How Much Is Enough? Why Do We Work So Much and Enjoy So Little Leisure?
Robert Skidelsky is best known for his definitive three-volume biography of John Maynard Keynes. It hardly surprising, then, that he begins his latest book, How Much is Enough? (co-authored with his son, the philosopher Edward Skidelsky), with a puzzle posed by the master himself. Why is it that we work so many hours each week and enjoy so little leisure?
Keynes’ “mistaken” prediction
In 1928, Keynes gave a talk to a group of Cambridge undergraduates on the theme, “The Economic Possibilities for our Grandchildren.” Eschewing models and data, his message was that if people were wise enough to avoid ruinous wars, those living a hundred years in the future would enjoy a standard of living four to eight times higher than those living in 1928. Here are some key passages that catch the flavor of his remarks:
We may be on the eve of improvements in the efficiency of food production as great as those which have already taken place in mining, manufacture, and transport. In quite a few years—in in our own lifetimes I mean—we may be able to perform all the operations of agriculture, mining, and manufacture with a quarter of the human effort to which we have been accustomed. . . .
Thus for the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well. . . .
Three-hour shifts or a fifteen-hour week . . . is quite enough to satisfy the old Adam in most of us!
As the Skidelskys note, we are pretty nearly on target for the standard of living that Keynes forecast, yet, they say, he was mistaken about the amount of work. “The central puzzle remains: we in the rich world are four or five times better off on average than we were in 1930, but our average hours of work have fallen only a fifth since then.” They supported this passage with a chart showing that weekly hours worked, which, by Keynes’ estimate, should have fallen from fifty to about eighteen by now, are still stuck at forty.
The Skidelskys review three possible explanations:
- First, that people take joy in their work. They find that plausible for artists, skilled artisans, and authors but not for most people.
- Second, that the capitalist system forces people to work because employers, not workers, get to call the tune. They approvingly quote sociological theories supporting that view, but in the end, they do not find it entirely persuasive.
- Third, that wants are insatiable. Although that sometimes seems to be the case, they think that insatiability is not a fixed feature of human nature, but a flaw of our economic system. Keynes, they say, “did not understand that capitalism would set up a new dynamic of want creation that would overwhelm traditional restraints of custom and good sense. . . . Capitalism has achieved incomparable progress in the creation of wealth , but has left us incapable of putting that wealth to civilized use.”
Each of these three explanations may contain a grain of truth, but it seems to me there is another, much simpler explanation: Maybe Keynes was right after all.
The sense in which Keynes’ prediction was correct
Let’s take another look at Keynes’ prediction. He, and the Skidelskys also, focus largely on people’s demand for material goods. When Keynes spoke of a four-fold or more increase in productivity, it was in reference to,“the operations of agriculture, mining, and manufacture.” When the Skidelskys disparagingly catalog the insatiable wants of our capitalism-corrupted contemporaries, they, too, focus on material goods. “A trip to the seaside or holiday resort,” they write in a typical passage, “becomes incomplete without barbecue, windbreaks, wetsuits, surfboards, tennis rackets, footballs, beach balls, and golf clubs.”
Yet the surprising fact, unnoticed by the Skidelskys, is that we already spend less than 15 hours a week, on average, working in the areas of agriculture, mining, and manufacture. In that sense, Keynes’ prediction has already come true, fifteen years ahead of schedule. Let’s look at some numbers.
First, it turns out that in the United States, goods-producing industries, including mining, logging, manufacturing, and construction, account for just 13.7 percent of all nonfarm payroll jobs. Add in the 1.5 to 2 percent of the labor force that is engaged in farming, and we can round that up to about 15.5 percent. Workers in goods-producing industries work about forty hours per week on average, which is about five hours a week longer than the average for the labor force as a whole. If we adjust for the longer hours, it appears that goods production accounts for about 17.7 percent of all hours worked. If we take 17.7 percent of the average workweek of 35 hours, we come to the surprising conclusion that on average, each working American already spends just 6.2 hours a week producing the products of agriculture, mining, and manufacturing, with construction thrown in for good measure.
