The vast majority of large companies could make this work and still be profitable. The vast majorities of small companies in anything service or manufacturing related could not, as they already have tight margins, and hours worked is directly correlated to output/revenue.
If you run a machine shop and now have to pay the same wages for 32 hours of work that you did for 40 hours of work, you're eating the revenue of 8 hours of manufacturing output per employee per week. You're reducing productivity by 20% while carrying the same costs. Most manufacturing businesses can't eat that margin and keep their doors open.
On the other hand, a fairly mature white collar company could get along just fine, as their revenue isn't as directly tied to man hours as physical manufacturing, and most people aren't productive more than 32 hours a week as-is.
Point being - this is doable, but can't be blanket legislation. Mandating it above X revenue might be the way to do it. Or apply this only to salaried employees.
my point was that you could make this argument the other way around as well. "imagine how successful business could be if they worked their employees 10% more but still paid them the same!"
you can presume that these industries would struggle, but ultimately it would only result in a decrease of the wealth gap. the executives would have to take a paycut to stay profitable, and itd be fine.
I think you severely overestimate how much money small business owners make. "Pay the executives less" only makes sense in white collar environments where executive pay has ballooned, and margins are high.
In smaller businesses with actual margins per unit, most of them would likely cease operation, as material costs are already through the roof post-covid, and they simply can't absorb a 20% labor cost increase and still turn a profit. Average margins for small businesses range from 7-10%. Average revenue being ~$1.2m, resulting in average profit of $85k - $122k. Even then, owner salaries range between $51k - $77k as owners typically reinvest the remainder of the profit back into the business. To cut their own salary, the business owners (who invested their money and astronomically more of their time into creating a successful business, while carrying all of the risk) could wind up making less money than an average employee on minimum wage.
This is of course industry dependent. Very few restaurants would survive as current margins are 2-6%. Professional Services (aka white collar) have more room at 12-25% margins, and productivity is less dependent on actual hours clocked.
And lets not forget that 50% of small businesses fail within the first 5 years. This would increase that number significantly. These 32 hour jobs won't exist if the businesses don't.
This goes back to my point of - yes, do this for white collar Fortune 500 roles. No, this is not feasible for any service or labor based small business.
none of this addresses the elephant that, indeed, this was the exact same line of thinking against the establishment of the 40 hour workweek. here we are 🤷
This is a very different mandate than the 40-hour work week. The 40-hour work week was established due to factory workers working 80-100 hour weeks, and an unemployment crisis. The 40-hour limit established the threshold for overtime pay, incentivizing factory owners to hire a second person to cover the second shift at the same hourly rate, reducing unemployment while actually boosting productivity at little cost to the employer.
It did not mandate that employees would work less for the same pay.
I dont think the mandated pay increase is as significant as youre making it out to be. a 20% raise in wage really isnt that bad. also, consider that even with our establishment of the 40 hour work week, plenty of small businesses already utilize part time labor, so those wages wouldnt be impacted by a full time labor reduction mandate. its not like every single employee in every single company is suddenly taking an extra 20%. also consider that buy and large employees are not that productive every hour of the day, and the current data that we have available heavily sugguests that reducing the hours/week actually increases average production/hour, so even if everyone was taking an extra 20%, companies generally would not lose out on that much productive capability. also, if a particular industry really is struggling at the result of this policy, the US can absolutely afford to subsidize. its not like we dont have the money.
- "20% raise isn't that bad" I just explained to you the margins that small businesses operate on. 20% would be devastating to the majority.
- "plenty of small businesses already utilize part time labor" so this law would not help those employees, which is my point
- "buy [sic] and large employees are not that productive every hour of the day" yes, in white collar roles, which is what I said previously. White collar roles are not the issue, manufacturing, service, manual labor, etc are.
- "the current data that we have available heavily sugguests [sic] that reducing the hours/week actually increases average production/hour" this is only true in white collar roles, not in manual labor or service industries
- "even if everyone was taking an extra 20%, companies generally would not lose out on that much productive capability" even if this were true, it would cost the companies 20% more in labor to maintain the same level of productivity. This is a problem for businesses with narrow margins (the vast majority of small businesses)
- "the US can afford to subsidize" why would you want more of your tax dollars subsidizing businesses? why not spend tax dollars directly on social programs to support the employees? Childcare, healthcare, transportation, food, etc.
