Today's Opinions, Tomorrow's Reality
The Curse of Overemployment
By David G. Young
Washington DC, September 8, 2009 --
Americans who fret about the plight of the underemployed would be wise to reconsider where the problem really lies.
"Jobless Recovery" was the headline last week after the release of America's new employment numbers and corporate earnings reports. Not only is unemployment up, reporters told us, but underemployment is growing, too. The average weekly hours worked had dropped to 33.1 hours per week, according to numbers released last week by the Bureau of Labor Statistics.1
This latter statistic was decried by a Wall Street Journal editorial as "abysmally low" and "putting a strain on family budgets."2 A writer for Bloomberg News warned that this number is the "lowest since records began in 1964."3
The spinning of this number is a stunning example of statistical abuse. In reality, the length of hourly workers' weeks has been declining steadily since the statistic was first gathered (see chart), and record lows are often logged in good times -- most recently in August of 2005 near the peak of the housing bubble.4
If this decline in work hours were not accompanied by rising incomes, shorter work hours might be cause for concern. But over the long term, that simply is not the case. In the period since 1984, inflation adjusted wages of hourly workers have grown faster (8.4 percent) than hours worked have declined (6 percent).5 Since these workers are making more despite working fewer hours, a declining workweek is hardly a cause for concern.
This is for the long term. In the short term, there is often a sharp and temporary dip in the number of hours worked during a recession, and a rise in numbers is an indicator that the recession is over. This is why these numbers are given so much attention toward the end of recessions. But this short-term blip has nothing to do with the long-term downward trend. While hours worked typically rise at the end of a recession, they often don't return to the levels seen before the recession, also due to this long-term downward trend. This is actually a good thing.
Rather than complaining that Americans are working fewer hours than any time since 1964, we should celebrate that incomes are rising enough to allow them to do so. People often toiled for extremely long hours before unions and the government standardized the workweek at 40 hours during the Great Depression. And while America's recession has certainly caused a fair amount of economic pain, we should welcome the fact that American post-recession workweeks will likely be shorter than before the recession began.
Unfortunately, not everybody has been invited to the short workweek celebration. The figures discussed above are for what the Labor Department calls "production or non-supervisory workers" -- essentially the working class. Amongst professionals, there is no evidence that hours have declined over recent decades. While no statistics are regularly gathered, a one-time 2001 Census Bureau Survey confirmed that many professionals work over 40 hours per week: 46.3 hours for physicians, dentists and veterinarians, 44.3 hours for lawyers and judges, 41.6 hours for executives, and 40.7 and 40.5 hours for natural scientists and engineers, respectively.6
Given that the salaries of American professionals have grown even faster than the 40 percent increase in median income since 19647, it is surprising that there has been no corresponding movement toward working fewer hours since before the Second World War. Why has the average professional workweek not gone down by, say, 20 percent, from five days to four days, when productivity increases would certainly allow it with ample room for rising incomes?
The answer, it seems, is that most Americans simply don't want to work fewer hours. Despite widespread anecdotes about working mothers desperate for more free time, surveys show that very few people are willing to work less for less income. In the 2001 Census Bureau survey, only 6.9 percent of people said they wished for less work for less money (the self-described overemployed), compared to 27.3 percent who said they preferred more work for more money (the underemployed).8
These sentiments are confirmed by Americans behavior with their vacation days. Last year, 34 percent chose to forfeit some of their vacation days (often with the expressed purpose of trading them for money), despite the fact that Americans receive far fewer vacation days on average (13) compared with people in continental Europe (25 or more).9
This is not a healthy way to live. As American society grows ever richer, it is bizarre to think that the accumulation of wealth and material goods will always be preferable to having more free time to enjoy the pleasures of life. By any historical standard of affluence and work hours, the vast majority of Americans are extremely overemployed. Yet so long as American culture is in tune with editorialists and writers who consider a 33 hour work week "abysmally low," Americans will remain saddled with the curse of overemployment.
Related Web Columns:
Enter the Worker Drones, August 5, 2003
Making Jack a Dull Boy, September 5, 2000
1. Bureau of Labor Statistics, Employment, Hours, and Earnings From the Current Employment Statistics Survey (National), September 7, 2009
2. Wall Street Journal, The Jobless Stimulus, September 5, 2009
3. Bloomberg News, U.S. Recovery Leaving Workers Jobless May Spur Company Profits, September 5, 2009
4. BLS, Ibid.
5. Bureau of Labor Statistics, Average Hourly Wages of Production Workers in Constant 1982 Dollars, September 7, 2009
6. Monthly Labor Review, Overemployment Mismatches: The Preference for Fewer Work Hours, April 2007
7. U.S. Census Bureau, Regions of People by Median Income and Sex: 1953 to 2007, June 2009 (Weighted average of male and female combined wages in 1964: $19,383, compared with 2007: $27,046 in 2007 dollars shows a 40 percent increase.)
8. Monthly Labor Review, Ibid.
9. Expedia.com, 2009 International Vacation Deprivation Survey Results, April 15, 2009