But, you may say, isn’t that just because so many of the goods that Americans consume are produced in China and elsewhere? Fair enough. Let’s do the numbers a different way that captures imports and exports.
Instead of starting with employment, let’s look at data for GDP. Consumer goods (including durable and nondurable, farm and nonfarm, but excluding services) account for 25.5 percent of U.S. GDP. That includes consumption of imported goods. (Imports of goods are equal to 13.5 percent of U.S. GDP and exports of goods to 9.4 percent, making net imports, including both consumer and non-consumer products, equal to about 4.1 percent of GDP.) Let’s suppose that Americans were to produce all goods consumed in the United States, at an average level of productivity, and at the same time were to drop production of goods for export. Even so, it would still only take 9 hours of our average 35-hour week to meet our demand for consumer goods in full–well below Keynes’ prediction of “three hours a day to satisfy the old Adam in most of us.”
These numbers cast a different light on the puzzle of leisure. The question is not why we spend so many hours a week producing wet suits and golf clubs that we don’t really need. The fact is that goods production doesn’t really occupy much of our working time. The puzzle, instead, is what is important enough to occupy the rest of our working hours, rather than devoting more of them to leisure?
Working to provide government services
A big part of the answer is that many of those hours go to pay for the services of government. Even in the United States, and more so in the UK, we expect far more of government now than in 1928. In terms of nonfarm payroll, government jobs account for 16 percent of U.S. employment, which is a little more than the total for all goods-producing jobs. By itself, that suggests that government workers account for about 5.6 hours out of the average workweek.
However, just counting the hours of government employees understates the amount of time we work to pay for services of government. Many government services are performed by private contractors, especially in the case of the federal government, which accounts for only 7 percent of payroll jobs. Three other numbers can give us a better perspective.
One such number is government consumption expenditures and gross investment, a line item in the national accounts that equals 18 percent of GDP. That item includes the salaries of civil servants, those of government contractors, and all of the goods purchased by government. If we convert that to a share of the average workweek, we are up 6.3 hours.
A second way to look at the matter is to ask how many hours a week we need to work to pay taxes. Tax revenues at all levels of government account for about 29 percent of GDP in the United States, or about ten of our average weekly working hours.
A still broader measure is total government expenditures, including transfer payments as well as government consumption and gross investment. Government expenditures at all levels amount to about 40 percent of US GDP. Arguably, someone needs to work to pay for all of that, even the part that is, in any given year, financed by borrowing rather than by taxes. By the total expenditure measure, it would be reasonable to say that on average, 14 hours of work a week go to pay for the services we get from government.
We could, of course, free up more time for leisure if we accepted a smaller government, but that is another discussion for another time. In any event, the Skidelskys, whose politics run to the left of center, do not put much of a priority on downsizing government.
What do we do with the rest of our time?
We have now accounted for about 23 hours of our average 35-hour workweek—nine to produce goods and 14 to pay for government services. What do we do with the other twelve hours instead of taking more leisure?
Clearly, we work some of those hours in order to pay for services that we could reasonably consider as necessities, but that are not provided by government. In the United States, the biggest item in that category would be medical services, including opticians and dentists as well as doctors and hospitals. Many families, although not all, also view higher education as an expensive necessity. Suppose, for the sake of discussion, we assume that paying for service necessities requires another four hours of work per week. That still leaves eight hours, or one full working day, that we could devote to leisure if we chose. Why don’t we?
A good starting point for answering that question is to think more closely about what we mean by leisure. The Skidelskys have some fairly specific ideas. They are dismissive of mere rest and relaxation. They think that activities that are undertaken instrumentally, like jogging to lose weight rather than for the pure joy of it, don’t count, either. They are positively disdainful of watching television and getting drunk.
They put creative activities at the top of their list—sculpting, playing in an orchestra, painting, or writing, whether poetry or popular books on the economics of leisure. They regard those activities so highly that they count them as leisure even if they are done for pay. (That neatly gets them personally off the hook in case anyone were to find them spending too many hours at the office or the keyboard.) Not wanting to sound too highbrow, they also approve of playing football in the park, making one’s own furniture, and playing the guitar with friends.
