One of the most remarkable facts of recent economic history is
the increase in working hours in the US and UK. As far as I know, it is
unprecedented in modern economic history for an increase in overall
national income to coincide with an increase in working hours. The
reason is simple: in economic terms, leisure is almost invariably a
"luxury" good (in fact the paradigmatic luxury good); by definition, as
income increases people spend more on luxury goods (in the case of
leisure, the "cost" is not money but income foregone). Even stranger,
this increase in working hours has been particularly noticeable for
people at the upper end of hte income distribution (professionals,
lawyers, academics, programmers, consultants like myself).
What are the explanations for this anomaly?
One possibility is the benign, free-market one. People -
especially professionals who are working with their brains and keyboards
rather than breaking their backs - like and enjoy work more, so want to
do more of it. If this is true, no useful policy response is possible
or helpful. But it doesn't seem very likely. I like my work but have
no desire to spend more than 35-40 hours a week in the office - and I
have no kids; if I did I would doubtless prefer even less.
Another possibility is a straight Marxist one. Employers are
simply exploiting "economies of scale"; put another way, there is a
fixed cost to hiring and training a worker (not to mention benefits,
office space and so on) so its obviously cheaper to hire 2 workers and
work them 60 hours a week rather than 3 for 40 hours. So you can pay
them more per hour and still make higher profits. In this case, the
response is that of M. Jospin; legislate a 35 hour week, job-sharing,
paid family leave, and so on. Prevent exploitation and people will have
more time to spend with their families, etc. and they will be happier.
My view is that while there is probably an element of truth in this
explanation for some employers, it doesn't apply to most professionals,
most of whom don't punch time clocks or the equivalent.
The third explanation is that we have all somehow become trapped
in a "bad equilibrium": that is, we would like to have much more time
for ourselves, but we worry that we won't get ahead in our careers,
especially because everyone else is working harder. Moreover, (at least
for some principal breadwinners) the less time spent at home, the less
we feel like spending at home because it seems a distraction from the
main event of our lives, which is now work. (I have seen economic
articles modelling the career structure at professional firms like law
firms, where only a proportion of people will make it to the next level,
which shows how such sub-optimal situations can arise).
This is certainly the explanation which accords most with my
experience. So what is the right policy response? I do think there is
a role for some direct regulation: perhaps not of working hours, but of
paid maternity and paternity leave, etc. Fiscal incentives like
subsidised job-shares might also help, although less at the middle and
upper end of the income distribution. Insofar as the working families
tax credit implicitly helps part-timers, this is a start. But really you
are talking about changing cultural norms (I was very impressed once,
visiting Sweden for a meeting with a fairly senior civil servant, that
when we finished at 2.30 he had to leave because he was taking his
daughter to a festival).
I personally find the idea of ramming family values - "the norms
of marriage and family" as the DLC declaration (see Holly Page's
message) puts it - down people's throats quite abhorrent. For me, the
question is what government can do to create a climate in which relating
to other people - whether it is your partner, children, friends,
community, whoever - is more important than "winning" in a business or
work context. But this is where, as a simple economist, I run out of
good ideas. Any thoughts?
Jonathan Portes
37 Washington Square West
New York, NY
email: jonathan.portes@nera.com
-------------------------------------------------------------
Posted to uk-policy, a service of Nexus. http://www.netnexus.org/
Hosting and email provided by new media consultants On-Line Publishing