The economy is in crisis; inflation is up, prices are rising faster than wages; what does this mean for remote working and calls for a four day week, and are we heading for a two jobs per person economy?
There is a labour shortage; this is well known. But will the shortage persist? It is highly likely that many economies will see a recession this year. Costs are rising faster than wages. This is especially tough for people on lower incomes — rising food and energy costs tend to hit poorer households disproportionately. Higher interest rates are likely to lead to higher rents; this too will hit poorer households. Obviously, the poor getting poorer is not an outcome we want — anyone who thinks otherwise is being a tad callous. There is also an economic reason why this is a bad thing. As a general rule, the lower your income, the lower your savings ratio and higher your spending to income. So if the poor are about to get poorer, expect a significant negative knock-on effect on the economy.
This leads to the next question. If spending on items other than food and energy falls and tips the economy into recession, will there still be a labour shortage?
Google searches for remote working and four day week
Analysis of Google Search data by online salary calculator Income Tax UK found:
- Online searches for "work from home jobs" increased 84 per cent in 2022 compared to 2021
- When comparing the searches in 2022 with 2019, they are up 270 per cent
- Google searches for "4 day week jobs" exploded 1,011 per cent in early 2022 compared to 2021.
Income Tax UK said that "Companies that are being flexible with their work schedule will have leverage and advantage, as they can reach out to a larger pool of potential candidates who are looking for a better work-life balance."
But what about recession?
So far, not that surprising.
There is a labour shortage; to attract staff, companies need to embrace remote working or hybrid working. In due course, they may need to look at offering a four day week. However this assumes that the labour shortage will persist in the event of an economic downturn.
Saving on costs
There is another side to the story, however.
Remote working will save companies money. They will be able to move into smaller officers and significantly cut overheads.
Companies that can make remote or hybrid work successful will have lower overheads than rivals. And in the long run, if you have two companies with similar products and service offerings, the one with lower overheads will crowd out its competitor.
In this way, by the force of economic evolution, remote working will win out.
As for the workforce itself — remote working isn't right for everyone. For some people, work is the foundation of their social life, while for others, the cost of travelling to work is a significant overhead.
If living standards are squeezed, employees will be keener than ever to work from home; employers will be keener than ever to support this.
Four day week is also about productivity
Critics of the four-day week may overlook its key benefit — an apparent benefit. Advocates of the four-day week don't just favour the idea because they think it will be 'nice' a kind of step towards utopia. They also say that working fewer hours leads to higher productivity.
Companies may find a commercial benefit in moving to a four day week, with no drop in productivity.
Of course, the underlying assumption of the four day week is that wages would not fall.
But suppose during an economic downturn, employers cut staff working hours, increase hourly pay partly but not wholly in line with greater productivity, and reduce total pay.
Workers will find they are slightly worse off but have a lot more leisure time.
Here is the Techopian prediction — the combination of remote working and economic benefits to business of cutting working hours for staff will see an increasing number of people take on two jobs.
Reality, over what we want
We are not suggesting people taking on two jobs is a good thing, but given the economic conditions of 2022 and given the economic benefits of a four day week and given the way remote working opens up opportunities, we would say it is an inevitable thing.
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