Few, if any, of these activities are purely solitary. A painter might work alone in her studio, but unless she is a very odd artist indeed, some of her pleasure in painting comes from other peoples’ enjoyment of what she puts on canvas. The singer wants someone to listen, the writer wants a reader, and the cooking enthusiast wants someone with whom to share the meal. Although you can walk on the beach by yourself, you can’t play football alone, and bridge with your friends at the local club is more fun than playing alone against the computer.
If I look at these leisure activities through my econoscope, what I see is an exchange of leisure services:
- John views and appreciates Maria’s paintings
- Maria eats and enjoys Howard’s cooking
- Howard watches and cheers for John’s football team, and so on.
I enthusiastically agree with the Skidelskys that those are hours well spent, and that people who work so much they don’t have time for them are missing out on some of the best things in life. But, as much as we enjoy these activities, there are other ways to enjoy them that add to the total number of recorded labor hours rather than to the recorded number of leisure hours. For example:
- John might appreciate Maria’s talented amateur paintings even more, and Maria might paint even better, if both of them spent some time viewing professional and classical works in a museum, for which they would need to work enough to buy a ticket, or, if it is a state museum with free admission, to pay taxes.
- Maybe Maria and Howard both love to eat, but neither likes to cook, so they prefer fine dining at a local restaurant even though that means working more to pay off the resulting credit card balance.
- Very likely John, as an amateur football player, would enjoy his play even more if he went to see a professional game now and then, even though doing so requires a ticket bought at the expense of paid work.
All of these things are leisure, and all of them involve an exchange of services, but now the exchange is market mediated. The Skidelskys seem to frown on that because the painter, the cook, and the football players are all punching a time clock and drawing a paycheck. Honestly, though, why is it bad? If we had to depend entirely on art, food, and entertainment produced by amateurs would we really be better off? If Pavarotti had sung only for his friends, after dinner, would we really be living more exalted, noble, and civilized lives? I can’t see that we would.
Resolving the puzzle
Here, then, is how I resolve the puzzle posed by Keynes’s “mistaken” prediction of a 15-hour work week:
First: Keynes was right in thinking that his grandchildren would be able to satisfy their demands for the products of agriculture, mining, and manufacturing with a 15-hour workweek. In fact, we are already doing a good deal better than that.
Second: Being able to put our enhanced capacity to create wealth to “civilized use,” as the Skidelskys put it, requires that we live under a civilized government. Regrettable though it is, we have to devote some hours of toil to pay the taxes needed to support it.
Third: In addition to working to buy the material necessities of life, we work to buy necessary services, such as education and medical care, that we cannot reasonably provide for ourselves.
Fourth: After accounting for the time spent on production of goods, paying taxes, and buying necessary services, we have, by my calculation, about eight hours out of a standard forty-hour workweek that we could realistically devote to leisure if we chose to do so. Here is what my preference would be for using those hours: Take every other Friday off and play football in the park or fool around in the kitchen trying a new recipe. Use the working Fridays to earn money to indulge in some market-mediated leisure, say, watching a professional team play your favorite sport or dining out in a good restaurant.
That is what I would call, to use Keynes’ phrase, living wisely and agreeably and well. It comes out to about 35 hours a week—and oh, guess what? That’s just our national average.
Leisure is only one of many themes discussed in How Much is Enough? For more, see the second part of my review,“Growth, Public Policy, and the Economics of the Good Life.”
24 Responses to “How Much Is Enough? Why Do We Work So Much and Enjoy So Little Leisure?”
France beat us to the post and the UMP is doing its very best to undo it.
The Skidelskys endorse compulsory short-hours legislation, like that in France. I plan to comment on that in the second half of my review
Do trends in the distribution of wealth play a role in this?
Nearly half of U.S. citizens are in households that have little savings and low income, therefore they view work as an imperative, they need more of it and higher pay. They are far from the Keynes' prediction about leisure. Your analysis applies to the other half.
