World’s largest 4 day week trial begins in the UK. Over 3,300 workers from 70 UK companies from a wide range of sectors began participating in the world’s largest trial of working time reduction this week.
Background. There is nothing inherently fixed about the standard working week of 9-5 Mondays to Fridays. ‘Normal’ work hours have changed over time, with the weekend and bank holidays as we know them today being the products of campaigning by workers and trade unions in the past. Reducing working hours has been a longstanding proposal to improve working life and the balance between work, leisure and important unpaid activity such as care.
Criticism. Critics of working time reductions argue that they would be expensive - even when productivity is rising in some sectors, it is not in all. Frederick Harry Pitts published a critical take on the issues that may arise in trying to implement a four-day working week, concluding that “the four-day week may seem impractical in the short term. But with talk of ‘building back better’ and ‘levelling up’ backed up by a more interventionist industrial policy across the political spectrum, the medium-to-long term picture offers proponents some measure of hope”.
Evidence so far. This trial follows many previous experiments with shortening the length of the working week. (Follow the European Network for the Fair Sharing of Working Time’s newsletter for developments in working time reduction across Europe.)
Government waters down corporate governance and audit reform. The government have announced their proposals for a new regulator to tackle the dominance of ‘Big Four’ audit firms, but 9 campaign groups and experts such as Greenpeace, ClientEarth, the Fair Tax Foundation and academics from Sheffield and City Universities have warned that the government’s audit reform proposals will fail to reform underlying accounting principles that still enable bad practices such as fraud, tax dodging, economic crime, dirty money, the over-valuing of fossil fuel assets and more. (Read Economy’s explainers on audit and accountancy reform and watch this video from comedian Rosie Holt on its importance.)
How can climate policy drive productivity growth and ease the cost of living? Green Alliance and Nesta have produced a report assessing how 14 types of net zero policies might affect living costs and drive productivity growth. They found that 7 of the areas will have ‘outright, no regret positive impacts’ and 4 could have positive impacts on productivity with the right intervention. The report concludes: “far from being a beneficiary of growth, the green economy should be classed as a central driver right at the heart of the Treasury’s growth plan.”
Private finance won’t decarbonise the economy. Last week, DWS became the first asset manager to be raided after a greenwashing investigation by German police. The FT’s Harriet Agnew, Adrienne Klasa and Simon Mundy explain ‘how ESG investing came to a reckoning’ after multiple scandals exposed ‘allegations of greenwashing at the highest levels’. For instance, Stuart Kirk, global head of responsible investing at HSBC’s asset management division, was recently suspended for saying investors ‘need not worry’ about climate change. Desmog’s Adam Barnett argues the event represents a moment where the ‘mask slipped’ for private finance.
Political power of the finance sector. Positive Money found that in 2020 and 2021, banks, lobbyists and companies from the financial sector spent £17.6m on influencing MPs and political parties. They are calling for bans on private-sector second jobs for MPs, caps on political party donations and longer ‘cool off’ periods for politicians who want to work in finance (Video and Twitter thread summary here.)
Was the US stimulus inflationary? Two months ago the Federal Reserve Bank of San Francisco argued that the American Rescue Plan was responsible for most of the US’s inflation due to the boost it gave to disposable incomes. Economics blogger Noahpinion summarises the debate and concludes that the Democrats will suffer politically from the current bout of inflation and they ‘should probably shift [their] future economic policy ideas away from “just give people cash” and in the direction of “invest in things that increase the country’s productive capacity”.
Economic rent and the rising cost of living. Political economist Will Davies argues that inflation is exposing rentier interests throughout the UK’s economic model, which is no longer ‘capitalist…as it has abandoned the risky, productivity-enhancing investments that have long been seen as capitalism’s hallmark’. Economist Joseph Stiglitz explained the role of monopoly power in driving up prices in the US when competition is weak, and the wider economic and political consequences of concentrated corporate power.
1970s inflation wasn’t limited by monetary tightening? A paper from the US Federal Reserve explains that the role of the ‘Volcker shock’ in curtailing inflation in the 1970s was vastly overplayed, and actually finds that "Nearly 90 percent reduction in inflation volatility is possible even without any changes in monetary policy when the economy transitions from equal shares of power between workers and firms to a new balance in which firms dominate."
A post-pandemic recalibration of economic thought. Commenting on the post-neoliberal shifts in economic policy since the onset of the Covid-19 pandemic, PEF’s James Meadway argues that “We are in a critical moment – a point of multiple crises and change, where the intellectual terrain for the next decade will be formed.” Consequently, PEF are hosting their first annual conference to gather leading thinkers on macroeconomics, sustainability, inequality and the digital economy to discuss issues such as ‘the cost of living on dying planet’, ‘how to work less (and why you should)’ and ‘what does a progressive macroeconomics look like?’ View their full timetable and visit their talks at the University of Greenwich, London, on Saturday 11th June.