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"Kellogg’s discovered, was that employees were happy to work less when they were paid 12.5% more per hour, meaning the company was able to offer more jobs"

I don't get it, how were they able to offer more jobs when they paid the same wage (6hrs/day with a 12.5% increase)?

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Perhaps Kellogg's limiting factor was not their salary budget, but maximum occupancy on their assembly lines. Switching from eight hours to six means you can hire a whole additional shift of workers, assuming the machines run 24 hours a day.

If 6 hour workers are 112.5% as productive per hour as 8 hour workers, then this turns out to be a good deal for Kellogg's.

Oh, that makes sense!

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