The lower-saving half of U.S. households own only 1.1% of all private net worth, and by my calculation that is roughly $11,000 per household, while the average net worth for all households is $498,000. And as far as liquid assets goes, 44% (about 140 million Americans) live in families with less than 3 months of expenses saved, that's less than $6,000.
Source: Congressional Research Service, http://www.fas.org/sgp/crs/misc/RL33433.pdf, and the Survey of Consumer Finances, page 17, http://www.federalreserve.gov/pubs/bulletin/2012/… —
Income data — half of households, 52.7% of households, take in 17.1% of all personal income — source: Congressional Joint Committee on Taxation, page 28. http://www.novoco.com/hottopics/resource_files/jc…
And the lower-earning half of U.S. workers, 75 million workers, earn less than 7% of total personal income the economy generates, less than $800 billion while total personal income is around $11.5 trillion or more. The average income among the lower-earning 75 million is less than $11,000 a year. SSA report on wage income: http://www.ssa.gov/cgi-bin/netcomp.cgi?year=2011, Personal income: page 28,
I find Ed Dolan's articles very informative and interesting, I seem to present bothersome critiques though when I comment. I live and work in the lower-saving half, that's my excuse.
Here's a tidbit from the Time Use Survey, bls,: On an average day, nearly everyone age 15 and over engaged in some sort of leisure activity (95
percent), such as watching TV, socializing, or exercising. Of those who engaged in leisure activities, men spent more time in these activities (5.8 hours) than did women (5.2 hours). (See table 1.)
Watching TV was the leisure activity that occupied the most time (2.8 hours per day), accounting for about half of leisure time, on average, for those age 15 and over. Socializing, such as visiting with friends or attending or hosting social events, was the next most common leisure activity, accounting for nearly three-quarters of an hour per day. (See table 1.) http://www.bls.gov/news.release/pdf/atus.pdf
I think it is much easier to say that he just underestimated the strength of the income effect. Considering there was little data at the time for him to base his estimate on, it isn't that surprising.
Whoops…. I mean overestimated, not underestimated.
Maybe people work the hours they do, even though they might not "need to" looking at their annual income, because they can't count on earning the same income for enough years to have enough in the bank to retire. Make hay while the sun shines, as it were.
The Skidelskys think so. In parts of the book not covered in this review, they emphasize that a lot of the drive to increase one's income has to do with status spending and relative income. They think increasing inequality intensifies these forces.
I think the time use survey is a font of information. It is too bad the Skidelskys didn't look at it. They don't seem to talk much about housework, yardwork, etc. that is neither paid work nor "leisure" in their somewhat highbrow sense.
But the answer is even simpler. It's entirely natural for people to always want more. Yesteryear's ordinary folk wanted to live like yesteryear's rich folk. Today's ordinary folk want to live like today's rich folk. Will productivity ever increase so fast that ordinary folk can have as much as they want while working much less? I don't know, but definitely not anytime soon.
Indeed, Keynes comes off as very callous towards ordinary Britons and how little they had in his day. He really imagined that with increased productivity they wouldn't want more? Bizarre. The Skidelskys come off as simply crusty and unappreciative of the newfangled.
You wildly exaggerate how much less of our activity is spent producing material goods. You follow a very popular misunderstanding, which arises from misconstruing the growing portion of income allocated to activity defined as service. Most such service activities are part of the production and distribution chain of material goods (professional services, trade, transportation, utilities). The shift you are describing is mainly a shift in how income from production and distribution of material goods is allocated, towards the non-manufacturing portions of the production and distribution chain. It's also a result of running a trade deficit and of offshoring of manufacturing by US producers.
There have been some real shifts. Education, which is almost purely personal service, and health care, a mix of personal service and material goods (eg cat scanners), are much more broadly accessible, and the latter especially consumes a growing share of GDP. Increasingly complex goods are increasingly likely to be bundled with expert piloting or assistance or at least minimal call center technical support. An increasing portion of wealth is made up of network connectivity, which is not quite a "material" good but is arguably more akin to power or fuel than it is to a personal service like education.
