A Four-Day Workweek Will Benefit Everyone, But Especially Women
Taking into account domestic and caring responsibilities, women work more hours per week than men on average — and their pensions are still far smaller than men’s. That’s not a fair deal. A four-day workweek can help get us on the track to equality.
Later this year, over thirty UK companies will take part in a six-month trial of a four-day workweek with no loss of pay. They will be following the 100-80-100 model, where workers get 100 percent of the pay for 80 percent of the time, while theoretically delivering 100 percent of the efficiency of a five-day workweek.
The British experiment comes after a trial in Iceland between 2015 and 2019, where this new approach was taken up by public sector employees. It was described as an “overwhelming success.” Employees had a much better work-life balance and were found to be just as or sometimes more productive than under longer working hours. Since the trial, 85 percent of workers in Iceland now either work or have the option to work a four-day week with no loss of pay.
The trial in the UK will be led by the 4 Day Week Global campaign in partnership with the think tank Autonomy and researchers at Oxford University, Boston College, and Cambridge University. Campaigners say the introduction of a four-day week can bring benefits not only to employees’ mental and physical welfare but also profitability gains for companies. Other positive impacts, they say, include environmental benefits, increasing time for hobbies and life administration, helping connect families, reducing unemployment and underemployment, and even saving the high streets.
But one potential impact of a four-day week that’s received far too little attention is the reduction of the gender pension gap. The policy would be good for everyone, but it would be especially beneficial for women, who work more hours per week (paid and unpaid) than men on average and have smaller retirement savings to show for it. A four-day workweek can help redistribute the burden of unpaid care work, thus allowing more women to stay in or rejoin full-time employment and save for retirement. It can’t end gender inequality, but it can help get us on the right track.
The Gender Pension Gap
According to the proposed model in the UK experiment, reduction in working time will be met with a guarantee that pay will be kept at the same level. Given that most people contribute to pensions through workplace autoenrollment, their personal and employer contributions would stay the same even though they’d work one fewer day per week.
An extra day off and sustained pension contributions is an enticing deal for all pension savers. But women stand to benefit the most.
In the UK, we have a gender pay gap of 7.9 percent for full-time employees, which is up from 7.0 percent in April 2020. This increases to 15.5 percent when part-time work is accounted for.
The picture is even bleaker when it comes to the gender pension gap. Currently, women’s pensions contain around 17 percent less at the beginning of their careers than men’s. This discrepancy reaches 56 percent by retirement. Inequality in employment and pay is thus exacerbated in the retirement outcomes for women, who live on average two to three years longer than men.
Many factors contribute to the gender pay and pension gaps, but there is a consensus on the biggest one: women still are much more likely than men to work part-time or completely stop working to care for a child or an elderly relative. Working part-time usually means getting paid less than a full-time worker. Taking a break from full-time employment also means a break in pension contributions, slowing down the cumulative snowball effect of a pension. And if women do return to work, progression into higher-paid senior roles is also slowed or stopped.
Women’s pensions are also undermined by the workplace autoenrollment system. In order to be eligible for the scheme, workers currently need to make a minimum of £10,000 a year from a single job. As women have more unpaid work and caring responsibilities, they are more likely to have part-time or lower-paid roles, which means they may not meet the threshold.
As for the childcare responsibilities and unpaid work in the home that keep women from full-time employment, it accounts for about 20 percent of UK GDP — but is without any pension top-ups.
When the combination of paid and informal unpaid work is accounted for, women put in more total hours of work per week on average. But women have an average pension pot size just over 50 percent smaller than men to enjoy retirement with. It’s definitely not a fair deal.
The five-day workweek was designed for an industrial economy comprised of single-income households. It’s no longer fit for purpose. The UK economy is now service-sector dominated, and dual-income households are the norm. While gender equality in employment has improved over the last eighty years, the social structures and gendered division of labor have not changed enough.
Our outdated work model and pension contribution system needs to be redesigned with women in mind. The four-day week takes steps to level the playing field.
How a Four-Day Workweek Can Help
A four-day week would make it easier to balance life and work responsibilities. This would decrease the pressure on women to drop out of full-time employment and make it easier for others to rejoin full-time employment if they wish. It would also decrease underemployment, lessen the costs of paid childcare, and help level the playing field for unpaid care work by keeping men at home longer.
A recent policy paper published by the Women’s Budget Group comments in regard to a four-day week: “As the marginal worker is usually female, this effect could reduce gender gaps in both employment and income.” As the definition of full-time employment is decreased, more women will surpass the £10,000 a year threshold for autoenrollment and also have higher sustained pension contributions throughout their working life.
Belmont Packaging in Wigan, a company that practices a four-day week, asked its employees how they spend their three-day weekend. One employee said, “It’s like a bank holiday every week. Not exactly like one, because the wife has me doing chores every Friday.” During the early months of the pandemic, when many workers were kept at home, research showed that men took on a greater share of housework and women’s disproportionate burden decreased.
If those patterns hold, restructuring the workweek should create more gender equality around unpaid labor in the domestic sphere, which should in turn result in a rebalancing of paid work, thereby helping close the gender pension gap.
It would also have major implications for childcare. Kirsten Buck, a four-day week employee, chooses to spend the Wednesday she has as her extra day off with her son, meaning one less day of childcare to pay for each week. She commented, “It can make a massive difference to retention of employees because they have better wellbeing and family balance. So I think that it’s the way the world needs to go. We’re no longer in the Victorian era.”
Couples covered by the policy could take two separate days off to care for children, thus eliminating not one but two days of paid childcare. The Women’s Budget Group also suggest this approach, concluding, “With respect to the practical implementation of a shorter working week, we advocate a flexible approach.” Parents being able to use their extra days off on separate days is vital to sharing caring responsibilities and reducing childcare costs.
While autoenrollment legislation needs to be updated to fit the working practices of women, the four-day week can help redistribute the burden of unpaid informal work and share caring responsibilities. Doing so will improve employment retention rates and opportunities for women, thereby helping rebalance gender inequality in pension contributions.
Pensions provide income for nearly a quarter of our lives. The gender pension gap — not just the pay gap — therefore needs to be addressed to achieve equality, and the four-day week can help us get there.