If the working hours would be reduced from 40 hours / week to 32 hours / week (4 days x 8 hours instead of 5 days x 8 hours), but maintaining the wages at the same levels, then I guess that the price of the commodities would increase.

I've seen various claims that working hours can be reduced (Carlos Slim Helu 2014, Google 2014) and I wonder about the negative effects of such a change.

If, for example, I am producing clothes with 10 workers, each producing 100 shirts per week (20 per day) and I sell the shirts for \$1 each, then I make \$1,000 per week, covering the production costs. Reducing the working hours from 40 to 32 / week means I can produce only 800 shirts per week (200 shirts per day x 4 days) but since I need \$1,000 per week in order to cover the costs, that means I have to sell the shirts for \$1.25 (that comes from dividing $1,000 to 800 shirts)

Therefore, at a first sight, it looks like reducing the working week to four days implies a 25% increase for the prices of the commodities.

Am I right?

  • 1
    $\begingroup$ Can you employ more than the cap for higher wages? That is, would overtime be illegal? What are you assuming about what happens to employment? That is, are total hours worked lower, the same, or higher? $\endgroup$ – BKay Mar 4 '16 at 19:02
  • $\begingroup$ I am not interested about the implications on unemployment levels, I am only asking about the implication on the prices of commodities. If you want to talk about the implications on unemployment, then you should ask a specific question for that, or I can do that - if you want me to do it. Yes, let's assume that overtime would be illegal, so everyone works no more than 4 days / week, and then it's easier to check the results. What total hours you are talking about? The total worked hours per month or per year? If yes, then my answer is: the total hours worked are lower by 20% $\endgroup$ – Joe Jobs Mar 5 '16 at 19:27

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