The push for a four day workweek has gained traction during the
pandemic. But it's not a new idea.
It's not pie in the sky, high wages and short hours. That's
what's the backbone of labor. That was what constituted the
traditional American Dream.
Then vice presidential candidate Richard Nixon even campaigned on
it during the 1956 election. Around the same time, Wall
Street shortened it's trading hours from five and a half days
a week to only five.
We got rid of Saturday trading hours back in the 1950s. We had
an extra half hour in the morning back in the 1980s. The
real question is, how long should they be open?
A November 2020 survey of more than 2000 office workers
worldwide found that 74% said they supported a four day
workweek.
We have a new cohort of workers that are entering the force to
compete for talent, we have to listen to our people.
Businesses exist to achieve a task and to do that they can't
do it with just the business owner. We need our people.
Even though we have computerized markets, the traders who watch
those markets are human beings like the rest of us.
The idea is also gaining traction in Congress
representative Mark Takano from California introduced federal
legislation in July 2021, that would shorten the standard
workweek to 32 hours. Since businesses including Wall Street
have shortened the workweek in the past, could it happen again?
What would happen if the four day workweek came to Wall
Street?
The pandemic has shifted people's opinions about work,
employees are making it clear that they like the flexibility
of working from home and companies are taking notice.
That's one of the discoveries that people have made with the
COVID working from home that they can have a life and do
their job as well, don't have to go and stay in the office 10
hours a day and pretend to be doing things just burning the
time.
Preliminary trial runs of a four day workweek in Iceland suggests
that working fewer hours could lead to increased productivity.
Some US companies have adopted or are piloting four day
workweeks, such as Kickstarter and social media software
company, Buffer. But there are still questions about how the US
economy may be impacted. On a larger scale. If a four day
workweek becomes the norm.
When we talk about having a pilot program for a four day
week in your business, we're really talking about having a
conversation in your business about what productivity truly
is, how you're going to measure it, and how you're going to
improve it. And how do you support a conversation around
reducing working hours so that we can actually get those
benefits into our society and it might not be a four day week, it
might be you know, reducing work hours, you know, to 32 hours
over five days.
Proponents of a shorter workweek point to the harm overworking
does to a person's physical and mental health as a reason to
shift to fewer hours. In March 2021, results of an internal
survey showed that junior investment bankers at Goldman
Sachs reported that the working conditions were quote inhumane,
saying that they were working more than 100 hours per week and
only had about four hours a day for sleep and self care.
The idea is that we create this groundswell that understands
that working with a number of hours that we are now and
burning out and ruining our lives, ruining our health isn't
actually worth it. It's very easy to see how rest and play
become a part of the way that we make ourselves well again.
You know, whether it's investment banking, wealth
management, you know, financial planning, it's always been a
culture of heavy hours and working a lot now that we've had
a chance to we've been forced to stop to a certain degree and
reorient ourselves because of the COVID environment. It has
allowed us to re examine what that culture is.
There's evidence that a shorter workweek could also be in a
company's best interest. In August 2019, Microsoft Japan
tested a four day workweek without pay decreases, it led to
a 40% improvement in sales per employee compared with the
previous summer. Most of the employees also said they liked
the change. So what are the odds US exchanges could shorten
trading hours? And how could it impact markets? If US exchange
hours were changed to a four day schedule, there would likely be
a big short term impact.
So I think there there potentially could be some
volatility early on, this would be a seismic shift from a five
day trading week, to a four day trading week. Overtime, a lot of
potential issues could be streamlined and mitigated.
Essentially, the trading volumes will remain the same, but you
have less time. So you have to cram in all those buy and sell
orders into four days instead of five days. So you get more
volatility.
A shift to a four day trading week would probably also require
investment into how the markets electronic trading
infrastructure operates.
You would think in this computerized world that we
should just let the computers run 24 seven, but the reality is
a lot of people have to monitor those computers and it's not
just the technical staff making sure they're working. It's the
people who are working customer orders, there's a trade off
between the human element of the people who work in the markets,
and the machine element that could go all night long.
