Introduction to the Discussion on Reduced Working Hours
The International Labour Organization (ILO) is leading a series of international dialogues on reducing working hours and organizing work time, as countries like Mexico consider implementing similar processes. The ILO provides insights based on previous experiences.
Historical Context and Importance of Working Hours
The ILO highlighted that working hours are a crucial aspect of decent work, directly affecting workers’ well-being and business productivity. The organization’s first convention in 1911 set a maximum of 8 hours per day and 48 hours per week.
High-income countries, mainly in Europe, Oceania, and North America, have generally decreased these maximums to 40 hours per week. However, several Latin American countries still adhere to the 48-hour weekly standard established in the early to mid-20th century. The region has recently reignited this debate, with countries like Colombia and Chile implementing reduction laws, while Mexico is developing a suitable model for implementation.
Key Questions and Answers
- What are the main topics of discussion? The debate focuses on employment policies, productivity, and economic and social well-being.
- How do working hours relate to a country’s development and income? Historically, as countries develop and their incomes rise, there is a tendency to work fewer hours.
- What are the potential benefits of reducing working hours? Reduced work hours can lead to better work-life balance, more time for personal activities, and decreased fatigue, errors, and absenteeism. Although some evidence suggests increased stress due to higher workloads, the positive impact on well-being is more robust.
- How might reduced working hours affect productivity? The relationship is not linear. Empirical evidence shows marginally positive, negative, or null effects. The outcome significantly depends on whether the reduction is accompanied by complementary policies promoting flexibility and gradual implementation.
- What are the key aspects for countries implementing reduced working hours? Two fundamental aspects to review are productivity impact and employment effects.
- What are the potential consequences of reduced working hours on employment? Rigid-salary reductions may negatively impact employment. However, with complementary policies of flexibility and adaptability, these costs can be offset, resulting in minimal or marginally positive effects.
- How can governments support reduced working hours? Governments can provide financial support, as France did when it implemented a model of financial support for companies maintaining or creating jobs after reducing hours to 35 per week in 1998. However, this measure proved extremely costly for the state.
- How might reduced working hours affect a country’s competitiveness? Reduced working hours could impact a country’s competitiveness compared to neighbors with different labor regulations. However, as more countries adopt these reductions, the impact may balance out.
- How does reduced working hours with constant salary affect informal and formal employment? Reduced working hours with constant salary can make formal employment more attractive for informal workers. However, its impact on formal employment depends on the design of the reduction and its effect on labor demand by companies.
Evidence and Key Experiences
For countries already changing their working hours, two fundamental aspects to review are productivity impact and employment effects. According to Rafael Sánchez Fernández, a professor at the Economics Department of CUNEF University in Madrid:
Empirical evidence does not show excessively positive or negative effects. The effects are usually marginal and become more positive when complementary policies promoting adaptability and graduality are implemented.
Regarding employment, the theory suggests that reducing working hours with rigid salaries tends to have negative effects on employment. However, if accompanied by complementary policies of flexibility and adaptability, these costs can be counteracted, resulting in minimal or marginally positive effects.
After presenting the cases of Chile, recommendations for countries initiating these discussions include:
- Government financial support, as France did when it implemented a model of financial support for companies maintaining or creating jobs after reducing hours to 35 per week in 1998, through subsidies or reduced social security contributions. However, this measure proved extremely costly for the state.
- Consideration of the overall economic context when implementing these reforms is crucial.
In summary, the success of reducing working hours largely depends on its design and implementation. Including measures for adaptability and graduality, along with considering the economic context, is essential to minimize costs and maximize benefits of these policies.
