8 February 2017

Sweden’s six-hour day was never going to work


Ever since the news broke that Sweden was experimenting with a six-hour working day, at an elderly care centre in the city of Gothenburg, the world has been watching, agog. Would it save money by increasing productivity and reducing workplace sickness? Could this be a new model for progressives around the world to strive for?

Certainly, the press has seized on the preliminary results from the latest run of the trial. “Sweden sees benefits of six-hour working day,” enthused the Guardian. “Sweden tested out a 6-hour workday – and it mostly worked,” claimed Business Insider. The story from Business Insider in turn referred to a story from Bloomberg, which had a very different headline: “Swedish Six-Hour Workday Runs Into Trouble: It’s Too Costly.”

So what’s the truth? I’m sorry to disappoint readers: the experiment has not lived up to expectations. While it was popular among those few workers included in the trial, and did reduce stress, it is being shut down on the grounds of simply being too expensive.

To understand the origins of the project, it is relevant to know that Sweden has for long had a major issue with sick leave in general, and sick leave amongst public sector employees in particular.

Recent statistics show that in 2015, 14.3 per cent of municipal employees in Sweden spent a significant period on sick leave, considerably higher than the 8.3 per cent among private sector workers.

The Swedish Social Insurance Agency, which has published the statistics, explains that the discrepancy relates to workplace problems in the public sector. Public sector employees in Sweden tend to work fewer hours than private sector employees do, yet are more likely to take leave of absence due to work-related sickness.

A key reason seems to be that that in the public sector, the workplace environment is often not the best. In the Swedish voucher system, many schools, care homes and health facilities are run by the private sector. These get the same funding, and are as accessible to the public, as their public sector equivalents.

One might think that private welfare providers push their employees to exhaustion in order to rake in profits. Instead, these firms tend to have far fewer employees on sick leave. In elderly care, for example, 13.2 per cent of public-sector workers compared to 11.8 per cent of private-sector are on sick leave. In health care, the figures are 10 per cent and 8.4 per cent.

Expanding the role of private-sector providers might reduce sick leave. But that’s not popular with the parties of the Left, which instead prefer the six-hour workday. So the trial was based on a simple plan: increase funding for a particular care unit in Gothenburg, so that more staff could be hired and the workload on each individual would be reduced. Since this might result in lower sick leave, the end result could in theory be an economic gain for the municipality.

Since it was launched in 2015, the trial has been analysed by researchers. There have indeed been some advantages. More leisure time led to reduced stress among employees, whose sleep also improved. Yet this has been achieved at a high cost to taxpayers.

This wasn’t a rogue result. Other, similar, trials have been introduced in Sweden in the past. The results have been largely the same: there are some gains, but also high costs.

In 2000, for example, the social democratic government published a detailed report about the effects of reducing working hours.

The researchers noted that the greatest challenge facing the Swedish welfare state was to maintain its financial viability at a time when an ageing population was putting increasing pressure on the welfare system. Reducing the worktime per employee, a costly measure, wasn’t feasible in this scenario.

The luxury of paying for reduced working time was not feasible then, and is not feasible today. After all, the Swedish welfare state still faces the challenge of an ageing population, as well as the cost crisis brought on by large-scale refugee immigration and slow labour market integration of the refugees.

And even if Sweden could afford to continue – and scale up – the Gothenburg trial, it might not be the best choice.

Remember: the elderly care unit in Gothenburg received extra money to hire staff. But the extra staff didn’t provide extra services to the elderly. More staff did the same work that had been provided previously.

Wouldn’t it make sense to focus on improving outcomes for the elderly, not only their care workers? Also, is it wise to reduce the working hours of public sector employees, who typically work fewer hours than their private sector peers already?

The reason for high rates of stress and sick leave, after all, is poor management. The best way of reducing them, and of making best use of taxpayers’ money, would be to improve management practices.

One route would be to encourage private voucher services to expand. After all, they are known to deliver high-quality services while having lower sick leave than the publicly run alternatives.

The idea of a six-hour work-week is not dead. The three Left-leaning parties in Sweden – in particular, the ex-Communists – are still pushing for more trials in various parts of the country.

But even if the stretched finances of the welfare state could support such a costly measure on a large scale, getting people to work less turns out to be a less feasible idea than getting them to work more effectively.

Dr. Nima Sanandaji is the president of the European Centre for Policy Reform and Entrepreneurship (www.ecepr.org). He is author of the The Nordic Gender Equality Paradox (www.nordicparadox.se)