By Constantin Colonescu, MacEwan University
On July 1, Greece introduced a six-day work week for some categories of employees, namely those working for private businesses that provide 24/7 services. The new legislation seeks to boost productivity to support a growing number of pensioners as the country faces an aging, shrinking population.
The median age of the population in Greece increased from 41 to 44 years between 2010 and 2020, according to a 2022 report prepared by the Greek government. In Canada, for comparison, the median age of the population increased from 37 to 40 between 2000 and 2011, where it has stayed for the last decade.
From 2002 to 2020, Greece’s old-age dependency ratio (the proportion of people aged 65+ to those aged 15-64) increased substantially from 26 to 35 per cent. Unlike in Canada, which has seen its population grow, Greece’s population has decreased by more than half a million (about six per cent of the population) over the last decade.
Other countries are also experiencing aging populations, including Canada. This demographic shift requires the working population to produce more goods and services per employee to support those who do not work.
Forcing the young to work harder, however, is not the solution. Canada must not follow the example of Greece.
The quest for productivity
The Greek government’s prominent justification for the six-day work week law is to increase productivity. The devil in the detail is that they use the more convenient — but inaccurate — definition of productivity as output per worker.
Productivity is a measure of efficiency in production. Some sources define labour productivity as output per worker. If output is measured over a year and divided by the number of workers, then increasing the working time increases this kind of “productivity.” This does not make work more efficient, though.
Let’s visualize this argument of productivity in a simple example. Suppose a young man, Pierre, has a family of three as dependants. He needs to work five days a week. His friend, Konstantinos, however, has to support five dependants. Konstantinos needs to work six days a week and perhaps get a second job.
Is Konstantinos more “productive” than Pierre? No, according to the intended meaning of the word productivity. But yes, according to Greek Prime Minister Kyriakos Mitsotakis.
What will happen when the size of Konstantinos’s family increases even more, to seven or eight dependants? Will Konstantinos be able to work even more? Probably not. He will have to find a more efficient way of using his time or have someone else in the family get a job.
It is more useful to define productivity as output produced per hour. This definition is more accurate because it doesn’t depend on the number of hours of the work week. It focuses instead on how workers’ skills, technological change, management practices and other factors determine productivity.
Historically, Greece has maintained relatively low productivity levels, but it has shown a slight improvement. In contrast, Canada has higher productivity levels, although it has experienced a slight decline in recent years. Again, it is important to measure productivity as output per hour, since this definition does not depend on population, dependency ratio or the number of hours worked per week. It only reflects how efficient the economy is.
Canada’s productivity challenges have generated much discussion recently. Researchers have identified a number of causes, including low investment, some entrepreneurship inertia and inadequate labour composition. None of this research, however proposes to increase the number of hours to boost productivity, as it does not depend on how long the work week is.
No need to increase working hours
To Greece’s credit, forcing the active population to work longer hours may be a solution in the short term. But, if this is the case, the government should make it clear that this is a temporary situation. It should provide a precise date when the law expires and a plan about what needs to be done in the meantime to build a sustainable system.
Canada, along with other developed countries, face similar challenges with low fertility rates and an aging population.
Unlike Greece, however, Canada has avoided a population decline by increasing the number of immigrants. In 2023, Canada recorded its fastest population growth in 66 years, increasing by 1.3 million people, or 3.2 per cent.
Due to its geographical circumstances and other social, economic and political factors, however, Greece is less welcoming to immigrants than Canada. While it does take in immigrants and migrants, it hasn’t made this part of its focused strategy to counter its declining population.
These differences suggest that Canada does not need a radical, immediate solution to address its aging population. The Canadian government doesn’t need to increase the work week to 48 hours — not even temporarily. With some exceptions, the standard work week in Canada is 40 hours in a week, as regulated by the Canada Labour Code.
Avoid pension system collapse
There is still time to build a solid and sustainable plan to avoid a collapse of the pension system. Canada should focus on obvious and time-tested ways of increasing productivity.
This should include providing incentives for innovation, encouraging the expansion of artificial intelligence and automation, and facilitating training for skilled labour. Skilled labour refers to those who have some post-secondary credentials or significant work experience. Programmers, operators of complex machinery, nurses, as well as professionals such as engineers and medics are some examples.
Canada already has some programs in place to improve the skill composition of its labour force. Neither forcing people to work more, nor depending on an indefinite influx of immigrants are long-term solutions.
Some governments perceive a large population as a weapon that would deter foreign aggression. Weaponization of population leads to a prisoner’s dilemma situation, when a country pursues self-interest to the detriment of the whole planet.
Instead of fearing a decreasing population, we should embrace it for the sake of the environment. Our fear of change must not make the transition to a lower population unnecessarily difficult.
Constantin Colonescu, Associate Professor of Economics, MacEwan University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
