Is Germany financially capable of implementing a 4-day workweek?
In 2021, the average number of hours worked per employed person in Germany was 1,349, according to the most recent data from the Organization for Economic Cooperation and Development (OECD). The OECD average was 1,716 hours, while Greeks worked 1,872 hours annually.
Despite Germans putting in fewer hours a year, the country’s powerful metalworkers’ union IG Metall recently came up with a proposal pushing for an even shorter workweek for its members: namely, four days.
Assuming fully compensated wages, any worker would support such a proposal. But in times of a slowing German economy and an acute shortage of skilled workers, shouldn’t Germans be working more rather than less?
The OECD has acknowledged that its data is biased and cannot be directly compared due to variations in reporting standards and time references. Additionally, the report highlights that perceptions of working hours may differ among different countries.
Enzo Weber, a labor market specialist at the Institute of Employment Research (IAB), explains that the OECD’s data is typically derived from surveys conducted among the general public. Consequently, the outcomes heavily rely on the specific questions asked and their sequence.
“I cannot reword”
Weber pointed out that German women have a much higher rate of participation in the labor force compared to other countries. However, since approximately half of these women work part-time, the average annual working hours per individual are reduced. Weber clarified that this does not imply Germans work less; on the contrary, more work is being accomplished because these women are not even accounted for in the statistics.
Productivity is what matters
The number of hours people spend at work cannot be viewed in isolation. The question is what are they doing and how productive are they? German workers do much better in the productivity rankings, Weber said, even though the “glory days” of Germany as a productivity powerhouse are long gone.
He stated that productivity is currently declining, but this is not due to German workers being lazier compared to last year.
Calculating productivity is a complex exercise, but basically divides output by the hours worked. Weber attributes the present decline to the energy crisis. Despite the higher costs, German companies are keeping their workforces fully employed to avoid future shortages. As a result, working hours in total remain stable while output shrinks due to higher energy costs.
Germany’s significant low-wage sector, characterized by relatively low productivity, contributes to the decline in overall productivity in the country.
Can a 4-day workweek increase productivity?
An important issue being discussed currently is whether a 4-day workweek can enhance productivity during a shortage of skilled workers. Supporters claim that reducing work hours could boost worker motivation and lead to increased productivity. They also argue that this change could attract individuals who are unwilling to work five days a week, thereby increasing the pool of skilled workers.
Since 2019, the non-profit organization 4 Day Week Global (4DWG) has been conducting pilot programs in various countries including the UK, South Africa, Australia, Ireland, and the United States. Over 500 companies have taken part in these programs, as reported by the NGO based in New Zealand. The outcomes appear to be promising, aligning with expectations for a favorable result.
The response from German workers towards the proposal of a 4-day workweek is varied, as revealed by a survey conducted by the Hans-Böckler Foundation, which is associated with Germany’s trade unions.
Approximately 73% of the workers who were surveyed expressed their desire for a 4-day workweek, as long as their salary remains unchanged. A small portion of 8% would be willing to accept a decrease in pay, whereas 17% outright rejected the idea of reduced working hours.
A program for a 4-day workweek was introduced in Germany on September 21, allowing companies to apply for a 6-month trial period. Intreprenör, a German consulting agency, is partnering with 4DWG to administer the program.
Enzo Weber suggests that the pilot’s design already reveals the main issue with these projects. According to him, only companies that have a favorable view of a shorter workweek would take part, leaving the majority of businesses unrepresented.
Weber stated that the pilot project aims to not only decrease working hours but also make changes to processes and organizational structures in the companies involved. Therefore, any potential increase in productivity may not be directly attributed to the shorter work week, according to Weber.
The IAB labor market expert also questions the idea of positive results. Reducing the workweek by one day would likely increase employees’ daily workload while reducing communication and teamwork. “Companies usually don’t feel the consequences immediately, but rather in the medium term,” said Weber. He pointed to the 6-month project design, which was too short.
Holger Schäfer believes that implementing a 4-day workweek would not be beneficial for the economy as a whole. According to the economist from the Institute of the German Economy (IW Cologne), while it may allow companies to attract workers from rival firms, it would ultimately lead to a shortage of working hours if all companies adopt this approach.
Schäfer contended that there is no proof to support the notion that decreasing working hours would lead to a substantial rise in productivity. “Decreasing the workweek from five to four days means a 20% decrease in working hours. To make up for the subsequent decrease in production, a 25% increase in productivity would be necessary, which is not feasible.”
‘X-Day Work Week’
However, Jörg Dittrich, the president of the German Confederation of Skilled Crafts and Small Businesses (ZDH), suggests that implementing a 4-day work week in certain sectors of the economy could be a logical decision.
Craft businesses could make themselves more attractive to qualified workers, he told DW. However, he admitted that not all crafts may benefit. He rejected broad-based nationwide regulation saying it would only mean additional bureaucracy for companies.
Enzo Weber also opposes the idea of a legal guarantee and instead promotes personalized solutions through his X-Day Work Week proposal. This plan has gained support from small and medium-sized businesses in Germany. The sector’s lobby organization, BVMW, strongly opposes any government intervention that suggests reducing working hours while maintaining full pay, and instead advocates for customized solutions at the company level.
IG Metal, the German metalworkers’ union, intends to proceed with its 4-day work plan during the upcoming wage discussions for steel workers, despite facing criticism. Union leader Knut Giesler confirmed that this proposal includes full wage compensation.
This article was originally written in German.