The Workweek Reduction Equivalent: a measure of potential economic progress

Erik Rauch

Every quarter, government statisticians announce how much productivity has been increasing. This is measured in GDP per hour worked. Because there is no longer a correlation between income and individuals' satisfaction, a more relevant statistic is called for.

The Workweek Reduction Equivalent uses the same data, but presents it in a more meaningful way. It is the number of weekly hours that an average full-time worker could reduce his workweek, if productivity were applied to time rather than increased GDP.

For instance, output per hour in the US increased 4.5% in 2003, as calculated by the US Bureau of Labor Statistics. At an average workweek of 45 hours, the WRE is 2.0 hours - just for a single year. 2003 was higher than most years, but the average recently has been 1.2 hours per year. Over even just a decade, this really adds up.

This table shows productivity increase and WRE for recent years:
1996     2.8%     1.2 hours
1997     2.3%     1.0 hours
1998     2.6%     1.1 hours
1999     2.6%     1.1 hours
2000     3.0%     1.3 hours
2001     1.1%     0.5 hours
2002     4.8%     2.1 hours
2003     4.5%     2.0 hours

Of course, what productivity really measures is another issue - not all increases in GDP are good - but, like other alternate economic measures such as the 'Genuine Progress Indicator', the WRE could be a constant reminder of our misplaced priorities. 

Source: http://groups.csail.mit.edu/mac/users/rauch/worktime/wre.html

Productivity and the Workweek

Erik Rauch

What if, instead of using productivity increases to buy more possessions, we used them to get more time instead?

Productivity has been increasing exponentially for more than a century. This is one of the most remarkable developments of all time. Until a few decades ago, this bounty has been used both for increased material comfort and for more time. However, in recent decades, the increase has been used exclusively to purchase more things; hours have actually increased in the US. Meanwhile, there has been little increase in subjective well-being in developed countries in recent decades. 
An average worker needs to work a mere 11 hours per week to produce as much as one working 40 hours per week in 1950. (The data here is from the US, but productivity increases in Europe and Japan have been of the same magnitude.) The conclusion is inescapable: if productivity means anything at all, a worker should be able to earn the same standard of living as a 1950 worker in only 11 hours per week. The following shows the number of hours per week needed to produce as much as a 1950 worker, using data from theUS Bureau of Labor Statistics, including both manufacuring and services:

 

Number of hours per week needed to produce as much as a 40-hour worker in 1950

In other words, the number of weekly hours needed to produce the 1950 worker's output declined by almost one hour per year until the mid-1970's, and has been declining by about half an hour per year since then.

Polls and surveys have shown that people in countries with the standard of living that the US enjoyed in the 1950's are no less satisfied than today's Americans. Indeed, many studies show that income increases people's subjective well-being only up to the point where basic needs are met. However, productivity has increased so much that we can have both the extra possessions and the extra time. Even since 1975, supposedly an era of low productivity growth and stagnation in living standards, officially measured productivity has increased almost 70%. The average worker would therefore need to work only 23 hours per week to produce as much as one working as recently as 1975:

 

Number of hours per week needed to produce as much as a 40-hour worker in 1975

And, if the productivity measures have any meaning, the average worker could have a 29-hour workweek if he were satisfied with producing as much as a 40-hour worker as recently as 1990.

Fast productivity growth is not necessary for reduced work time

Much is made of the rate of productivity growth and its relationship to worker well-being. Overlooked is a much more important fact: because productivity has been growing for so long, it is now so high that it can enable us to sharply reduce working hours while maintaining a high material standard of living. The most important thing is not how fast productivity is growing, but that it is already high enough. We don't need to wait for future productivity increases: the necessary increases have already happened.

Shorter hours and the notion of progress

Interestingly, as an article on labor history notes, shorter hours were assumed to be a natural consequence of increased productivity in the US until the 1930's, appearing in the platforms of all major parties, and the above shows how the workweek would have evolved had the trend continued after World War II. In Europe, reduced worktime has continued to be an issue, and the workweek has been declining in recent times, unlike in the US. However, even in Europe, the decline in work time has fallen far behind the increase in productivity.

