The Unassuming Economist

From a new Conversable Economist post by Timothy Taylor:

“The biggest European union has managed to achieve a long-standing goal: German metal-workers can now work a 28-hour week, if  they wish. […] What do German employers get out of this deal? They get flexibility, in the sense that if some workers want to work longer hours, the firm can hire them to do so. Furthermore, Pencavel argues that for many workers, labor exhibits diminishing marginal productivity over the work-week: that is, the 25th hour worked in a week is on average more productive than the 35th or the 45th hour worked. Thus, employers will be getting the more productive hours from workers, for the same hourly pay.”

“Does a drive for lower hours have any resonance in the US economy? Pencavel points out that in the US labor market, weekly hours worked dropped sharply in the decades leading up to 1930 or so, but since then, the decline has largely stopped. (And for the record, American unions in certain induistries remained quite powerful in the 1950s and 1960s, and they might well have succeeded in pushing for lower weekly hours if it had been a priority for them.)”

“Here’s a different figure, not from Pencavel’s brief, showing average weekly hours for production and nonsupervisory workers in all industries, not just manufacturing. This average includes part-timers.  This shows an ongoing drop over time, although it may have levelled out around the year 2000.  Specifically: “Average weekly hours relate to the average hours per worker for which pay was received and is different from standard or scheduled hours. Factors such as unpaid absenteeism, labor turnover, part-time work, and stoppages cause average weekly hours to be lower than scheduled hours of work for an establishment. …  Average weekly hours are the total weekly hours divided by the employees paid for those hours.””

“It’s an interesting Labor Day question as to how many US workers would we willing to make the tradeoff of lower hours for less total income (assuming they would not see diminished job security as a result). From a US context, one interesting pattern is that lower-wage workers used to be the ones who on average worked the longest hours, but now it’s higher-wage workers. “