Redistribution of hours?

It seems pretty intuitive that we work for money, otherwise we would work for free, that’s not to say that everyone is miserable at their work but the goal is monetary is it not? So with that said doesn’t it seem strange that the wealthier people are, the more they work? Over the years more and more hours have been allocated to an increasingly smaller proportion of the population. This seems unintuitive…as you gain more economic security… the more work you have to put in to retain it? Does it not make more sense to seek social security(take care of kids, be a good husband, etc) next? It seems we got lost somewhere along the way.

So lets think about this skewed distribution of hours. Do we need more hours to do work because work is getting harder and harder to do? Not likely, technology ensures that we do what used to take hours in fractions of seconds and merely with the touch of a button. So productivity is up, yet real wage stagnation has ensured that in the US people to have work more and more hours to keep up with inflation. In Europe working hours have been reduced but there is still more room for improvement(especially in the UK). So with these facts in mind lets ask some incremental questions.

What is a job? Is it not a function in society that requires a number of hours to (hopefully) achieve a certain GDP output? So lets look at the economy in hourly terms. It seems we have trouble expanding our hours(create new jobs) but reduce our hours with ease(technology). Redistribution of wealth is often attacked because it is said to create moral hazard for those who don’t work. So what about redistribution of hours?

Lets say the economy had a certain number of workers, working 40 hours(the current UK average) and an unemployment rate of 20%(its not as high as it might sound if take into account part timers looking for full time and discouraged workers). What if we could redistribute those hours to those 20% so we could have 32 hour working weeks? This would be an especially effective measure to help people cope with recessionary periods where the unemployment rate rises. In the long run this kind of redistribution will result in there being  less inequality and probably more community involvement.

So what stops this from happening? The main obstacle is that some jobs are very hard to replace so training costs for some companies could dramatically increase. Additionally workers insurance programs will also guarantee an increase in costs, making this a losing proposition from the company’s point of view. This is where government can come in, especially since its mandates(worker’s inurance) discourage this from happening. Government can subsidize companies specifically to just the right amount so this becomes a profitable proposition, something like tax cuts for meeting a certain weekly quota in employee hours.

Some argue an altogether drop in working hours without thinking about GDP, an incentive of that might be more environmentally friendly economy. here‘s a lecture on that if your interested.

Some Answers to my own questions(if you have questions ask them in the comments):

Should this be mandatory?

This should not become a mandate policy because some people just like working and there might not be a reasonable substitute for their work, resulting in a potentially large GDP loss. Some people just don’t value social life as much (Mckinsey employees work 70 hour weeks, though their social work life balance reporting is very low).

Are people potentially equal?

Of course one of the main assumptions is that the people who are unemployed have just as much potential for productivity as those who are not.

What about the minimum wage?

Minimum wage structure creates some complications, especially when calculated in hours(not to mention that its currently probably too low for a reasonable standard of living). However practically this would be overcome by the fact that we would not mandate this policy.

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2 thoughts on “Redistribution of hours?

  1. Interesting post. But isn’t the sociological side a crucial element to consider? Like you mentioned, the people that work longer hours with higher pay, start getting so used to it that it becomes an essential part of their lives. It, if you agree, becomes more than a job, a habit of ease, a reason to make use of their skills that they have accumulated over the years. Following Aristotle’s thoughts on ethics, achieving happiness, not a happiness of the sensual sort but achieving arete of virtues and leading a life of good example, we would be led to making the most of our resources and skills. For these individuals that work long hours, it is what they should do, following that logic. This is, without a doubt, not from an economic point of view. Economics is considered to be a soft science and is influenced by sociocultural factors. Thus requiring us to take into account the attitude and the aptitude of the population segment that the hours could get re-allocated to. Regardless, I found the post to be very interesting and agree with the points you’ve raised. On a different note, I came across another article about a book, which I thought you might be interested in:
    http://www.economist.com/node/21542732

    • I don’t consider momentum to be a valid criticism… we should not keep going just because we’ve been doing it for so long… especially when the alternative solution is more efficient and has a viability that reduces systemic instability. Of course there will be a transition period but that’s not really the task of economics.

      p.s sorry for the late reply

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