Madonna had it right, we are living in a material world.
Many good comments above, but also, a really deep misunderstanding of human and labor dynamics.
How do you get to be well off enough to afford working 32 or 16 hours per week while carrying on a "normal" lifestyle? You have and have a reputation for passion at work. And so to be rich enough not to work you must love to work.
Among those of pre-retirement age, who has the most time "unemployed" (by most any definition?) The poor.
Limiting hours likely wouldn't change the dynamic very much, because such large parts of the money (and I suppose "unclaimed" "leisure") are in the hands of the salaried, self employed, and so on.
By the way, I've done more than well enough to purchase "professional" music, art, etc., and rather than be "enriched" in such a way I'd basically rather watch paint dry. The Skidelsky's miss that relatively few people actually care much about what they call "leisure".
Income and wealth inequality are the main reasons I think. Time is distributed absolutely equally through the population – the richest person and the poorest each have 24 hours per day to use. However, when wealth and income are distributed inequally, there end up being a few people at the top who have an excess of potential leisure time, but a much larger number of people at the bottom who can't afford to work less time. In other words, to pay for the "necessities of life" requires some particular level of income (maybe this varies due to cultural factors). People below this level cannot sacrifice work time for leisure. People above may do so – whether it is for "pure" leisure activities or greater consumption of services. Those providing the paid services are of course working. But with a highly unequal income distribution the amount of "leisure time" gained by the rich minority is greatly smaller than the amount of "work" required by all those who must keep working.
Another point that was not touched on is the impact of increasing housing costs. The ratio of house price to income level has increased over the previous few decades, and so people without accumulated wealth (ie most people) are required to work longer simply to afford somewhere to live.
"the Skidelskys disparagingly catalog the insatiable wants of our capitalism-corrupted contemporaries"
The Skidelskys should give up Marx and focus on Downton Abbey. That would've been Keynes advice to the entire Jewish Left.
You raise some good points here:
(1) I agree with you about K & S and their sometimes condescending attitudes.
(2) You write "You follow a very popular misunderstanding, which arises from misconstruing the growing portion of income allocated to activity defined as service. Most such service activities are part of the production and distribution chain of material goods (professional services, trade, transportation, utilities). "
You have a point here, which is why we need to look both at employment and at GDP data. Yes, the employment data could understate the percent of hours worked in goods-producing industries if there were an increase in outsourcing to professional service contractors. However, the GDP data count only final goods, so they are not subject to that bias. Also, the GDP figures for, say, consumer goods include imported goods, so they are not distorted by trade deficits or off-shoring. I think, then, that we could regard the employment data as a lower-bound estimate of the share of goods production and the GDP data as an upper-bound estimate.
(1)You say: "How do you get to be well off enough to afford working 32 or 16 hours per week while carrying on a "normal" lifestyle? You have and have a reputation for passion at work. And so to be rich enough not to work you must love to work. "
This is a question that I hope to address in a future installment on the Skidelskys. My short answer is that there are more people out there than you might think who have downscaled their lifestyles to allow them to work less. In the small community where I live, there are people who have chosen to live in, say, a boat, a yurt, or a school bus and do just odd jobs and enjoy a lifestyle that includes a lot of loafing and socializing, some dabbling with pottery maybe, maybe some volunteer work for an environmental organization, etc. I don't want to romanticize that lifestyle and it is not my choice, but there it is: Some people just choose to live that way.
(2) You say: "The Skidelsky's miss that relatively few people actually care much about what they call "leisure"."
I agree, the Skidelskys (Skidelsky Sr., by the way, is more properly known, I think, as The Right Honorable Lord Baron Skidelsky) often come off as what the Brits would call "snobs".
Thanks for the reply. I stand corrected on the point of using consumption-side GDP breakdowns: so long as you're using those, your comparison will not be affected by redistribution of income from manufacturing to non-manufacturing parts of the production and distribution chain of material goods. Also, when using consumption-side GDP breakdowns, a merchandise trade deficit like the US has will actually increase the apparent proportion of goods vs services in GDP, by including imported goods (+ distribution value) in the goods consumption lines and subtracting them in the net exports line.
