|Less Work, More Leisure
By Dean Baker
from Democracy Journal, Winter 2016, No. 39
THE NEXT ADMINISTRATION SHOULD make reducing work time a major focus. In
addition to mandated paid sick days and paid family leave—proposals that
have received some welcome attention thus far on the presidential
campaign trail—policymakers should go much further and enact measures
aimed at shortening workweeks and work years. Reducing our workweek and
work years will lead to a whole host of benefits, including reduced
stress and higher levels of employment.
The United States has become an outlier among wealthy countries in
having had little reduction in the length of the average work year since
1980. According to the OECD, between 1980 and 2013, the number of hours
in an average work year fell by 7.6 percent in Belgium, by 19.1 percent
in France, and by 6.5 percent in Canada. By comparison, it declined by
just 1.4 percent in the United States. The average worker puts in 26
percent more hours a year in the United States than do workers in the
Netherlands and 31 percent more hours than workers in Germany, a
difference of more than 400 hours a year.
This gap is partly due to the fact that every other wealthy country
requires employers to give workers paid family leave and paid sick days.
But an even more important factor in this gap is vacation time. Other
wealthy countries now mandate four to six weeks a year of paid vacation.
Our government, of course, does not mandate any. As a result, 23 percent
of American workers have no paid vacation. Moreover, some European
countries have also taken steps to shorten the workweek, most notably
France, with its 35-hour workweek. Here in the United States, workers
must put in 40 hours to be entitled to any overtime premium, and many
salaried workers can be forced to work even longer hours with no premium.
The lengths of the workweek and work year are not just the result of the
natural mechanisms of the market. The government has had a big thumb on
the scale pushing in the direction of longer work hours by promoting
employer-based benefits, notably health care and pensions, as an
alternative to providing such benefits through the government. These
benefits amount to large overhead costs for businesses that are incurred
on a per-worker basis. As a result, it is often cheaper for an employer
to pay a worker already on staff an overtime premium than it is to incur
the costs of paying for a new worker’s health care and pension.
A more active government push to reduce work time will help counteract
trends that have been hurting workers for decades. In general, higher
productivity has led to higher wages and more leisure. This is the
pattern in the rest of the world and was the pattern in the United
States through much of the last century. But the last four decades have
seen a widening gap between productivity and worker pay and also little
expansion of leisure time. Pushing for shorter work time means workers
can get some of the benefits of productivity growth in the form of more
Reducing the workweek can also have another benefit: It will bring us to
full employment faster. The economic collapse in 2008 and the weakness
of the subsequent recovery have led many economists to recognize that
persistent demand shortfalls—or “secular stagnation”—could be a real
problem. As a logical matter, it is not difficult to overcome a
shortfall in demand; governments just have to spend money. However, the
politics around increased government spending and deficits have been
extremely difficult, and that path seems closed to us.
In this context, policies that seek to reduce supply by getting workers
to put in fewer hours may be the most promising path to full employment.
At the start of the recession in 2008, Germany quite explicitly promoted
a “short work” policy, encouraging employers to cut hours rather than
lay off workers. As a result, the country’s unemployment rate actually
fell during the recession, dropping from 7.2 percent at the end of 2008
to 6.5 percent at the end of 2010.
Critics may say that the government should not be telling employers how
long people should work. But that ignores all the government policies
that pushed in the direction of longer hours. This idea is really just
an effort to level out the incentive structure. Others argue that
workers can’t afford to work fewer hours. That is undoubtedly true in
many cases, but nothing will prevent workers from seeking additional
hours of employment, though admittedly some may find it difficult to
make up for lost pay. Still, missing a few hours is better than being
The best path to ensure that workers can secure a share of the gains in
economic growth is a full-employment economy, like the one we saw in the
late 1990s. Shortening work time is not just good, family-friendly
policy—it might be the quickest path to full employment.