June 21, 2017
Will Our Grandchildren Work Only Four Hours Per Day?
Chinese billionaire and Alibaba founder Jack Ma predicted this week that in 30 years, people will be working less than they do now. According to NBC:
Only time will tell if Ma's prediction will come true in terms of its time horizon and magnitude. But, if the next century follows the pattern of the previous 150 years, we could be looking at continued and significant reductions in total working hours.
Some of the biggest gains are likely to occur in the so-called “developing” world, but even the wealthy West will continue seeing gains in this regard.
For many Americans, at least, comments such as Ma's may cause them to scoff. Remarkably, there still seems to be an impression among many Americans that they are working more hours now than their grandparents did.
This is no doubt true in some specific cases, but overall, the evidence is clear that people are working less now than in the past — with the possible exception of the recent past.
Indeed, if we look at a survey or total work hours conducted by Michael Huberman and Chris Minns, we find that total hours worked have declined over time: In Germany, for example, total hours worked declined from 3,284 hours in 1870 to 1,463 in 2000. In Canada, work hours declined over the same period from 2,845 to 1,835.
The overall trend is obvious, and only the US, Sweden, and Canada in this sampling of wealthy countries shows something other than a decline from 1980 to 2000.
From 1870 to 2000, though, total work hours declined 39 percent in the United States, 40 percent in the UK, and 55 percent in Germany. While it's certainly possible that some Americans may be working as much as their great-grandparents did, overall, most of us work more than a third less time than they did.
Other studies have shown similar results.
A study by Thomas Juster and Frank Stafford found that from 1965 to 1981 in the United States, “market work” hours per week fell from 51.6 hours to 44 hours for men. For women, market work rose from 18.9 hours to 23.9 hours. We would expect an increase for women over this period as women began to take on “market work” at higher rates than before.
In yet another study by Mary Coleman and John Pencavel, average weekly hours worked fell for white men from 44.1 hours in 1940 to 42.9 hours in 1988. It fell for white women from 40.6 hours to 35.5 hours over the same period.
Most of this is thanks to continued progress in worker productivity. As recently explained by Ferghane Azihari at mises.org, we work less for more as capital accumulation and productivity increases. Obviously, our standard of living is higher than that of our grandparents. And yet, we're often working less than they did.
Moreover, our working lives are shorter than they were in the past.
As Ben Powell has noted in his work on sweatshops on child labor, wealthy countries enjoy the luxury of eschewing child labor nearly in its entirety.
By the 20th century, thanks to increasing productivity, the adult members of the family could produce enough to pay a family's expenses in a way that had previously required the labors of the family's 9- and 10-year-olds.
It was the decline in the necessity of child labor that made it feasible to finally outlaw child labor in wealthy countries in the early 20th century. Today, labor activists act as if laws prohibiting child labor were the primary driver behind its decline. It is far more likely that the opposite is true. Namely, that growing wealth allowed for more children to leave the work force. Prohibitions on child labor came only in the late stages of this process. Powell writes:
And it wasn't just the children who could afford the new luxury of skipping work.
During this same period, the elderly were beginning to enjoy for the first time the concept of “retirement.”
Just as increased productivity had made it possible too for parents to more fully support children with just the parents' wages, so too did these gains make new pension programs — both governmental and private — possible.
After all, the implementation of the Social Security tax would have been a political impossibility in an earlier era when workers were living closer to subsistence levels.Thanks to the surpluses made possible by growing industrialization and worker productivity, both private corporations and government agencies could skim off enough of the surplus to hand over to elderly workers who were no longer actively producing products or services as wage workers.
Thus, like child workers, elderly workers began to disappear from the work force. W. Andrew Achenbaum writes:
Today, not only are modern workers working fewer hours in many cases, but fewer workers are necessary to produce at least as much wealth.
This is especially true when we look at these trends through a global lens. As Powell notes, child labor declines the most in those countries where real incomes exceed $12,000. The number of countries where this is actually the case continues to expand, just as poverty continues to decline in the developing world.
This isn't to say that everything is perfect or getting better in every way all the time. Nor are nbsp;the gains evenly distributed. The relative gains being made in recent decades in the US, for example, have slowed as American workers face greater competition from foreign workers. Gone are the days when the European competition was still digging out from the rubble of World War II. Also gone are the days when workers in places like India and Latin America and China offered little competition. Workers in the Western world once had a near monopoly on the benefits of being in close proximity to the world's best capital — including the best factories and the best technology. Nowadays, highly advanced production facilities can be found throughout the world. And this means more competition from workers in the developed world.
Moreover, continued interventionism by states and their central banks may drive real wages and economic opportunities down. Regulations on starting small business, coupled with central-bank driven asset price inflation, takes its toll on earnings for many throughout the world.
Time will tell if war, unchecked government regulation, or some other disaster may put a halt to the declines in working hours we've been enjoying for so long. If not, our descendants will be looking back on five-day weeks the way we should now look at the grueling work schedules of our great-grandparents.
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