Shorter trading hours could also slow down the process of
completing a trade.
We have three days away from the terminal and for days on, I
think a challenge could be settlement times. If I want to
get out of a particular name and get into another, can I do it
within a week's time? I think that's a very important element
to examine and work through as we move forward.
But there could be potential benefits to shortening hours,
such as attracting more diverse talent to the industry.
It's no secret that the finance profession and trading
especially are overwhelmingly male, and in the industry, we're
doing a lot of navel gazing to say, how can we fix this
problem? How can we make the business more attractive to to
women and other people who've previously been discriminated
against in the industry. And one of the things floating around in
Europe is the idea of shortening their trading hours.
Culturally, it would take a lot to make Wall Street work fewer
hours, but that doesn't mean it's impossible.
The financial sector traditionally has been one that
folks work a long time and are there Saturdays, Sundays, you
know, 70 hour workweeks has been the norm. And as we look at a
new cohort of workers entering into the workforce, I can
absolutely see a shift here because it's happening in other
industries. It's happening all over the world.
Once again, people are talking about work life balance, not
just in terms of a stable 40 hours a week, work life balance
in terms of reduction. It may be that the process of shortening
the hours of labor is starting again, I have my doubts, but it
looks exciting.
Even though the general public may be excited about a four day
workweek, there have actually been calls on Wall Street to
make market hours longer.
When the market closes at four o'clock in the east, it's still
only one o'clock on the west coast. And there are lot of
retail investors who are left basically unable to trade until
the next morning, they would love to have longer hours. But
every time that suggestion comes up the people on the east coast
go, wait a minute, no, because even though the computers don't
complain, the people who have to watch those computers do.
Even though the markets have an open and close, there is still
trading going on outside of standard operating hours.
Regular trading session starts at 9:30am eastern time, and it
closes at 4pm eastern time. But stock trading can also occur as
early as 4am, and as late as 8pm. Most exchanges now offer
after hours trading where investors can buy and sell
securities outside of the regular trading session.
There's a big difference in stock market action during set
trading hours and extended hours.
People trade more when the market is open, and the industry
knows this. So they certainly are going to be in no hurry to
shut down the cash register.
There's an expectation, especially from retail investors
that they'll be able to access trading after hours.
The trend we're seeing is for consumer services to be
available 24 seven, I consider it a great technological
failure, that if I can't log onto a website at 10 o'clock at
night, and order something from an online vendor, the fact that
the stock market closes so early in the day is actually a big
nuisance. You know, for the bulk of retail investors, it's a pain
that the stock market is open as few hours as it is.
There are pros and cons to trading during extended hours.
Stocks react more drastically to company announcement, which
usually come out after hours. So if you want to bet on a
company's earnings, and you would usually buy and sell the
stock after the bell, it is pretty speculative in nature
that you want to capture the profit in a very short amount of
time.
There are also fewer people trading after hours, which means
it may be harder for a seller to find someone to buy a stock at a
specific price.
If you're trading a US stock, you're trading it after hours,
oftentimes that execution will be executed the following day
when markets open. So that sometimes is not the best
pricing from an investment perspective on execution. So we
don't do a lot of it, but it is it is something that obviously
investors are interested in from time to time.
It's also important for investors to have time to
regroup and strategize about the next day's market action.
Companies want the investors to have the time to digest the
news, to go through all the numbers in the earnings report
and really make a rational investment decision instead of
acting on it immediately and sometimes emotionally and
irrationally.
If the markets already function outside of its current set
schedule. Does that mean hours could be extended rather than
shortened?
Even the market is only open from 9:30 to 4:00. most traders
monitor the news 24 seven extending trading hours even
more would be a lot more, you know, consuming for them.
I really don't want the people who are managing my retirement
plan to be any more fatigued and tired when they're doing the
trading