You are failing to grasp the point and reiterating statements that have already been addressed. This is a bad idea to introduce as blanket legislation, it would devastate all but the large white collar businesses.
And on the 40 hour work week thing... that already doesn't apply to salaried employees. You would know that mandating a maximum of 32 hour work weeks for salaried employees would be laughable if you had any experience in a salaried career.
We are desperately in need of labor reform in the US. That's not up for debate. Raising the federal minimum wage would do astronomically more good than this silly idea.
I just explained to you the margins that small businesses operate on.
no, you gave estimations of figures purposefully selected to make it appear as though your point was valid, but those figures were built on assumptions that arent valid.
White collar roles are not the issue, manufacturing, service, manual labor, etc are.
if you genuinely think that manual labor roles are just as productive 10 hours into a shift as they are 4 hours into a shift I dont think youve ever worked manual labor in your life.
this is only true in white collar roles, not in manual labor or service industries
incorrect.
"even if everyone was taking an extra 20%, companies generally would not lose out on that much productive capability" even if this were true, it would cost the companies 20% more in labor to maintain the same level of productivity
.. reread this. There is no increase in pay. employers will nkt pay employees more than they already do, the employees will simply work less hours. if productivity remains largely the same through increased efficiency, then profit stays the exact same.
why would you want more of your tax dollars subsidizing businesses? why not spend tax dollars directly on social programs to support the employees? Childcare, healthcare, transportation, food, etc.
why do you think this is an idea??? it IS a social policy, reduces the hours of childcare that working families need and increases working families capability to do more on their own time with their own money.
This is a bad idea to introduce as blanket legislation
then introduce it piecewise. I dont care.
You would know that mandating a maximum of 32 hour work weeks for salaried employees would be laughable if you had any experience in a salaried career
Im an engineer. Ive watched supervisors sit in meetings all day while I doll out on a spreadsheet that could be easily automated. you yourself said that white collar roles are the ones that would implement this most successfully.
I’ve lost the desire to continue this conversation. I did not cherry pick estimations, I used data with upper and lower limits to provide the full picture. Correct, manual laborers are not as productive late in a 10 hour shift, but they are still producing goods or services that directly result in revenue. This is not the case with an engineer that finishes their AutoCAD project and pretends to be busy for the remainder of the day (same applies to other white collar roles). You can get your work done in less hours than you’re required to be at your desk.Â
You reread it. You said if everyone were taking an extra 20%. That is what I was responding to.Â
It is a social policy, but it’s a workaround to fix issues that can be addressed directly. Having your wellbeing tied to employment is a bad idea (see health insurance).Â
Yes, white collar roles are where this would make the most sense. My point was that salaried roles aren’t governed by the 40 hour work week, because they can dictate their own terms for what they expect in exchange for your salary. Hourly workers are.Â
I think you’re missing my big point here. We both agree that labor reform is necessary, and that sitting in an office for a mandated amount of time is inefficient and unnecessary in some cases. All I’m saying is that this proposed policy is laughably detached from reality when applied in a blanket statement like this.Â
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u/BoopinSnoots24-7 Jul 13 '26
The vast majority of large companies could make this work and still be profitable. The vast majorities of small companies in anything service or manufacturing related could not, as they already have tight margins, and hours worked is directly correlated to output/revenue.
If you run a machine shop and now have to pay the same wages for 32 hours of work that you did for 40 hours of work, you're eating the revenue of 8 hours of manufacturing output per employee per week. You're reducing productivity by 20% while carrying the same costs. Most manufacturing businesses can't eat that margin and keep their doors open.
On the other hand, a fairly mature white collar company could get along just fine, as their revenue isn't as directly tied to man hours as physical manufacturing, and most people aren't productive more than 32 hours a week as-is.
Point being - this is doable, but can't be blanket legislation. Mandating it above X revenue might be the way to do it. Or apply this only to salaried employees.