Amir Barnea is an associate professor of finance at HEC Montréal.
This essay is part of the Prosperity’s Path series. In a time of geopolitical instability and a shifting world order, the challenges facing Canada's economy have only gotten more visible, numerous and intense. This series brings solutions.
In 1930, at the beginning of the Great Depression, British economist John Maynard Keynes published a bold article with surprisingly optimistic predictions.
Keynes predicted – and was pretty much spot on – that within a century, the average standard of living in the world would be eight times higher.
But he went even further and conjectured that ultimately, the rat race will end. “In 100 years,” he wrote, “technological progress will allow the work week to be shortened to only 15 hours, or three hours a day.”
While Keynes forecasted future economic growth almost perfectly, he was dead wrong with respect to the amount of time we work today. His 15-hour work week projection is a far cry from the average 40-hour work week we have in Canada, and it seems like those 40 hours are experienced by employees as harder and harder over the years.
According to a recent national survey of 5,000 employed adults in Canada commissioned by Mental Health Research Canada, nearly 39 per cent of employees reported they feel workplace burnout, up from 35 per cent in 2023. This must change. Canada must adopt the four-day work week. Importantly, it’s not just for the sake of individual workers’ wellbeing. The entire economy will benefit as a result.
British economist John Maynard Keynes, centre, in July, 1944. Almost a century ago Mr. Keynes predicted that 'technological progress will allow the work week to be shortened to only 15 hours, or three hours a day.'Hulton Archive/Getty Images
Kitfox Games, a gaming studio in Montreal, has done exactly that. Five years ago, Kitfox, which employs 15 people, switched to a 4-day 100 per cent pay work week, and the impact on the team has been tremendous.
The idea to shorten the work week came from Tanya Short, Kitfox’s chief executive officer. “The video game industry typically has what they call crunch, which is unpaid overtime‚” she told me at the company’s offices in downtown Montreal. “That was never my interest, possibly because my first salary job was in Scandinavia.”
She said that at first, a 20 per cent reduction in the working time was scary. But then she realized that getting consistent “good quality” 40-hours a week out of her team is extremely hard and will result in burnout.
“I fully believe that I’m getting better work out of people than we would if we did five days a week. The reason why I believe that fairly strongly, is that I feel like I observe it in myself,” Ms. Short told me.
Commuters board a bus in Toronto. Research shows that the benefits of a four-day work week are extremely positive for individuals, society and corporations.Fred Lum/The Globe and Mail
Kitfox’s story is just one of hundreds of firms and non-profits who have implemented the 4-day work week model successfully around the world. That is exactly the path that Canada should take. Research shows that the benefits for individuals, society and corporations are all extremely positive.
Juliet Schor – an economist, and professor of sociology at Boston College – has the proof. She has been researching the labour market for decades, and in her recent book, Four Days a Week, she summarizes her findings as the lead researcher of 245 different experiments on shortening the work week conducted around the world over the past three years.
“The clearest evidence of the model’s success is the fact that 90 per cent of companies chose to continue with the short work week after the trial period ended,” she said over Zoom.
Schor did her research in collaboration with Andrew Barnes, a New Zealand entrepreneur working in the financial sector. In 2018, Mr. Barnes decided to switch his entire company (of about 250 employees), to a four-day work week without a reduction in pay.
In his experience, a shorter week increases the productivity of individual employees and of the company in a way that completely offsets the fact that everyone is working 20 per cent less.
Higher levels of individuals’ well-being that result from a four-day work week would ultimately translate to a significant increase in productivity across the economy.
Currently, burnout imposes a big hidden cost on Canadian firms. According to the mental health survey cited above, “burnout costs employers between $5,500 and $28,500 per employee annually.” Recent evidence from the American Journal of Preventative Medicine also suggests that burnout can cost an average American firm about US$5-million annually.
Sure, in some parts of the economy, keeping pay constant while reducing working hours by 20 per cent would require some finessing. Consider, for example, nurses and doctors who work in shifts at a hospital, or employees at a local Tim Horton’s branch. But governments and public corporations alike need to find those funds and add more workers, as shift workers are among the most overworked employees in the country.
In fact, the extra costs paid for hiring additional employees for “high intensity” jobs, can be less than what is saved on retention and talent attraction. And as the world’s 10th largest economy, Canada has the capacity to do so.
Additionally, the fact that we’re in the midst of an “AI industrial revolution” means that now is the perfect time to pursue this structural change, since labour productivity is already on the rise. Implementing a short work week in Canada means that the extra profits which the new technology creates will be shared equally by all Canadians, instead of further enriching already rich shareholders.
With 39 per cent of Canadians feeling burnout, the sky won’t fall if profitable companies sacrifice a small fraction of their profits to give “life changing” benefits to their hard-working employees.
In collaboration with Canada’s largest unions, the public sector would be a natural place to start the design and implementation of a short work week. The legislation that follows should set a 32 hour work week as the new labour standard, with any hours worked beyond that defined as overtime and eligible for a higher pay. A 10-year time frame for the full implementation of a short work week should allow enough time for both the public and the private sector to make the necessary adjustments.
Ms. Schor agrees. “Within 10 years, I am certain that giant companies like Google and Apple will introduce a four-day work week. It will be the new standard in the labour market. Time and again, we hear from employees that shortening the work week by one day is a life-changing experience. That’s where we’re headed,” she concludes.
Keynes’ article Economic Possibilities for our Grandchildren was written in 1930. So, we still have four years to evaluate his optimistic predictions. An end to the rat race still seems a bit far-fetched, but if we wisely use the new technology that was introduced to us, and if our policy makers make the right calls, maybe we’ll get a step closer to Keynes’s rosiest guess that the real problem for humanity will be how to deal with all the leisure that science and compound interest have created for us.