Iceland's economy is lagging behind most of its European rivals after a shorter working week was introduced nationwide, according to research published on Friday. Without a reduction in wages also Exceeds – mentioned CNN. Between 2020 and 2022, 51% of the country's workers accepted the offer of shorter working hours, including a four-day workweek, according to analysts who believe that percentage may be higher today.
“Last year, Iceland recorded faster economic growth than most European countries and one of the lowest unemployment rates in Europe,” the UK-based Institute for Self-Governance and the Icelandic Association for Sustainability and Democracy (ALDA) noted in a statement.
Gudmundur Dr. said: Haraldsson, a researcher at Alda, said in a statement: “This study shows a real success story: shorter working hours are widespread in Iceland, and the economy remains strong on many indicators.” In two major trials in Iceland, between 2015 and 2019, public sector employees' working hours were reduced from 40 to 35-36 hours per week, while keeping their salaries at the same level.
The trials involved 2,500 people – more than 1% of Iceland's working population at the time – and aimed to maintain or increase productivity while improving work-life balance. The researchers found that productivity remained unchanged or improved in most workplaces.
Meanwhile, employee well-being improved “significantly,” from noticeable stress and burnout to health and work-life balance.
Following the trials, Icelandic trade unions negotiated reduced working hours for tens of thousands of their members across the country.
“Economic vitality”
Iceland's economy is expected to grow by 5 percent in 2023, ranking second only to Malta among rich European economies, according to the International Monetary Fund's latest World Economic Outlook released earlier this week. This is much higher than the country's average growth rate of about 2 percent between 2006 and 2015.
However, the International Monetary Fund expects growth to slow significantly in Iceland this year and next.
Growth is expected to decline in 2024 due to further weakness in domestic demand and slower growth in tourism spending
– the agency said in a July assessment of the tourism-dependent economy.
On the other hand, Iceland's low unemployment rate is a “strong indicator of the vitality of the economy,” the Autonomy Institute and Alda said.
International Monetary Fund Global economic prospects According to his publication, this rate reached 3.4 percent last year, which is just over half the average of advanced European economies. According to the agency's forecasts, a slight increase is expected here this year and next, at about 3.8 percent.
By the way, many attempts have already been made around the world to introduce a four-day working week. These include successful trials in 2022 that include 33 companies, most of them in the United States and Ireland, or in another island nation, the United Kingdom. They are also trying it out in Japan and even in Dubai. In Hungary, among other countries, the four-day working week has been tested at Magyar Telekom.
(Cover image: Reykjavik, Iceland. Photo: Tim Graham/Getty Images)
