UK economy just can’t afford McDonnell’s cynical call for a four-day working week
HOW can you tell when there might be a General Election in the offing? One straw in the wind is when the hard-Left mavericks running Her Majesty’s Opposition start handing out the vote-winning economic sweeties.
Naturally it doesn’t matter how little sense they make. Hence the hints from shadow chancellor John McDonnell that he finds the idea of a four-day week “really interesting”. Although it isn’t Labour party policy yet, McDonnell likes the idea so much he’s apparently had discussions with crossbench peer Lord Skidelsky, who put forward the idea of an inquiry into “the feasibility of a shorter working week”.
Skidelsky is renowned as the biographer of John Maynard Keynes, who nearly 90 years ago wrote that by now we’d be so wealthy we’d be working 15-hour weeks. The great economist was right about a lot of things but, as tired strap-hangers reading this everywhere will attest, he was completely wrong here. Although we do work slightly fewer hours now, some economists argue that Keynes, himself a member of a privileged set of intellectuals, underestimated the innate desire of humans to consume and compete.
McDonnell, in flirting with the idea of cutting the working week by a fifth, risks making a similar fundamental misjudgment. This autumn he complained that the UK “works the longest hours in Europe and yet we are less productive”. Aside from the factual inaccuracy (Greece works the longest hours), his overarching point was that France and Germany are much more productive, producing in four days what takes British workers a full five.
But assuming the avowed Marxist isn’t arguing for a 20% cut in wages, the idea you should just cut the UK working week without the attendant improvements in productivity is so barmy it beggars belief. It’s the economic equivalent of putting the cart before the horse. Otherwise how do you pay for it? The reason everybody is so obsessed with improving productivity in economics is because in the longer term that is how you fund those pay rises or shorter working weeks, the two sides of the same coin that Labour and the TUC are after.
Unfortunately, the figures this week show we are barely in the foothills of the change which could make McDonnell’s dream a reality. Output per hour dropped 0.4% in the three months to September, falling for the second time in three quarters. Hours worked grew by 1% while the economy grew by 0.6%, so it’s hard to see where this magical four-day week is going to come from. We’re working longer, to produce not quite as much extra.
We shouldn’t be too surprised at the shortfall when the latest GDP data shows business investment, a crucial component in raising productivity, falling more steeply too. That’s down to Brexit doubts. The Office for Budget Responsibility said recently that investment spending “has been three to four percentage points weaker than it otherwise would have been specifically as a result of the referendum”.
I ’d w a g e r the prospect of McDonnell, right, in 11 Downing Street has something to do with it as well. The shadow chancellor wants the Bank of England to target 3% productivity growth, but this i s n’ t in the gift of central bankers. As its chief economist Andy Haldane pointed out in the s u mme r, ra t e - setters help set the conditions for productivity growth by keeping
BEST to take McDonnell’s four-day week hints with the big pinch of salt they deserve. If Labour does scramble its way into power, any review would be kicked into touch or conclude that the “time wasn’t right”. It belongs in the same bucket as universal basic income; that’s the completely unaffordable idea of paying everybody a basic minimum income whether you go out to work or stay indoors watching daytime TV, in which McDonnell was also “interested”. Give the UK a few years of his economic diet and most of us will be so hard up we’ll be more like North Korea. In case you were wondering, they work six days a week there.
The idea you should cut the UK working week without productivity improvements is so barmy it beggars belief
wait around and put up with things.
How is your work-life balance?
Sometimes it is terrible. I have a 12-year-old daughter and sometimes I will take a break from work at four o’clock and pick her up from school, make sure she’s having her dinner and started homework and then I’ll start work again later because I have a global role. That means I can work with Japan early in the morning, or the US late at night.
Any tips?
I was a scientist and then I was a journalist and now I’m here. I’m mindful now that even though you study something you’ve got to be open to the opportunity. I don’t think things are as linear as they used to be, you can step across into different roles.