Shorten the work week and lengthen vacations—it’ll create jobs!

Spend fewer hours at work, use your paid days off, and take longer vacations — and at the same time, help put other Americans back to work and make the economy better off.

Sounds counter-intuitive and fanciful, right? Here’s why the advice actually makes sense from an economist’s perspective: if current employees aren’t being overworked, employers would need to hire more people to spread the workload to get it all done.

“Less Work, More Leisure” is the very prescription offered by economist Dean Baker in a new piece in Democracy Journal:

The next Administration should make reducing work time a major focus. In addition to mandated paid sick days and paid family leave—proposals that have received some welcome attention thus far on the presidential campaign trail—policymakers should go much further and enact measures aimed at shortening workweeks and work years. Reducing our workweek and work years will lead to a whole host of benefits, including reduced stress and higher levels of employment.

beach-vacationModernizing governmental policies to better protect employee time would create a more inclusive prosperity, one where American workers are at the very least gaining more leisure time in return for their higher productivity on the job. That’s not how it currently works. The legal and financial incentives businesses face today instead act as “a big thumb on the scale pushing in the direction of longer work hours”—even as wages stagnate for most people except the very wealthy.

To bring this system into the 21st century, policymakers have a menu of options to consider, including the following:

  • Guarantee paid time off, sick days, and vacations as in other advanced nations.
  • Allow unemployment insurance to be put towards an employee’s lost paid time if a company shortens workweeks instead of laying off people.
  • Shift existing tax incentives to promote a shorter standard work week, down from 40 hours. Under a typical policy scenario, workers would expect their employers to compensate the same amount, which means they would have the same amount of money to spend in the economy as customers, shoppers, and clients themselves — but companies would have to hire more people to meet this demand and still do all the work.

As for a commonly raised concern about promoting more reasonable and equitable working hours, Baker has this following answer:

Critics may say that the government should not be telling employers how long people should work. But that ignores all the government policies that pushed in the direction of longer hours. This idea is really just an effort to level out the incentive structure. Others argue that workers can’t afford to work fewer hours. That is undoubtedly true in many cases, but nothing will prevent workers from seeking additional hours of employment, though admittedly some may find it difficult to make up for lost pay. Still, missing a few hours is better than being unemployed.

The best path to ensure that workers can secure a share of the gains in economic growth is a full-employment economy, like the one we saw in the late 1990s. Shortening work time is not just good, family-friendly policy—it might be the quickest path to full employment.

For more information, see “Less Work, More Leisure,” Democracy; “Shorter Workweeks, Longer Vacations,” The New York Times; “Why Americans should work less – the way Germans do,” The Guardian; and “Would Shortening the Workweek Stimulate the Economy?” PBS.