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Unemployment is going up. Is a four-day working week the answer?

Employees might be keen as long as wages stayed the same. Bosses? Less so.

The UK is expected to see a huge rise in unemployment as businesses struggle to get back up and running from the coronavirus lockdown and continuing social distancing restrictions. Now a new report has suggested a novel solution: reduce the standard full-time working week to four days instead of five. Because businesses would still want to be open for the same number of hours overall, regular staff working less means extra employees would be hired to plug the gap.

However, there is an obvious drawback to this sort of scheme: cost. Most workers wouldn't be willing to reduce their salary by a fifth. It would impact their standard of living and leave many unable to pay their bills. To implement a four-day working week without mass pushback, then, wages would have to stay the same even as work hours went down. But most employers wouldn’t be up for increasing their staff costs in this way. It would cut into their profit margins at a time when many are already battling to stay afloat.

There could, however, be an exception to this rule. There is one big employer who might think it's worthwhile to increase staff costs in order to reduce overall unemployment: the UK government.

The public sector already employs 16.5 percent of all UK workers, including NHS nurses, state school teachers and civil servants. That works out as about five million people. The authors of the four-day-week report reckon that if all full-time public sector workers reduced their hours, half a million more jobs would be created. The cost to the government would be about £9 billion. That’s not exactly pocket change, but it’s not outside the realms of possibility. The government just spent the same amount on its furlough scheme, which was also designed to prop up employment.

There are lots of reasons why governments are willing to throw money at getting people into work. Unemployment tends to cost the government more money (on things like the benefit system or healthcare spending) at the same time as decreasing its revenues (because unemployed people usually pay less tax).

There's also a wellbeing aspect to the equation. Democratic governments generally want to make their citizens happier. Being unemployed is bad for people's mental health, as is working long hours. A four day working week, if the report is accurate, would help on both counts.

Read our explainer on: what causes unemployment?

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