I have a question about reducing the work week

[ksen]

Let's say Congress passed, and the President signed a law mandating a 30-hour work week. Anything worked over 30 hours a week would be subject to overtime pay requirements like we do now with the 40 hour work week.

How would this actually work?

Would hourly wages remain the same so now you have to make due on 10 hours less a week in earning? Or would wages get adjusted so if you were making $500/week working 40 hours you'd still earn $500/week working 30 hours?

 

[dismal]

You're not really changing either the overall supply or demand for labor so I wouldn't expect the price of labor to change much.

People would have to get second jobs.

 

[J842P]

Let's say Congress passed, and the President signed a law mandating a 30-hour work week. Anything worked over 30 hours a week would be subject to overtime pay requirements like we do now with the 40 hour work week.

How would this actually work?

Would hourly wages remain the same so now you have to make due on 10 hours less a week in earning? Or would wages get adjusted so if you were making $500/week working 40 hours you'd still earn $500/week working 30 hours?

Likely most people working for wages will simply have their hours cut.

 

[CJW]

My guess: The pay will be reduced pro rata - workers would earn 25% less and work 25% less. The business will still need to staff the same numbers of hours sot they will effectively have to hire 25% more people to cover the hours, assuming they don't want to pay overtime.

 

[Jason Harvestdancer]

I don't think there will be a straight hiring of 25% more people, although I agree hours and pay will be cut by 25%. The expense of hiring someone goes beyond their take-home pay so the hiring will be smaller than that. Overall this would likely result in an economic slowdown caused by the overall increase in the price of labor.

 

[ksen]

You're not really changing either the overall supply or demand for labor so I wouldn't expect the price of labor to change much.

People would have to get second jobs.

I would think if the cost of labor goes up by 50% after 30 hours as opposed to going up 50% after 40 hours it would affect the supply and demand of labor somewhat.

 

[Jason Harvestdancer]

He's got a point. There are people out there who do work overtime, and get overtime pay for doing so. So what this would do for them is kick in the higher pay earlier. As a result their employer might very well cut them off a little earlier, so the guy who regularly works 45 hours a week may now work 35 hours a week.

 

[ksen]

My guess: The pay will be reduced pro rata - workers would earn 25% less and work 25% less.

If you get a 25% cut in take home pay a week then I don't see how this would be a net plus for workers.

 

[J842P]

My guess: The pay will be reduced pro rata - workers would earn 25% less and work 25% less.

If you get a 25% cut in take home pay a week then I don't see how this would be a net plus for workers.

No shit?

When I was working for a bar kitchen I was making a significant amount less than I could have been because they wouldn't let me work past 40 hrs a week.

 

[ksen]

But then if full-time is redefined as being 1,560 hours a year down from the current 2,080 hours a year and a full-time position was previously paid, let's say, $46,000/yr why wouldn't the full time position still be paid $46,000/yr?

I'm lucky enough to be salary and since I agreed to work full time for $X/yr I'd still expect to be paid the same $X/yr for working full time regardless of the number of hours for full time being defined down.

 

[coloradoatheist]

But then if full-time is redefined as being 1,560 hours a year down from the current 2,080 hours a year and a full-time position was previously paid, let's say, $46,000/yr why wouldn't the full time position still be paid $46,000/yr?

I'm lucky enough to be salary and since I agreed to work full time for $X/yr I'd still expect to be paid the same $X/yr for working full time regardless of the number of hours for full time being defined down.

It's going to depend on a lot of things, but you would only be 3/4 productive as you were so your new salary would be 3/4 of what it was or slightly less so after overtime it would be the same spot. How well did the new hours work out in France?

 

[ksen]

But then if full-time is redefined as being 1,560 hours a year down from the current 2,080 hours a year and a full-time position was previously paid, let's say, $46,000/yr why wouldn't the full time position still be paid $46,000/yr?

I'm lucky enough to be salary and since I agreed to work full time for $X/yr I'd still expect to be paid the same $X/yr for working full time regardless of the number of hours for full time being defined down.

It's going to depend on a lot of things, but you would only be 3/4 productive as you were so your new salary would be 3/4 of what it was or slightly less so after overtime it would be the same spot. How well did the new hours work out in France?

At least as of the writing of this NY Times article it was kind of mixed but leaning positive.

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Oh, here's an answer from that NY Times article about how France handled hourly wages and the change in work hours:

Still, though companies were given incentives to hire, in the form of rebates and reductions to the country's high social charges, many big manufacturers eschewed them. Instead, they took advantage of flexibility measures included in the work week reduction law to operate more efficiently with the same number of workers. As a result, productivity soared as workers were paid the same amount to work 35 hours instead of 39.

