AI and a Shorter Work Week?

Can widespread adoption of AI lead to enough productivity gains to make shorter work weeks economically feasible?

JP Morgan CEO Jamie Dimon has suggested that future generations of employees could work a day and a half less every week thanks to AI.

In America, a 40-hour, 5-day work week is generally considered to be the standard, but this wasn’t the case until the 1930s.  The five-day work week became the standard with the passage of the Fair Labor Standards Act of 1938.  At the beginning of the century, it was not uncommon for most Americans to work 60 hours a week.

Henry Ford, in many areas a man ahead of his times, established the 8-hour day and paid $5 a day, high wages in 1913.  In 1922 he introduced the five-day week, probably not out of altruism, but rather, a recognition of the high cost of turnover. Ford officially adopted the five-day, 40-hour work week in 1926.

Investors should recognize that the five-day work week is not sacrosanct.  A recent British study saw a 65% reduction in sick days during a four-day work week, while 71% of employees said they had reduced levels of burnout.  As a result, 92% of the companies in the program said they are keeping the three-day weekend.

It should be obvious that AI is going to usher in some changes, but they may not all be bad.

All comments and suggestions are welcome.

Walter J. Kirchberger CFA