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Longer working hours do not mean higher profits, say economists

The Guardian logo The Guardian 4 days ago Richard Partington Economics correspondent
The Foxconn factory in China has installed nets to catch falling workers attempting to commit suicide. © Bloomberg via Getty Images The Foxconn factory in China has installed nets to catch falling workers attempting to commit suicide.

In the backlash against the “996” working schedule, China’s tech workers say their bosses have lost valuable productivity gains that could have been generated with a shorter working week and fewer hours.

Economists would tend to agree with their complaints, made on social media, that working from 9am to 9pm, six days a week is unwise. Longer working hours do not automatically mean higher company profits and economic growth, and could even pave the way for serious problems ahead.

Beyond the issues around fairness, excessive working hours raise the chances that mistake are made through tiredness and exhaustion. Campaigns have sprung up in the UK and US to push for shorter working hours, arguing that productivity can benefit and so can economic growth.

Shadow chancellor John McDonnell © Getty Shadow chancellor John McDonnell

In the UK, John McDonnell, the shadow chancellor, is interested in a four-day week, while some companies have looked at reducing hours.

Overworking employees can have business costs. It is the main reason for sickness in the UK and responsible for a quarter of sick days. Suicides at Foxconn, the Chinese manufacturer of Apple products, have led the company to install nets to catch falling bodies at its factory in Shenzhen, near Hong Kong.

There are examples from history that fewer working hours can boost productivity. Henry Ford, the US industrialist, adopted a five-day 40-hour week for automotive workers at his factories, boosting profits in the process. Kellogg’s in the 1930s used shorter hours to reduce accidents by 41%.

© Getty

Trade unions in Britain campaigned to win a two-day weekend and limits on long hours, while the British economist John Maynard Keynes predicted in the 1930s that technological advances would enable workers by 2030 to work 15 hours per week, as productivity increased economic output.

In the past century, average working time has gradually reduced in major economies, but the trend has started to stall, despite gains in productivity being made.

© Getty

Will Stronge, co-founder of the thinktank Autonomy, which has published a report advocating a shorter working week, said it was not surprising that the issues in China were in the tech sector. US firms also promote cultures of longer working hours. City banks and law firms have similar issues.

“This is part of the ideology, and the dominant narrative that entrepreneurialism and long working hours come hand in hand. It’s sometimes presented as a carrot by a boss for workers as ‘This is how I got here’,” Stronge said.

“Actually, it’s not the case. It doesn’t make business sense to work workers to the bone.”

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