Ever since Keynes's seminal 1930 paper Economic Possibilities for our Grandchildren predicted that technological progress would virtually eliminate work by making labor much more productive, economists have puzzled over why Americans' working hours have gotten longer and longer, until they are some of the longest in the world.
While its true that early technological progress brought shorter working days with it, until about 1973. The years since have reversed the trend, and the more technological we become, the longer we work, bringing our work home with us in pervasive, inescapable ways.
The traditional explanation for this is that Americans want more stuff, and so they'll work longer hours to get it — but that doesn't explain why working hours contracted, and then lengthened and lengthened.
Harvard economist Benjamin M Friedman has a new paper in the Journal of Evolutionary Economics (paywall)
that reinvestigates Keynes's prediction and the mystery of the longer American work-week. Friedman confirms Keynes's prediction about technological contributions to productivity: he says that by 2029, American will have octupled its labor productivity, just as Keynes predicted.
As to the longer working hours, Friedman thinks that the answer is inequality. Because all additional profits from increased productivity go to the owners of the technology (capital), labor's dividend is cheaper goods, not more leisure. Basically: Americans are too poor to stop working.
But why do bosses work longer hours, too? Friedman thinks that being a boss is a labor of love, so they pull long hours too. I don't know that this is true. I'd blame social norms: when incredibly long hours are normal, they're normal, for everyone.
This can be seen in the median worker’s income over this time period, complete with a shift in 1973 that fits in precisely with when the workweek stopped shrinking. According to Friedman, “Between 1947 and 1973 the average hourly wage for nonsupervisory workers in private industries other than agriculture (restated in 2013 dollars) nearly doubled, from $12.27 to $21.23—an average growth rate of 2.1 percent per annum. But by 2013 the average hourly wage was only $20.13—a 5 percent fall from the 1973 level.” For most people, then, the magic of increasing productivity stopped working around 1973, and they had to keep working just as much in order to maintain their standard of living.
What Keynes foretold was a very optimistic version of what economists call technological unemployment—the idea that less labor will be necessary because machines can do so much. In Keynes’s vision, the resulting unemployment would be distributed more or less evenly across society in the form of increased leisure.
Friedman says that reality comports more with a darker version of technological unemployment: It’s not unemployment per se, but a soft labor market in which millions of people are “desperately seeking whatever low-wage work [they] can get.” This is corroborated by a recent poll by Marketplace that found that for half of hourly workers, their top concern isn’t that they work too much but that they work too little—not, presumably, because they like their jobs so much, but because they need the money.
Why Do Americans Work So Much?
[Rebecca J Rosen/The Atlantic]
Work and consumption in an era of unbalanced technological advance
[Benjamin M Friedman/Journal of Evolutionary Economics]
(via /.)
