Although nominal hourly wages would increase through full wage compensation with shorter working hours, real income would be 0.8 to 1.2 percent lower following adjusting for inflation, Lorenz told the APA.
A reduction in weekly working hours by one hour would lead to a real annual loss of income of 550 to 700 euros for an average full-time employee, Lorenz has calculated. Economic output would fall by 0.5 percent in the short term and by 0.6 percent in the long term. The lower production and higher labor costs would increase inflation by 0.4 to 0.5 percentage points. “Especially once morest the background of the labor shortage, the trend of working less must be broken. The average weekly working hours actually worked by employees in Austria is now less than 34 hours – that is less than almost anywhere else in Europe.”
Results of tests involving reductions in working hours are often presented too positively
Lorenz criticizes the fact that the results of tests involving reduced working hours are often presented too positively, as these are often carried out by companies that already expect positive results. The Agenda economist emphasizes that productivity is difficult to increase in some sectors. Increases in efficiency through shortening breaks or automating administrative tasks through AI are not a substitute for reducing working hours, but can also be achieved independently.
“You have to be able to afford a reduction in working hours,” says Lorenz. “Either on the employee side in the loss of income or on the employer side. All studies show that productivity gains are not enough to compensate for the loss of prosperity.” He also warns that reduced working hours would lead to less redistribution, which would affect both working and non-working people.