However when using consumption-side GDP breakdowns, the change has not been very dramatic since Keynes time.
According to BEA consumption-side GDP breakdown figures, which go back to 1929, personal goods consumption was 42% of GDP vs personal services consumption of 32% of GDP in 1929, compared to 24% for personal goods consumption and 47% for personal services consumption in 2012.
Or, using the BEA's much more detailed PCE breakdowns, goods have fallen from 57% of PCE in 1929 to 34% in 2011 (the most recent year for detailed data), while services have risen from 43% to 66%.
Here's where most of the growth in consumption of services has been:
Health Care: from 3% to 16.3% (more than half the growth of personal services consumption!)
Recreational services: from 2.1% to 3.7%
Food services: from 4.1% to 5.3%
Financial services: from 3.7% to 7.5%
Higher education: from 0.3% to 1.6%
PCE doesn't include primary education, which in consumption-side GDP data falls under government consumption.
To some extent these growth services sectors reflect people spending more time directly catering to final consumers. However all these services are also largely made up of renting out of equipment and buildings on a per-use basis. There's a chain of manufacturing and distribution of material goods, and of construction of buildings and infrastructure, that comprises a large part of these services' values.
When you dig into it, the "service economy" turns out to be mostly a material goods economy.
Thanks, Tom, this is good data, and if I hadn't been so lazy, I would have dug more deeply into these historical trends.
At first I was surprised at the small growth of recreational services and food services. However, now that I think about it, in times past there used to be a food service sector serving low-cost meals to people who were too poor to have kitchens. For example, in reading French novels of the 19th century, poor people with no home kitchens eat out in cheap restaurants all the time and only the wealthy have kitchens at home. Same would be true of things like laundry and ironing, I suppose. There would have been more local baseball teams selling tickets to people who were not watching the major leagues on ESPN. So the change toward the service economy is not all in one direction, when you stop to think about it.
I think the growth of government services is probably greater than the growth in private services that you note, although 2X growth of financial services and 5X growth of higher education is pretty impressive.
As for rental of equipment showing up as services rather than material goods–Doesn't the value of the building get captured as construction and production of investment goods, and doesn't the value of these services in the GDP accounts only reflect value added in these sectors less depreciation of the physical capital?
I think your take ignores or discounts most factors that support the Skidelski's point. Some have been mentioned above, and the main one is unwittingly demonstrated by you yourself when you rhetorically ask "That still leaves eight hours, or one full working day, that we could devote to leisure if we chose. Why don’t we?" I don't know if you've ever worked for a business in a routine job, but virtually no one has a "choice" in "deciding" to simply work 4 days a week instead of 5. It's up to the bosses, Ed, not up to "us".
Capitalists like labor to work full-time since they make more profits the more people work. Extra employees have overhead and benefit costs, not just hourly ones. And as long as health care is allocated via the private sector (as it still is in obama-care) employees will have to work as long as the bosses (or insurance companies) want them to.
I see other problems with your take as well: Seems to me you're double-counting when you count government funds paid to private contractors–for, say building a federal highway. Those hours working, and stuff made or used, are worked/made/used by the private sector that you already counted previously. Ditto for transfer payments, those are spent by poor or retired people on private sector goods, already made and counted as private hours worked. The IRS and bureaucrat jobs that allocate or transfer funds are government services we need to work for, but not the stuff bought from the private sector with government funds–we (in toto) already worked to make that stuff.
Also, you ignore the 15% real un- and under-employment here–if alleviated, most people could work less (and 15% who really want to could work more) while making the same overall amount of stuff. There is an absurdly high prison population who are largely unproductive. Unnecessary security, policing, and military endeavors waste huge amounts of effort that could easily be avoided in a rational society.
