Increasing the payroll while halving the number of hours each may work effectively cuts productivity down by an almost exponential factor. Productivity is what makes capitalism work, as the more productivity, the less the per-unit cost, and the higher wages that can be passed on to the individual worker. At lower cost, a lower price may also be asked of the consumer, increasing competitiveness in the market place.
But now, twice as many people are each being half as much as before, so the average wages FALL, which reflects negatively in the demand for goods and services in the marketplace. People of lower incomes do not shop at Macy’s or Whole Foods. They go to second-hand shops and dig around Dumpsters for their next meal. They double up and share rent on housing, four or five people crammed into a space meant for only one or two. Unconventional sites for housing, such as shipping containers or storage units, are put into use, often in ways that violate any and all of the local codes.
This would best described as a death spiral.
When I had a large staff gave them the option to work four ten hour days instead of five eight hour days. Except for one employee, all chose the four ten hour days, half had Friday off, the other half had Monday. Productivity soared.
Part of each day is always wasted getting organized to get ready to work and then gearing down to get ready to go home. Best change we ever made. Employees loved having three days off and our clients just loved being able to have their needs met on an extended day basis. So it was a win/win for everyone.