natalie does admit the company probably hasn't grown as rapidly or produced as many new products as they might have. And she says that's probably made it less attractive to some of the more traditionally ambitious, you could say work-obsessed, potential new hires from the tech world.

I am positive that there are people who do not apply to come work for us because of our culture, because we are not a hustle, you know, really scale your career quickly kind of place. But Natalie says, all these trade-offs are part of a broader decision she's made to put her company's long-term sustainability above short-term growth. And so far it's working. The company has been growing steadily. Her employees generally love having an extra day each week, you know,

to have a life, run errands, take care of family, try out a hobby. And Wildbit has become kind of a poster child for companies who are rethinking work. Would you describe yourself as like an evangelist of the shorter work week? Or how do you think about what you do? You know, I think I'm an evangelist of changing the way we perceive work generally, right? Like, I think the thing that I love so much about four-day work weeks is it's a tangible change in behavior that feels like, oh, I'm just going to lob a day off. But to do it well, we actually have to change so much about the way we work. But labor economist Dan Hammermesch says that what works at a small software company won't necessarily work for a huge swath of workers in industries like manufacturing, food service, healthcare.

And that means that a fragmented movement to spread the four-day workweek one company at a time isn't likely to move the needle on the U.S. economy as a whole. Unless, of course, the government sets a new standard for working hours, like it did during the Great Depression. I just don't think it's going to spread very widely unless it's mandated. And thus, again, we need this kind of change through policy, although I'm despairing of the democratic institutions being able to do that in this country. This is very depressing. I'm very depressed. Why are you depressed? Why is this depressing?

I'm depressed. I would like the world to be better, okay? I mean, I spent all my life, or my adult life, 55 years now doing economics, partly with the aim of thinking of things that might make people, A, understand the world better, and B, do things to make the world better. And I just don't see very many changes happening along these dimensions that, in my view, would make the world better. So that's why I'm depressed, okay? Oh, poor Dan. Dan points out that the last time the United States government was able to pass major legislation about how we all work was during the largest economic crisis the world had ever seen.

But right now, of course, we find ourselves in another moment of unprecedented economic upheaval. And it seems that a lot of the old rules about how we work are once again up for negotiation. Before the pandemic, for example, employers were real stingy about remote work. Now some big companies might be working from home forever. There's also the so-called Great Resignation. A record number of Americans, millions every month, are quitting their jobs because of things like burnout and low wages and long hours. And union membership is rising for the first time in decades, and labor is beginning to flex its muscle. At least 19 strikes were started in October. People have

been calling it striketober. And it's becoming clear that a lot of how we work just isn't working. Now, it's important to remember the last time the U.S. came together to standardize the work week, it came with this whole smorgasbord of other changes to work life. A minimum wage, child labor laws, overtime, safety protection. Shortening work hours for the country would be a huge undertaking. And to pull it off, we'd also likely need fundamental changes to health care, child care'd also likely need fundamental changes to healthcare, childcare, family leave. Because the work week, eight hours a day, five days a week, and the weekend, is kind of the frame we touched on in today's show

and more. This week's newsletter is about something we're calling skimflation, a reason inflation is worse than the government says it is. You can subscribe at npr.org slash planetmoneynewsletter. That's npr.org slash planetmoneynewsletter. You can also email us at planetmoneyatnpr.org and find us on Facebook, Twitter, Instagram, TikTok, at Planet Money. Today's episode was produced by Emma Peasley with help from Andrea Gutierrez. Today's episode was produced by Emma Peasley with help from Andrea Gutierrez. It was mastered by Isaac Rodriguez and edited by Sarah Sarazin.

Alex Goldmark is our supervising producer, and Louise Story and Ebony Reed are our consulting senior editors. Special thanks to Nellie Brown, Alex Pang, and Brian Kerr. I'm Sonari Glinton. And I'm Alexi Horowitz-Ghazi. This is NPR. Thanks for listening. And a special thanks to our funder, the Alfred P. Sloan Foundation, for helping to support this podcast.