Finland’s new prime minister has proposed moving to a 24 hour work week. I think this is great news and makes a lot of sense for a better work life balance. If the standard work week moved to only 24 hours, then anyone who worked beyond that would be much more likely to be getting ahead. For a real go getter, you could potentially work 2 full time jobs and still have more free time then your grandparents had in their working careers.
On average Americans in 2017 worked 1,781 hours per year. In 1950 we worked 1,908 hours, representing only a 6.7% reduction over 67 years. In 1900 we worked around 3,000 hours per year. Total weekly hours had been falling since the mid 1800s, with a 36% decrease in 50 years from 1900 to 1950, then we pretty much just froze, what happened?
Between 1950 and today productivity has increased over 400%. “Between 1950 and 2007 official price inflation was measured to 861 percent. President Truman, in his 1951 message to Congress, predicted correctly that his military buildup “will cause intense and mounting inflationary pressures.” Using the data provided by the United State Bureau of Labor Statistics, Erik Rauch has estimated productivity to have increased by nearly 400%. According to Rauch, “if productivity means anything at all, a worker should be able to earn the same standard of living as a 1950 worker in only 11 hours per week.”
Yet here we are, the most productive workforce in human history and we feel a need to work 40 hours a week every week, with the vast majority of our efforts not being in entrepreneurial pursuits.
The History Of The 40 Hour Work Week:
The 40 hour work week came about in 1926 when Ford cut 1 day from their 8 hours a day 6 days a week schedule, at the same time demonstrating that their employees were actually more productive working 40 hours than working 48 hours. The automotive industry and many other industries followed suit. In 1938 Congress required employers to pay overtime pay if over 44 hours a week was worked by the employee and in 1940 they changed this to 40 hours. This made the 40 hour work week standard just 14 years after it came into being.
Almost 100 years since Ford set the standard America has been obsessed with the 40 hour work week, despite numerous studies showing that people are more productive working fewer hours. It has endured despite the way we work dramatically changing over the past 100 years. It has endured despite productivity increasing several hundred fold. The 40 hour work week has endured not because it is the best system, it has endured by default. We allowed it to become so commonplace that we can’t imagine another way. It is almost heretical to suggest we go to a shorter work week.
What’s hidden in this data is that the percent of women working has changed dramatically since 1926. In 1920 21% of the workforce was women, in 2019 that figure has grown to 50%, and just this month it was reported that women now exceed men in the United States work force. This demonstrates the transition from a single earner household to a dual earner household, despite productivity greatly increasing and a relatively unchanged hours worked per week. With a dual earner household, a couple is now working 3,562 hours per week compared to 1900 when the husband would have been working 60 hours per week (3,000 hours per year) with his wife not working. We have been going backwards.
To me it is extremely interesting what our country decides we are OK with changing and what we aren’t. Even when something is obviously not the best option we go with it because “we have always done it this way.” (I’m also thankful that at my local plant this phrase has become a “trigger word” to challenge anytime it is stated.) We stick with daylight savings time even though it is not necessary (and perhaps never was.) We stick with Imperial measurement even though the rest of the world is on the metric system. And of course we stick with the 40 hour work week which came to be a century ago. It’s also interesting to note that that major reduction in the American work week took only 14 years to go from an experiment at 1 company to the national standard.
Since the Mid 1800s average work hours have decreased dramatically and that decrease has leveled off since 1940. We look back and think about how much better we have it than our great great grandparents who toiled for 16 hour days 6 to 7 days a week year in and year out. This is absolutely true, however work in the mid 1800s and early 20th century was not the norm for most of human history and was a relatively brief period of work at this insane schedule. Prior to the industrial revolution work was mostly agrarian. Even farmers who worked dawn to dusk would have worked far less than the 3,500 to 5,000 hours that factory workers were putting in during the height of the industrial revolution. Work hours increased substantially in the early 1800s to peak in the mid 1800s and decline steadily, until they froze in 1940.
I recently read this study on moving to a 21 hour work week, which does a great job of going into detail on this issue: 21 Hours: Why a shorter workweek can help us all to flourish in the 21st century
Moving Forward To A 24 Hour Work Week:
Propose Changes at Your Work: From many suggestions the plant I work at transitioned from a 5 8s work week to a 4 10s work week a couple years back. Although this kept the same amount of total scheduled hours, I think overall it has reduced total working hours because when working a 10 hour shift it is harder for individuals to justify to themselves staying late or coming in early to get a jump start on their work; and there is one less day to do it on. It was routine for many people to show up an hour early and stay an hour late. Effectively they were working 50 hour weeks and only getting paid for 40.