Meanwhile, total payroll costs fell even as hourly wages rose, according to Duval-Kieffer. "For corporations, there have clearly been some positive effects," he said, "notably the ability to lower social charges and to increase flexibility."

 

[J842P]

But then if full-time is redefined as being 1,560 hours a year down from the current 2,080 hours a year and a full-time position was previously paid, let's say, $46,000/yr why wouldn't the full time position still be paid $46,000/yr?

I'm lucky enough to be salary and since I agreed to work full time for $X/yr I'd still expect to be paid the same $X/yr for working full time regardless of the number of hours for full time being defined down.

Ksen, if you and I have an agreement that I am willing to sell you a bucket of kale, defined as 2kg per bucket, for $10 and then the legislature passes a law re-defining a bucket as 3kg, do you think I now suddenly should decide my kale is worth less money?

 

[Keith&Co.]

But then if full-time is redefined as being 1,560 hours a year down from the current 2,080 hours a year and a full-time position was previously paid, let's say, $46,000/yr why wouldn't the full time position still be paid $46,000/yr?

If you're producing 25% less for the company, why would they give you effectively a 33% raise? Your hourly rate would go from $22/hour (40 hour week) to $29.5 (30 hour week). Giving you more money for less work is not how companies rise to dominate the market.

 

[ksen]

I think if the contract is worded "bucket of Kale" instead of "2kg bucket of Kale" then yeah.

 

[J842P]

But then if full-time is redefined as being 1,560 hours a year down from the current 2,080 hours a year and a full-time position was previously paid, let's say, $46,000/yr why wouldn't the full time position still be paid $46,000/yr?

If you're producing 25% less for the company, why would they give you effectively a 33% raise? Your hourly rate would go from $22/hour (40 hour week) to $29.5 (30 hour week). Giving you more money for less work is not how companies rise to dominate the market.

Right. Honestly, a big company could probably make it work somehow. You'd be hurting the small businesses though, at least, that seems unavoidable to me given the sorts of smaller places I worked at in the past.

 

[Keith&Co.]

I think if the contract is worded "bucket of Kale" instead of "2kg bucket of Kale" then yeah.

Okay. What does your contract say about hours?

Is the X/year assuming you show up for a 40 hour week, or is it expressly stated?

 

[ksen]

But then if full-time is redefined as being 1,560 hours a year down from the current 2,080 hours a year and a full-time position was previously paid, let's say, $46,000/yr why wouldn't the full time position still be paid $46,000/yr?

If you're producing 25% less for the company, why would they give you effectively a 33% raise? Your hourly rate would go from $22/hour (40 hour week) to $29.5 (30 hour week). Giving you more money for less work is not how companies rise to dominate the market.

Who says I'd be producing 25% less? In France many firms experienced increased productivity when the work week was lowered to 35 hours from 39 hours.

- - - Updated - - -

I think if the contract is worded "bucket of Kale" instead of "2kg bucket of Kale" then yeah.

Okay. What does your contract say about hours?

Is the X/year assuming you show up for a 40 hour week, or is it expressly stated?

It says, "annual pay". Number of hours worked during a year isn't expressly stated.

 

[Keith&Co.]

But then if full-time is redefined as being 1,560 hours a year down from the current 2,080 hours a year and a full-time position was previously paid, let's say, $46,000/yr why wouldn't the full time position still be paid $46,000/yr?

If you're producing 25% less for the company, why would they give you effectively a 33% raise? Your hourly rate would go from $22/hour (40 hour week) to $29.5 (30 hour week). Giving you more money for less work is not how companies rise to dominate the market.

Right. Honestly, a big company could probably make it work somehow. You'd be hurting the small businesses though, at least, that seems unavoidable to me given the sorts of smaller places I worked at in the past.

My company isn't small, but we contract by hourly rates. We figure how many people needed for a project, and what we're paid, and we bid that to the government.
So, a senior engineer working on a project for X many hours is worth as much as four interns.
I think we'd HAVE to adjust our annual salaries down to match our lower productivity in order to stay competitive in our market.

 

[Keith&Co.]

Who says I'd be producing 25% less? In France many firms experienced increased productivity when the work week was lowered to 35 hours from 39 hours.

Measured how? Four hours less time spent in harness makes increased productivity...how?

I think if the contract is worded "bucket of Kale" instead of "2kg bucket of Kale" then yeah.

Okay. What does your contract say about hours?

Is the X/year assuming you show up for a 40 hour week, or is it expressly stated?

It says, "annual pay". Number of hours worked during a year isn't expressly stated.

Not anywhere, in the employee's handbook or the contract? Well, lucky you.

I'd guess that your company would have to lay off some of the workers with those contracts in order to be able to afford the new situation.