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Grandson Throws Cold Water on the Idea of Shorter-Workweek Legislation

   

Detroit, Michigan

February 25, 1983

Dear Mr. McGaughey:

Thank you for your letter of January 22 and the accompanying materials, including your book ‘A Shorter Workweek in the 1980s.’ I’m afraid I can’t see the merit of this proposal, and must join the vast majority of economists you cite as considering it unworkable.

You refer to my grandfather’s adoption of the five-day week back in the 1920’s - which I always thought was an excellent move, for very good business reasons. The workweek had been coming down over the previous three decades as the higher incomes made possible by the industrial revolution allowed more and more people to take part of their increased well-being in the form of leisure.

My grandfather was a little ahead of this time; he had the foresight to see the benefits, in his rapidly-growing Company, of obtaining the best available work force by offering an unusually good wage and hours package. He also said, as you know, ‘The eight-hour law today only confirms what industry has already discovered. If it were otherwise, the law would make for poverty ... A man cannot be paid a wage in excess of his production.’

I don’t know if a 40-hour week is exactly right; there are companies and individuals that deviate on either side. But the fact that for the past 40 years there has been minimal pressure to change it suggests to me that it is probably about right, in the sense that the average worker would rather have the extra money than the extra free time.

I simply don’t believe that by legally changing the work week you would solve the many problems you refer to - job dissatisfaction, bureaucracy, unemployment, etc. To be sure, companies making products in strong demand and able to pass on the increased employment cost to the consumer in higher prices would employ more workers, but the marginal companies could not, and the higher prices in the strong industries would leave less in the pockets of consumers, thus forcing curtailment of employment in the weaker businesses. The alternative would be for the Federal Reserve to adopt an expansionary monetary policy, which would lead to inflation.

Contrary to your second point, I do not believe that weekly hours could be reduced without reducing the weekly wage. Productivity comes largely from increased capital investment and improved management. Higher wages result from such improvement. It would be theoretically possible to use part of that improvement to lower the number of hours worked, but that would mean less take-home pay per week than if the productivity gains went entirely into higher wages. Most workers, I think, would prefer a higher income than less income and more leisure.

Further, I don’t see how it would be possible to legislate a shorter workweek at the same weekly pay - even if an enormous bureaucracy were established to oversee the wage control program this would entail. Ultimately, the national hourly wage level would tend to approximate the average worker productivity, which nothing in the shorter workweek would increase.

The country’s troubles in the past few years, including high unemployment, are the result of the government attempting to reverse the policies that for years resulted in excess demand and inflation. Wringing out inflation is a painful process that a shorter workweek, in my opinion, would not ease and could even make worse.

For all these reasons, as you can see, I cannot support your proposal.


Very sincerely,


Henry Ford II

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