With the new schedule the general start time is now 6 am, and there are far fewer people who want to arrive earlier than 6 o clock to get a jump on work. With a scheduled end time of 4 o clock after working 10 straight hours most people don’t feel like putting in any more work. It would also be crazy to go into work on an extra day. Having 3 full days off in a row every week is a step in the right direction. It just doesn’t solve the problem with our abstract arbitrary 40 hour work week. From my experience the last 2 to 3 hours of these 10 hour shifts is not the most productive.
I truly believe a 4 6’s schedule is much, much better for work life balance, but to implement it would be difficult. First pay rates for hourly workers would have to jump to make up for the lost wages of fewer hours, and employers would then have to buy in that their employees would be equally productive with the hours they are there. The employers payroll costs would stay the same, but some employers would feel like they would be losing 40% on payroll because people are working 40% fewer hours. Like with Ford’s experiment most employers will find that productivity will not fall off anywhere near the percent of hour reductions. They will also find that many of their employee costs are fixed costs that don’t vary with the hours worked, such as health insurance and other benefits.
For a company working 5 10s switching to a 3 or 4 day work schedule will also greatly reduce office costs of HVAC, electric, etc. Companies working a 3 8s schedule could even rent out their facilities 3 days a week to another company. Switching to a 24 hour work week is absolutely NOT a losing proposition for employers. For the early adopters of such a schedule their turnover rate will dramatically drop. If 1 employer offers a 24 hour work week while all other options are still at 40 hours a week, do you think the employees are going anywhere? Do you think this company will be able to attract and retain top talent? The more people advocate for such a schedule the more likely it is to actually happen.
Design Your Own 24 Hour Work Week: Growing up the puritan work ethic was highly emphasized in my family. My parents came from an economically depressed area, overcame poverty as young parents, and built enough wealth to retire at 55. My parents both worked corporate jobs and it was not uncommon for them to both work over 50 hours a week. There were a few stretches where they were both most likely averaging 60 hours a week. On weekends my dad often did extra work early in the mornings either at the office or from home. We would typically have some sort of project around the house that needed to be worked on as well. For my entire time growing up my parents were both employed full time at corporate jobs. My mom also went to school at night, taking 1 to 2 classes a semester for several years to earn her bachelors degree. My parent’s worked extra hours to change their standard of living and to change the direction of our family tree. While researching this article I came across this article “It’s Time To Rethink The 40 Hour Workweek” It had a quote that felt very fitting to me:
If you’re a millennial, like me, your parents worked long and hard 40+ hour work weeks in order to make sure you could do something better with your life.
A generation later, we’re supposed to continue this same way of labor?
People believed that our generation was going to change the world. We’re supposed to be challenging these same structures and entities that took away the youth of our parents.
Instead, we fall into the same trap. “Debt is the American way”, is a joke told in my family. We get caught up in being materialistic and enter the workforce to buy things, not to achieve financial freedom or any sort of freedom for that matter.
I certainly believe that hard work, and working more is the key to starting to build wealth and achieve financial freedom, but it doesn’t have to be forever, or even for a large chunk of our working lives. I often advocate that people work and earn 20% more to increase their savings by 500%. As an example, if Joe earns $50,000 a year and decides to work 8 hours of extra work at his pay scale with no premium for overtime pay he will earn an additional $10,000 a year. If he was saving the national average of around 5% of his pay he was saving $2,500. Now if he saves all of his extra money he will be saving $12,500, 5 times what he originally started with. Over the long term Joe should also work on reducing expenses and increasing his hourly rate so that he doesn’t have to work the extra hours forever, it is only temporary. Saving $2,500 a year for 40 years at an 8% return would yield $726,000 at retirement. Saving $12,500 a year for 40 years with an 8% return will yield $3,637,000!
For the first part of my working life I was working as much as I could for minimum wage. Within a year of graduating high school I had moved in with my girlfriend and her son and I was earning a bit over $6 an hour. When I started working nuclear plant outages I often worked 72 hours a week, but then had several weeks without any work. I supplemented this by going to college in the off season (generally the summer) and earned my bachelors degree in 2011. Because my jobs are contract based and I work for 4 different employers I had the ability to reduce my hours while still building my career.
In 2017 I stopped working my winter job which accounted for 12% of our income and 21% of our work hours. This was the lowest paid job I had and the most inconvenient. I was on night shift for roughly 12 weeks removing snow. Night shift with young kids really sucks for those of you who haven’t experienced it. In 2019 Mrs. C. quit her job which accounted for 14% of our total income and 41% of our total work hours.
I have never worked 2,000 hours in a year. My lowest year was 767 hours, my highest barely exceeded the average hours worked at 1,844. (I track this stuff in a spreadsheet because I’m that much of a nerd.) These days I’m hitting 1,400 hours with half the year off. I plan to transition down to an average of 1,000 hours starting in 2022. This will put Mrs. C. and I working 1/4 of a normal wage slave couple, while still saving 30%+ of our income. With a savings rate 6X higher than normal and work 1/4 of normal our economic efficiency is 24 times that of the average couple who works 4,000 hours a year and saves 5% of their income.
