New Zealand's four-day work week, and other economics experiments inspired by COVID-19
Above all, it is an economic experiment. The sudden stop is testing every econ department theory about global supply chains, fiscal and monetary policy, public confidence, and unemployment. Let's not let the opportunity go to waste.
Lionized Prime Minister Jacinda Ardern yesterday recommended that New Zealand employers adopt a four-day work week. The long weekends would kickstart domestic tourism, reviving one of the most important sectors of the New Zealand economy.
Great idea! Try it! Let's see what happens!
The pandemic has prompted a vast array of policy experiments to protect jobs and incomes. The US has sent stimulus checks and subsidized small businesses.
A lot of European countries are using government funds to pay furloughed workers. The US has increased unemployment pay to levels unimaginable before the crisis, and there are even conservative Republicans contemplating UBI-like income guarantees for workers.
Almost every industry that can support working from home has switched to a working-from-home model, and some have already said they'll make it permanent.
Work-sharing, in which employees cut hours, stay employed, and receive partial unemployment, was almost never practiced in the US before COVID-19, but now it's exploding in the 27 states that permit it. The city of Amsterdam is proposing to recover from pandemic by trying out a new, ecologically minded theory called "doughnut economics."
In short, the world is conducting a whole bunch of economic experiments all at once, in an effort to avert a lasting depression. It's incredibly exciting.
Our job as citizens and our politicians' job as leaders is to learn from these experiments. As soon as the immediate crisis lifts, we'll be tempted to retreat back to our ideological hidey-holes: lower taxes, raise taxes, no deficit, don't reward laziness, etc. Let's fight that urge.
Necessity has forced us to try policies we would have railed about three months ago. If they work--and let's hope some of them do--let's have the humility and honesty to admit it, and make them permanent.
A version of this post first appeared in "Insider Today," a daily email written by Henry Blodget and David Plotz. To receive it in your inbox, please sign up here.
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