The Economics of Less Work

The economic theory behind the 35-hour week rested on several propositions, each hotly debated by economists. First, the "lump of labor" hypothesis suggested that reducing individual working hours would force companies to hire additional workers, addressing France's persistent unemployment. Second, productivity gains would offset increased labor costs as workers, refreshed by additional rest, would accomplish more per hour. Third, increased leisure time would boost consumption, particularly in tourism and culture, creating additional employment.

Initial results seemed promising. Between 1997 and 2001, French unemployment fell from 12.5% to 8.6%, with about 350,000 jobs created. Supporters credited the 35-hour week; skeptics pointed to favorable global economic conditions. Productivity did increase, with French workers maintaining some of the world's highest hourly output. The tourism and leisure industries boomed as workers used their RTT days for long weekends and extended vacations.

But problems emerged quickly. Small businesses struggled with the administrative complexity and increased costs. The healthcare sector, already short-staffed, found it nearly impossible to maintain services with reduced hours. The rigid overtime limits prevented companies from responding to demand surges. Most controversially, many workers, particularly low-wage earners who depended on overtime pay, saw their incomes stagnate or decline.

Sophie Martineau, a nurse in Lyon, captured the ambivalence: "I love my RTT days—I can spend real time with my children, pursue my painting. But the hospital is constantly short-staffed. We're exhausted during our working hours, rushing to accomplish what used to be spread over longer shifts. And young nurses can't get hired because the hospital can't afford the full-time positions required by the 35-hour rules."