The Law of Supply and Demand is in play, and it means a company cannot dictate prices, wages, or working conditions in a free market economy. Rising productivity would have reduced the average work week regardless.
If you still aren't convinced, consider that the benefits package routinely offered to employees is worth around 40% of their pay.
Human societies aren't governed by simple, divine Laws. "Free market economy", based on rational actors, is an abstraction, an idealized model which is useful to understand some mechanisms, but it's far - VERY far - from being a complete model of any real society. At some point, trying to explain everything with the simple rules of that abstraction becomes an ideology just like Communism, which tries to do the same with different abstractions/simplifications.
Why does it require it? To what aim does this serve the market?
A check against fraud and protection of property rights can be achieved through force and violence and the threat of violence, so that answer seems inadequate.
Likewise, supply and demand is definitely affected by government policies. The supply of labor, for example, by allowing or disallowing near shore or off-shore work with steep penalties. Or allowing/disallowing gambling.
So that also flies in the face of evidence.
It’s a self-serving, faith-based belief that that desires to put “market forces” beyond the reach of voters. It’s also a colossal delusion.
> Rising productivity would have reduced the average work week regardless.
Do you have evidence of this?
> consider that the benefits package routinely offered to employees is worth around 40% of their pay
Please define "routinely" and "employees". Part-time employees do not get benefits packages, much less benefits packages worth 40% of their pay. PTO, Sick time, family leave, and other "benefits" are actually legally mandated and I do not see any evidence that companies would offer this if they were not mandated to do so.
Google sez: "Total compensation generally exceeds base salary by 30% to 50% for many roles, meaning salary often represents only 60% to 70% of an employee's total worth to the company."
Google sez total compensation includes bonuses, commission, stock options, employer-paid insurance (health, life, disability), retirement contributions, paid time off, tuition reimbursement, student loan assistance, gym memberships, employee discounts, Childcare assistance, commuter benefits, and relocation expenses.
If you still aren't convinced, consider that the benefits package routinely offered to employees is worth around 40% of their pay.