Non-informational marketing (emotionally based) absorbs a large, by-definition useless portion of our efforts (if neither pepsi nor coke nor budweiser advertise, people will still satisfy their thirsts just as well.) Capitalist inculcation of desires for luxury and status and fashion goods and spectacle wastes huge amounts of effort. I just read that in the last Star Wars movie, 900 people put in 70,000 man-hours to make one 49-second segment of finished (computerized) film. Even if the film weren't terrible, even if it were Casablanca, that's madness… But not one of those people had a choice, if they wanted to keep their jobs–George Lucas had the $millions of capital, and he made them work…the Force (of economic power) was truly with them…
There is not a shred of scientific evidence (controlled, replicable, rather than anecdotal and/or societally influenced) that people "naturally" want to consume ever more. In our mad, capitalist, over-consuming society they simply aren't given a realistic chance (economically or psychologically) to make a rational choice trading off more leisure for less "work" and "stuff". That won't change, by and large, until the capitalist system that causes it does…which will be fairly soon, one way or another…unfortunately (for the climate and planet) it will probably be another…
Thanks for your thoughtful comment. Here are some of my reactions:
1. First of all, the Skidelskys do consider all of your "old left" arguments, and, as I said, they sympathize with them to a considerable degree, but ultimately, they don't think they are the whole story. I don't think so either.
2. You write: "Capitalists like labor to work full-time since they make more profits the more people work. Extra employees have overhead and benefit costs, not just hourly ones. And as long as health care is allocated via the private sector (as it still is in obama-care) employees will have to work as long as the bosses (or insurance companies) want them to."
That argument is less true than it used to be. Employers can often lower labor costs by hiring more part-time, fewer full-time people. That is a national trend. Partly, it happens because part-time workers can work flexible hours; you don't have them sitting around when you don't really need them. Also, many companies do not pay benefits at all to part-timers, so it is the full-time workers that cost more in benefits. Finally, the Affordable Care Act is thought by many to provide new incentives to replace full-time workers with a greater number of part-timers. We'll have to see how that works out in practice.
3. You say, "I see other problems with your take as well: Seems to me you're double-counting when you count government funds paid to private contractors–for, say building a federal highway. Those hours working, and stuff made or used, are worked/made/used by the private sector that you already counted previously."
I don't think there is any double-counting here. Either you use the jobs data, in which case those hours show up in the private sector but not the government sector, or you use the GDP data, in which they show up in government expenditures but not private expenditures.
4. Yes, there is a lot of waste in the economy. If we could cut waste, we could all work less and be no worse off. Part of the trouble is, we can't agree on what is waste. One person's wasteful military adventure is the other person's essential national security; one person's excess prison population is another person's keeping criminals off the street.
Thanks for your helpful clarifications, I appreciate them. Obviously there are many factors involved, and the question is not whether any one, or small subset, is 'the whole story" (a straw position which i certainly wouldn't claim for my own take), but rather what are the predominant ones and which ones are subject (potentially) to democratic control of the workers themselves.
I take your point on the no double counting for hiring contractors, but still don't see it for transfer payments. If there were no govt. transfers, people currently given them (largely non-workers) would be able to buy less goods produced by workers, and people they were taken from (taxed workers) would be able to buy more of what they themselves had produced. But the distributional change in who could buy what the workers had produced wouldn't affect how much work had been done. But the GDP portion of total govt. expenditures would go down if there were no transfer funds, making it appear we were working less, by your logic. What am I missing?
I also take your point on the increasing (employer-controlled) trend towards part-time work without benefits–but it occurs at the same time that those who remain working full-time are increasingly pressured to work overtime (paid for hourly workers, unpaid for salaried), especially when demand unexpectedly rises, rather than hire new workers (of any sort.) But again both these "trends" make people have to try to work more, not less–for the part-timers, they just have to try to work two or three part-time jobs to make ends meet. I know this well, being a full-time college professor who has many adjunct friends, many of whom work longer total hours at various colleges than I do, desperately hoping not to get sick along the way.