Who benefits from productivity increases

According to official statistics, "labor's" share of national income in the US has remained constant over the last 50 years. "Labor", however, includes everyone up to Bill Gates. The troubling increase in income inequality in the United States means that many people do not share in the benefits of productivity increases. However, the potential is there. Furthermore, the increase in inequality is mainly an American phenomenon: it has not occurred, or has occurred on a much smaller scale, in other advanced countries.

Conclusion

The march of productivity is such that its increase in even as short a time span as a decade could be used to dramatically reduce working hours while living standards remained constant. 
 

Postscript

How long can the growth continue? Even if the supposedly slow rate of increase in recent times were continued, productivity would increase 120% in the next 50 years, and a 2050 worker would need to work 15 hours to have the same real income as a 1990 worker (or less than 6 hours to have the same income as the 1950 worker):
 
Output per hour, projected based on 1975-2000 rate of increase; 1995 = 100
Of course, here we may have stretched the usefulness of the official definition of productivity much too far, and exponential growth cannot continue forever, but however productivity is measured, the increase and its relationship to the potential for workweek reduction is too big to ignore. 

Source: http://groups.csail.mit.edu/mac/users/rauch/misc/worktime/

Pre-industrial workers had a shorter workweek than today's

from The Overworked American: The Unexpected Decline of Leisure, by Juliet B. Schor

The labouring man will take his rest long in the morning; a good piece of the day is spent afore he come at his work; then he must have his breakfast, though he have not earned it at his accustomed hour, or else there is grudging and murmuring; when the clock smiteth, he will cast down his burden in the midway, and whatsoever he is in hand with, he will leave it as it is, though many times it is marred afore he come again; he may not lose his meat, what danger soever the work is in. At noon he must have his sleeping time, then his bever in the afternoon, which spendeth a great part of the day; and when his hour cometh at night, at the first stroke of the clock he casteth down his tools, leaveth his work, in what need or case soever the work standeth.         -James Pilkington, Bishop of Durham, ca. 1570

One of capitalism's most durable myths is that it has reduced human toil. This myth is typically defended by a comparison of the modern forty-hour week with its seventy- or eighty-hour counterpart in the nineteenth century. The implicit -- but rarely articulated -- assumption is that the eighty-hour standard has prevailed for centuries. The comparison conjures up the dreary life of medieval peasants, toiling steadily from dawn to dusk. We are asked to imagine the journeyman artisan in a cold, damp garret, rising even before the sun, laboring by candlelight late into the night.

These images are backward projections of modern work patterns. And they are false. Before capitalism, most people did not work very long hours at all. The tempo of life was slow, even leisurely; the pace of work relaxed. Our ancestors may not have been rich, but they had an abundance of leisure. When capitalism raised their incomes, it also took away their time. Indeed, there is good reason to believe that working hours in the mid-nineteenth century constitute the most prodigious work effort in the entire history of humankind.

Therefore, we must take a longer view and look back not just one hundred years, but three or four, even six or seven hundred. Consider a typical working day in the medieval period. It stretched from dawn to dusk (sixteen hours in summer and eight in winter), but, as the Bishop Pilkington has noted, work was intermittent - called to a halt for breakfast, lunch, the customary afternoon nap, and dinner. Depending on time and place, there were also midmorning and midafternoon refreshment breaks. These rest periods were the traditional rights of laborers, which they enjoyed even during peak harvest times. During slack periods, which accounted for a large part of the year, adherence to regular working hours was not usual. According to Oxford Professor James E. Thorold Rogers[1], the medieval workday was not more than eight hours. The worker participating in the eight-hour movements of the late nineteenth century was "simply striving to recover what his ancestor worked by four or five centuries ago."

An important piece of evidence on the working day is that it was very unusual for servile laborers to be required to work a whole day for a lord. One day's work was considered half a day, and if a serf worked an entire day, this was counted as two "days-works."[2] Detailed accounts of artisans' workdays are available. Knoop and jones' figures for the fourteenth century work out to a yearly average of 9 hours (exclusive of meals and breaktimes)[3]. Brown, Colwin and Taylor's figures for masons suggest an average workday of 8.6 hours[4].

