As our economy grows, emissions of heat-trapping greenhouse gases also grow. Countries with larger economies are typically larger polluters than countries with smaller economies. In fact, the only time before the COVID-19 pandemic the world’s carbon pollution went down rather than up was during the 2008 financial crisis.
‘Decoupling’ economic growth from environmental deterioration is often presented as a sustainable way to have ‘green growth’. For pollution to go down, the carbon emissions per unit of GDP would need to fall faster than combined economic and population growth. In my opinion, this is very challenging if not impossible.
Enter degrowth: the movement that strives for a happier live with a smaller economy and therefore lower emissions. One of the showpieces of the degrowth movement is the four-day work week. The idea is that people working fewer hours will spend more time with family, friends, and their hobbies. While employees will take a lower pay, they will live richer lives taking value from hobbies and social interactions rather than financial transactions. And as people have a lower salary, they will buy less, less is produced, and emissions are lower.
A longer weekend that helps the environment sounds attractive, but test runs show that shorter working weeks do not necessarily mean degrowth. Dutch marketing firm Loyals was able to introduce an extra day off for all personnel without reducing salaries or productivity. The New Zealand trust Perpetual Guardian cut working hours from 40 to 32 hours per week, while still paying for a full work week. According to J. Haar, a professor who studied New Zealand, “actual job performance didn’t change when doing it over four days instead of five.” A trial at Microsoft Japan even found that a four day work-week boosted productivity by 40%, measured in sales per employee.
Bottom Line: An extra day can be nice for employees as it allows them to spend more time on the household and hobbies or with friends and family. However, the productivity of the firms mentioned above did not go down and therefore employees did not get a lower pay. This means that production and consumption, and therefore GDP, did not de-grow. While a shorter work week is promising, it will not in all cases contribute to a environmentally stable degrowth economy.
* Please help my Economic Growth & Development students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).