My point is simply that little of this is by full- or part-time workers' "choice" (the hourly overtime for full-time workers is nominally voluntary, but workplace realities are predominantly about bosses' real power, not nominal strictures). Rather, it is imposed by their bosses (non-profit colleges, in my friends' case, not private capital, but in a capitalist society non-profits simply put their surplus value to other uses, they don't stop trying to extract it!) Single-payer nationalized health care would certainly lead to less per capita hours worked, but I doubt Obama-care will, as private insurance is just too expensive in general to pay for (without substantial sacrifice) out of low-wage or part-time work, even with subsidies.
However, those are minor points, as the real issue, as you point out is in your point 4., is waste. I agree that "we can't agree" on what is waste, which is of course an issue of democracy–that's how we (should) come to decisions on what we disagree about. As you correctly divined, as an "old leftist", my concern is that under capitalism decisions about the economy, or more precisely about the political economy, including those about what is worth producing and what isn't, are largely made subject to the enormous real economic and political power wielded by private capital, where there is no democracy, but rather "one dollar, one vote". Capitalists dollars will always tend to "vote" for less (voluntary) leisure overall, as you can't make profit off of people who choose not to work. Of course, capital may be fine with some local involuntary leisure, as long as their are people even more desperate to work elsewhere…
Thus I see discussions about why we "choose" to work so much to be (effectively) disingenuous–ignoring the difference between nominal choice and real choice, nominal democracy and real democracy, nominal power and real power.
However, I know your take on capitalism is much more benign, and hence that you aren't being deliberately disingenuous. I would urge you to imagine yourself in the shoes of a typical low-wage or part-time worker, though–subject to bosses' displeasure, losing (or having no) health insurance, the threat of protracted unemployment, and of being tossed in prison (thus keeping a criminal off the streets) if you buy a little marijuana to take your mind off your troubles… The notion of 'choice' in such a case becomes much less convincing, to me at least. But of course you can always "choose" to join the military…
Thanks again for your reply, and if i sound like I'm preaching, I suppose I am…just to stay in practice. At least in your case I'm not preaching to the choir!
Hi Ed, sorry for my slow response, hope you notice it so late.
I need to answer your question in two ways.
As for what I'm referring to, my point was simply that a large part of what we think of as services is actually the by-use renting out of material goods. Such as when you get a cat scan at the hospital, your bill effectively includes a very short-term rental of the scanner, a material good, plus the service of operating it and providing a room to operate it. Or another example is renting out a building, which is a service, but most of the value provided is use for a time of a material good, the building.
Your question is a completely separate issue, about how the initial capital investments in such rented-out goods and buildings, and the income from renting them out, are accounted for in GDP.
In fact, GDP includes both expenditures on production/construction of capital goods and the income from renting them out, without netting out depreciation of capital goods over time. That's exactly why it's called "gross" domestic product. In net domestic product (and related measures such as national income), depreciation of capital is discounted.
The confusing thing though is that "gross" domestic product is really a mix of gross and net accounting. For the production/construction of capital goods and the income earned from utilizing or renting out those capital goods, GDP is a gross measure, including expenditures on capital plus the products made from capital with no netting of capital consumption. For intermediate goods and the final products made from those intermediate goods, GDP, like NDP, measures only value added, netting expenditures on intermediate goods from the sales prices of the final goods. This makes GDP measures subject to sometimes arbitrary decisions over what is capital and what is an intermediate product.
The type of national accounts that are fully gross (counting capital goods, intermediate goods and final goods, and netting nothing) are usually called gross output, a rather unintuitive distinction from GDP.
I see other issues with your take as well: Seems to me you're double-counting when you depend govt resources compensated to personal contractors–for, say making a govt road.
The income levels compels forgoing of leisure for survival.
- 1 of 10,000 of us received 4.6% of U.S. income or $24,000,000
- 9 of 10,000 received 4.9%, $2,800,000
- 40 of 10,000 received 6.2%, $798,000
- 50 of 10,000 received 4.1%, $418,000
- 400 of 10,000 received 16.0%, $206,000
- 500 of 10,000 received 12.1%, $126,000
- 9,000 of 10,000 received 52.1%, $30,000