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    Do we work too hard?

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    One of the limiting resources in our economy is time. As a society, we make choices about the allocation of time between work and other pursuits. In the US, most workers are eligible for overtime pay if they work more than 40 hours a week, whereas most European workers become eligible at 35 hours per week. In addition, workers in Europe have guaranteed vacation time—five weeks in France—a benefit not available in the US. As a result, the typical US worker puts in about 2,000 hours per year compared to 1,700 hours per year in France and Germany.

    Should US laws be changed to require a shorter work week and longer vacation time?
    For each side of the question list three strong arguments. Use the following concepts from the chapter at least once.

    - Production possibilities curve
    - Economic growth
    - Market mechanism
    - Market failure

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    Solution Preview

    OK. I'm going to throw out ideas and sources.

    Production possibilities curve

    Fewer hours of work: This would mean that output would decrease. Remember, the production possibilities curve assumes a fixed amount of capital. Hence, this is really not a great measure. Harvard economist Juliet Schor argued that the work day could go to 4 hours with no change in our standard of living. http://www.capitalinstitute.org/node/379

    Maybe 50% of our productive capacity has nothing to do with basic needs, so shorter working ours will not matter.

    A reduction in the workweek with no reduction in weekly income is an alternative means of maintaining employment in manufacturing. ... With output per worker increasing and the ratio of investment to output constant or declining, it is always feasible to reduce the workweek without a reduction in weekly income or an increase in price. The increase in labor productivity in an industry may be shared between a slower increase in weekly income and a reduction in the workweek for workers in that industry. A reduction in the workweek under these circumstances is always possible. There are at least two reasons, however, why it may not be practical. First, a shorter workweek is only possible if prices of the industry's products do not decline. In the face of international competition for domestic markets, it may not be possible to meet this condition. Second, consider what happens when some manufacturing industries are better able than others to utilize the new technologies, and thus achieve much greater increases in productivity (Appelbaum, E, The Economics of Technical Progress. Automation and the Workplace, Congress of the United States, Office of Technological Assessment, Washington, D.C., March 1983, 62)

    There is a clear connection between shorter hours and more days off and increases in productivity. An Atlanta firm created a 36 hour workweek with the same money for the old 40 hours. Labor costs decreased and more workers were hired.

    Put it this way, it would take the American worker 11 hours to make the same amount of goods that an American worker created 1950 with a 40 hour week. Increases in our sense of well being are only affected when we have our basic needs met - not luxuries.


    So these are all arguments in favor.

    Economic growth

    Shorter work weeks can improve growth. In the 19th century, there was a shift from 60 hours a week to 40. This saw huge increases in productive capacity.

    Take a look here:

    Yet, this older piece says that reductions in working hours decreases output:

    Of course, the libertarians are against it, this guy claims that Europe is increasing working hours, not decreasing them. He argues that there comes a point where shortening the work week will fall against the law of diminishing returns. http://mises.org/daily/1594

    The argument here is that 40 hours is a good period for work. Too much leisure is bad thing. The European example is falling apart, and, as we will see below, Europeans work less because their taxes are higher. They have no incentive to work more.

    Market ...

    Solution Summary

    The expert examines the statement "Do we work too hard?". Whether the United States laws should be changed to require a shorter work week and longer vacation time is determined.