The possible approval of the end of the 6×1 scale in Brazil brings with it relevant economic impacts that go beyond the debate on workers’ quality of life. In an interview with CNN Prime TimeGustavo Madi, from the consultancy LCA, assessed that, although the measure meets society’s desire for a greater balance between work and leisure, it carries significant costs for the productive sector.
For Madi, society needs to be aware that reducing working hours makes production processes more expensive.
“This measure responds to society’s request to rebalance life time between working hours and leisure or other unpaid activities, but it comes at a cost,” he stated.
Productivity per hour versus total production
Madi explained the difference between productivity per hour and total productive capacity.
According to him, more rested workers tend to perform more, make fewer mistakes and have less turnover, which increases productivity per hour worked.
However, this gain is not enough to compensate for the reduction in total hours worked over the course of a month.
“This increase in productivity per hour is not enough to compensate for the total production in the longer period of time. Over the course of a month, for example, the total amount worked by this employee will reduce, which means a lower level of production”, said Madi.
For him, the measure therefore has “a cost in terms of reducing the cost as a whole”.
Possible increase in self-employed workers and new CLT hires
Asked about the possibility of growth in the number of self-employed professionals after the change in scale, Madi acknowledged that this could occur for some workers, who may choose to continue working the same number of hours to obtain greater income.
However, he assessed that the predominant effect must be different.
“The predominant effect will be that you will have a certain compensation with the increase in CLT jobs to compensate for the reduction in hours worked by each employee”, he explained.
When asked who, Madi stated that the answer depends on the dynamics of each sector.
According to him, the bill should be divided between a reduction in companies’ profitability and an increase in consumer prices.
“Over time, this increase in prices means inflation. Inflation erodes workers’ purchasing power,” he warned.
Madi considered that, initially, the expectation of reducing working hours without reducing wages or profitability may come true, but that this benefit tends to be reduced by the inflationary effect over time.
Furthermore, he highlighted impacts on public finances: less profitable companies collect less income tax, but the increase in hiring can increase the collection on the payroll, creating a partially compensatory effect.