Currently Mrs. C. and I are investing in rental properties. We buy houses that need extensive rehab and during the rehab we are working 24 hour weeks, which is the exact opposite of what you see on all the flipping shows on TV. The properties we buy have such low carrying costs that taking an extra month to rehab the house is not a problem. Typically we drop the kids off at school at 7:30, work from 8 to 230 with a roughly 45 minute break for lunch/trip to the hardware store, and then pick up the kids from school. Most weeks we are working M – Th and on Friday we take care of anything else going on in our lives that needs attending to. To be clear this is only for my off season while I am not working my normal W2 job. This is not a permanent schedule and will typically only exist for about 2 to 3 months a year to cover our current pace of 2 rental properties per year.
Engineer Your Life: The only way to bring about cultural change is to participate in it. Engineer your life to not need,nor accept the wage slave mentality of a 2 earner 40+ hour a week household. You have to make your own 24 hour work week (or less if desired!) It may take time to do so and a few years of working far more than 40 hour weeks. We don’t need the government to propose a shorter work week, we need to design a shorter work week for ourselves. Live humbly, save your money, build assets, start multiple streams of income and find ways to allow either both partners to cut back hours or allow one to completely leave the workforce. It’s OK to work 40 hours a week or more to get ahead. It is not OK to work 40 hours a week to just tread water and get by.
There have been so many friends and coworkers of mine who have been critical of the extreme savings I engage in because I’m saving for a retirement that is so far in the future and I could die tomorrow. The odds in this scenario are of course not even. It is far more likely to become a poor senior citizen than it is to die at 34 in excellent health. The point being that in pursuing Financial Independence you have the ability to buy yourself options along the way, and we have cashed in on that by reducing our work hours over time. Because we have saved so heavily for the future we have been able to engineer our lives so that we combined are working 1400 hours a year, over a decade before he hit our early retirement target of 45.
The 15 Hour Work Week:
Taking this one step further, going to a 15 hour work week would be truly impressive. 90 years ago economist John Maynard Keynes postulated that future generations in 100 years will work just 15 hours a week and our primary problem would be figuring out how to occupy our time.
“For the first time since his creation man will be faced with his real, his permanent problem, how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well…Yet there is no country and no people, I think, who can look forward to the age of leisure and of abundance without a dread. For we have been trained too long to strive and not to enjoy.
“Now it is true that the needs of human beings may seem to be insatiable. But they fall into two classes – those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel superior to, our fellows. Needs of the second class, those which satisfy the desire for superiority, may indeed be insatiable; for the higher the general level, the higher still are they. But this is not so true of the absolute needs – a point may soon be reached, much sooner perhaps than we are all of us aware of, when these needs are satisfied in the sense that we prefer to devote our further energies to non-economic purposes.
Now for my conclusion, which you will find, I think, to become more and more startling to the imagination the longer you think about it.
I draw the conclusion that, assuming no important wars and no important increase in population, the economic problem may be solved, or be at least within sight of solution, within a hundred years. This means that the economic problem is not – if we look into the future – the permanent problem of the human race.
Why, you may ask, is this so startling? It is startling because – if, instead of looking into the future, we look into the past – we find that the economic problem, the struggle for subsistence, always has been hitherto the primary, most pressing problem of the human race – not only of the human race, but of the whole of the biological kingdom from the beginnings of life in its most primitive forms.”
What To Do With The Time Bought By A 24 Hour Work Week:
With more time, and more time in useful blocks, people will be much more effective overall. Reducing work hours from 40 to 24 (or less) would create a massive change in how Americans live. We would have more time for family and recreation sure, but we would also have more time for starting our own businesses, volunteering, and of course planning and implementation to make our lives more efficient.
We would unlock the true potential of our population and have much higher economic gains as a society. How? Because people will actually pursue their real interests. Look around the room of the people you work with. How many are inspired? How many are truly in love with what they are doing? How many are maximizing their contribution to society through their job? My guess is not many if any at all. For most people their job is only worked as a means for income. If their income was secure working 15 to 25 hours per week the additional 16 hours to 25 hours per week would often be used to pursue business and inventive pursuits. People would spend more of their creative energy solving problems that they identify instead of lining up to hit a punch clock.
People would spend more time being more present mothers and fathers. We would have more time to help each other, which also greatly reduces the monetary resources needed to provide aid to others. We would have more time to take care of ourselves and would be much healthier overall, both mentally and physically. For a country that currently spends $3.6 Trillion a year on healthcare this is a big deal. As a whole our society, our people, and even our wealth would improve greatly with a 24 hour work week.
What do you think about a 24 hour work week (or shorter)? How many hours do you work per year? This is a much brighter future I’m painting here than in my article on the coming AI revolution.