The inevitable shrinkage of the economy as a result of Covid-19 with mass redundancies and the disappearance of so many jobs, will provide a level of unemployment unseen in modern times. Is there a case for adopting a different and more inclusive solution?

Certainly the vast Government investment in furlough and eat out subsidies may be successful in delaying the worst aspects of the anticipated depression, but only as a short-term expedient. However a more dramatic and possibly ethical solution could be to accommodate the reduction in workforce need, by encouraging employers not to slash jobs but to look at rationing working hours, to encourage job sharing and keep as many people in work as possible. This would protect livelihoods and preserve skills and experience waiting for the V or U recovery, if and when it happens.

The idea of encouraging all to work less precedes the ‘Work Life Balance ‘ culture and the social contract agenda from the EU, which gave us the EU Working Time Directive and the maximum working hours of 48 per week.

A century ago leading economist John Maynard Keynes in ‘Economic Possibilities for our Grandchildren’ argued the case for a 15 hour working week, suggesting that the future would be a world of greater leisure – when people would spend less time working and more time enjoying life, concentrating on ‘the art of life itself’ – reading, painting, dancing, or in today’s terms on social media and boxed sets.

Keynes suggested that by 2030 the reduction in work would follow from technological advancement and increased productivity. In fact this has not come to pass and in effect people have been working harder and longer until subject to the working hours legal restraints.

The idea of reduction of working hours was taken up by Franklin Roosevelt in 1933 during the Great Depression. He directed that companies reduce the working week in order to spread existing jobs to create employment opportunities. This included paying higher hourly rates for the lower number of hours. It is estimated by economists that the President’s Re-Employment created 2.5 million new jobs. His approach to the country was to sign the covenant ‘in the name of patriotism and humanity’. It is suggested that this led some companies to cut output and increase prices.

To adopt such a policy now may be seen as politically perverse and would cost £2.6 billion between November this year and March next year. However this is significantly less than the £10 billion a month which the government was spending at the beginning of the coronavirus job retention scheme. The Institute for Public Policy Research suggests that any short-term working scheme should include incentives for employers to share jobs and use part-time working. It has long been recognised as a strategy for reasonable and responsible employers seeking to avoid or limit redundancies, to seek volunteers and to cut over-time as well as exploring with the workforce measures to spread available work to protect the jobs of as many as possible.

Therefore the Keynes prophesy of a shorter working week may come to fruition post Covid not quite to 15 hours per week and not quite as he envisaged. Should there be a persuasive or statutory imposition of the part-time working? It would also have the benefit of encouraging hiring opportunities particularly of young people struggling to find work and preventing long term unemployment. Employers may realise that some workers produce more in shorter hours. Inevitably the impact would be sector specific with challenges to productivity and competitiveness and an assortment of undesired consequences.

Barry Speker – Director NIBE