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Shorter working week is not always sign of stronger economy

Economics is often called the "dismal science", but a science of sorts it is.

And in the same manner that the laws of physics do not end at the Scottish Border, neither does rational economics.

It is therefore surprising that the Jimmy Reid Foundation in its report, Time for Life, claims that working significantly fewer hours would lead to greater economic productivity in an independent Scotland.

It correctly notes that of some 12 European countries with lower average working hours than the UK, 11 of them have higher productivity. However, its logical implication is entirely in the wrong direction. Nations such as Denmark, the Netherlands and Germany can enjoy shorter working hours precisely because of their greater economic productivity.

So if Scotland, independent or otherwise, wishes to emulate the most successful European nations we will need a more productive economy than at present.

But therein lies the problem with the Jimmy Reid Foundation's analysis. Rather than offering means by which the Scottish economy can grow through improved productivity, it offers the reverse gear of contemporary growth scepticism.

In order to deliver a sustainable future for Scotland, it's claimed that we will have to "drastically reduce our output", confusing the efficiency gains of innovation-driven economic growth with increased material and energy throughputs.

And from a growth sceptic perspective a shorter working week is of course desirable. It caps the overall size of the economy. In this instance, the Jimmy Reid Foundation is offering a rather bleak vision of a future for Scotland where the jam is merely spread thinner.

But aside from growth scepticism, the Jimmy Reid Foundation report raises some important questions for the future. As our economy becomes more capital intensive and less labour intensive, the fruits of the improved productivity from machines are likely to flow disproportionately to the owners of capital. This leads directly to widening relative inequality, even though a growing economy raises the absolute welfare of the least advantaged and innovation deflates prices.

And as others have noted, working hours for those most able to interact effectively with machines are unlikely to fall as their skills will continue to be in high demand.

But those without the skill-set for the machine-age future will see falling working hours, not through choice but through involuntary technological underemployment.

The challenge for Scotland is therefore to deliver a progressive future of shared prosperity in which the historical decline in working hours continues through innovation-driven productivity gains.

What Scotland doesn't need is the shared austerity of socially regressive growth scepticism enforced by a shorter working week.

Colin McInnes is Professor of Engineering Science at the University of Strathclyde

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