Governor Jon Huntsman Jr. of Utah is bringing radical change to his state next month. Currently state employees work eight hours a day, five days a week. Starting in August, they will work ten hours a day, four days a week. The idea is to help employees save on gas and to reduce the state’s energy bills. By closing hundreds of buildings for an extra day of the week, the state will save $3 million a year.
Unfortunately, when politicians try to solve problems they usually make them worse. But this idea shows a keen understanding of supply and demand. Tariffs, taxes, minimum wages, and price controls distort markets because they work against supply and demand. But a four-hour workweek will help 16,000 state employees.
Further, the money workers save will be spent in other sectors of the market and the $3m the state saves can be invested in infrastructure, schools, or given back as tax breaks. In March, Utah was named the best-managed state in America and last year it had the most economic growth and it continues to perform well even as the economy slows.
Creativity, intelligence, and an understanding of economics. Imagine the possibilities.
