In Iceland people work less, but earn the same

In Iceland people work less, but earn the same
In Iceland people work less, but earn the same

In Iceland, unions have been able to achieve a reduction in working hours for tens of thousands of people since 2019 while keeping their salaries unchanged. The unions have achieved this by leveraging the empirical evidence provided by two studies conducted respectively by the municipality of the capital Reykjavík and the Icelandic government on 1.3 per cent of the country’s workforce since 2014, which have shown that a decrease in hours worked caused the productivity of workers to increase or at most maintain unchanged.

In this way, they managed to reduce contract hours or obtain the right to reduce them for 86 percent of the country’s workers: an unprecedented result, even considering that the Icelandic population does not exceed 357,000 inhabitants. of which those who work are less than 197 thousand.

The figure emerged from a report drawn up by ALDA (the Icelandic Association for Sustainable Democracy: a non-profit organization that has been supporting the need to reduce working hours in the country for a decade) and by the independent British think tank Autonomy. The report provides a detailed account of how Icelandic workers came to achieve this, which sets an important precedent in the long-standing debate on the pros and cons of reducing working hours.

In 2014, before the studies that would have led to the reduction of working hours began, Icelanders worked on average more than any other population in Northern Europe: 39.6 hours per week on average per person, compared to 36.8 in the Finland, Sweden’s 36.3, Norway’s 33.9 and Denmark’s 33.6. Perhaps even the comparison with the other Nordic countries, where the per capita wealth and the services offered by the state were similar but worked less and productivity was higher, slowly entrenched in Icelandic civil society the opinion that it was necessary to reduce the hours worked. . The Icelanders were in fact in the position of being one of the richest populations in the world in terms of GDP per capita, but not having the time to enjoy the wealth produced due to the poor balance between work and private life.

Therefore, in 2014, the most important public sector workers union in the country (BSRB) asked and obtained from the municipality of Reykjavík that an empirical study be carried out on a part of its employees to understand whether a reduction in hours worked for equal wages had effects on the well-being of workers and their productivity, both in the short and medium term. Another goal of the study was to find effective organizational solutions to increase productivity by reducing hours worked.

The test lasted five years and came to include 2,500 workers, including employees of schools and facilities for the elderly and disabled. The workers involved saw their working hours drop from 40 to 35 or 36 per week, as the case may be, while their wages were left unchanged.

Completed in September 2019, the study led to the conclusion that the reduction in hours had not reduced work performance in many cases, while in others it had increased them: in one of the municipality’s call centers, for example, the percentage of phone calls to which employees responded was 93 percent on average, versus 85 percent measured over the same period in a control group that had not decreased hours.

In late 2015, BSRB managed to persuade the Icelandic government to conduct a similar study as well. The objectives and modalities were the same as the previous one, and the government encouraged all its institutions to participate. Started in 2017, the study involved 440 employees in different offices, including the Directorate of Revenue, Immigration, a police station and the internal medicine department of a hospital in Akranes, West Iceland.

This study also produced similar results to the previous one: generally there was no evidence of a negative impact of the reduction in hours on the provision of services, which in some cases improved. For example, in the police department under observation, the number of closed cases per month went from 6.7 to 8.8 on average. Of course, the variables that affect the closure of a case are many, and therefore it is not possible to attribute this increase with certainty to the reduction in working hours. However, there is another fact that indicates an improvement in the productivity of the policemen in question: the average number of days required to process an indictment went from 12.5 to 7.6.

These results consolidate what is now a certainty, looking at the data of the last twenty years: in countries where people work on average fewer hours, productivity in GDP terms for every single hour worked is higher.

In order to be able to maintain the same level of services by reducing the hours worked, the facilities involved in the Icelandic studies have had to make changes in the organization of their work. The most common ones were the shortening of meetings or their replacement with email or other more efficient digital means of communication, the cutting of tasks deemed less useful and the optimization of work shifts.

These measures led the workers observed to actually work less, contrary to what happened in France after the Aubry I and II laws, which reduced the working week to 35 hours but at the same time had the effect of increasing overtime hours. : to maintain the same levels of production, workers had to stay at work longer. This has not happened in Iceland for now except in rare exceptions, and everything suggests that the cause is the reorganization that has made the work more efficient.

Both studies also measured how well-being of workers in and outside the workplace changed through questionnaires.

In the government-led study, the perceived well-being and stress symptoms of workers whose hours were reduced decreased, while the employees who made up the control group reported no changes. In the Reykjavík City Council study, employees of some offices and schools, as well as those who worked outdoors, reported an increase in their well-being, while others reported no changes. In general, the reduction in hours seems to have improved or at most left unchanged the perception of well-being of workers.

According to the reports of those who have observed an improvement in their well-being, the main factors seem to be the increase in the time dedicated to family and social relationships, that dedicated to self-care, greater ease in running errands and greater participation in household tasks. , which in turn helped reduce stress in the family environment.

– Read also: A 4-day work week?

Based on these results, in 2019 and 2020, several trade unions including BSRB managed to obtain new collective agreements from the government, municipalities and the Federation of Icelandic companies (a federation of companies similar to the Italian Confindustria) which introduced the possibility to reduce working hours with unchanged pay for 170,000 of the 197,000 people employed in Iceland. In the private sector, hours went from 40 to 35 or 36 depending on the case, while in the public sector it went up to 36 with the exception of some workers in particularly stressful jobs, such as nurses, who managed to get weeks 32 hours.

It should be noted, however, that these changes were not without cost: in some cases, especially in the hospital sector, it was necessary to hire more employees to make up for lost hours. This cost the government the equivalent of approximately $ 33.6 million, which is a small amount when compared to the total budget of the Icelandic government, which amounted to the equivalent of $ 7.1 billion in 2019.

Until now, according to the report by ALDA and Autonomy, the reductions in working hours in Iceland do not seem to have led to controversy and indeed appear to have remained very popular. Support for the current ruling coalition, led by 45-year-old Katrín Jakobsdóttir – leader of the Green Left movement – increased in May from the previous month, putting the coalition in a position of relative strength ahead of next year’s elections. September.

Bjarkey Olsen Gunnarsdóttir, also elected with the Left Party – Green Movement, said in April that shorter hours will give people more freedom, flexibility and control over their time. “We should continue on this path”, he added, “and I believe that the next step is to reduce the working hours to 30 per week”.

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