The contrast between capitalist and precapitalist work patterns is most striking in respect to the working year. The medieval calendar was filled with holidays. Official -- that is, church -- holidays included not only long "vacations" at Christmas, Easter, and midsummer but also numerous saints' andrest days. These were spent both in sober churchgoing and in feasting, drinking and merrymaking. In addition to official celebrations, there were often weeks' worth of ales -- to mark important life events (bride ales or wake ales) as well as less momentous occasions (scot ale, lamb ale, and hock ale). All told, holiday leisure time in medieval England took up probably about one-third of the year. And the English were apparently working harder than their neighbors. The ancien règime in France is reported to have guaranteed fifty-two Sundays, ninety rest days, and thirty-eight holidays. In Spain, travelers noted that holidays totaled five months per year.[5]

The peasant's free time extended beyond officially sanctioned holidays. There is considerable evidence of what economists call the backward-bending supply curve of labor -- the idea that when wages rise, workers supply less labor. During one period of unusually high wages (the late fourteenth century), many laborers refused to work "by the year or the half year or by any of the usual terms but only by the day." And they worked only as many days as were necessary to earn their customary income -- which in this case amounted to about 120 days a year, for a probable total of only 1,440 hours annually (this estimate assumes a 12-hour day because the days worked were probably during spring, summer and fall). A thirteenth-century estime finds that whole peasant families did not put in more than 150 days per year on their land. Manorial records from fourteenth-century England indicate an extremely short working year -- 175 days -- for servile laborers. Later evidence for farmer-miners, a group with control over their worktime, indicates they worked only 180 days a year.

Sources

[1] James E. Thorold Rogers, Six Centuries of Work and Wages (London: Allen and Unwin, 1949), 542-43.

[2] H.S. Bennett, Life on the English Manor (Cambridge: Cambridge University Press, 1960), 104-6.

[3] Douglas Knoop and G.P. Jones, The Medieval Mason (New York: Barnes and Noble, 1967), 105.

[4] R. Allen Brown, H.M. Colvin, and A.J. Taylor, The History of the King's Works, vol. I, the Middle Ages (London: Her Majesty's Stationary Office, 1963).

[5] Edith Rodgers, Discussion of Holidays in the Later Middle Ages (New York: Columbia University Press, 1940), 10-11. See also C.R. Cheney, "Rules for the observance of feast-days in medieval England", Bulletin of the Institute of Historical Research 34, 90, 117-29 (1961).

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Eight centuries of annual hours

13th century - Adult male peasant, U.K.: 1620 hours

Calculated from Gregory Clark's estimate of 150 days per family, assumes 12 hours per day, 135 days per year for adult male ("Impatience, Poverty, and Open Field Agriculture", mimeo, 1986)

14th century - Casual laborer, U.K.: 1440 hours

Calculated from Nora Ritchie's estimate of 120 days per year. Assumes 12-hour day. ("Labour conditions in Essex in the reign of Richard II", in E.M. Carus-Wilson, ed.,Essays in Economic History, vol. II, London: Edward Arnold, 1962).

Middle ages - English worker: 2309 hours

Juliet Schor's estime of average medieval laborer working two-thirds of the year at 9.5 hours per day

1400-1600 - Farmer-miner, adult male, U.K.: 1980 hours

Calculated from Ian Blanchard's estimate of 180 days per year. Assumes 11-hour day ("Labour productivity and work psychology in the English mining industry, 1400-1600",Economic History Review 31, 23 (1978).

1840 - Average worker, U.K.: 3105-3588 hours

Based on 69-hour week; hours from W.S. Woytinsky, "Hours of labor," in Encyclopedia of the Social Sciences, vol. III (New York: Macmillan, 1935). Low estimate assumes 45 week year, high one assumes 52 week year

1850 - Average worker, U.S.: 3150-3650 hours

Based on 70-hour week; hours from Joseph Zeisel, "The workweek in American industry, 1850-1956", Monthly Labor Review 81, 23-29 (1958). Low estimate assumes 45 week year, high one assumes 52 week year

1987 - Average worker, U.S.: 1949 hours

From The Overworked American: The Unexpected Decline of Leisure, by Juliet B. Schor, Table 2.4

1988 - Manufacturing workers, U.K.: 1856 hours

Calculated from Bureau of Labor Statistics data, Office of Productivity and Technology

Source: http://groups.csail.mit.edu/mac/users/rauch/worktime/hours_workweek.html