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Annual hours of paid work increased substantially in much of the second half of the twentieth century due to more hours in a work week and more weeks worked. Economic sociologist Juliet Schor has sparked a national debate about work and time use with her best-selling books. For instance, in 1991 Schor reported that on average, men worked 43 weekly hours in 1969 and 43.8 hours in 1987. The corresponding increase for women was 35.2 to 37 hours. According to a study by Peter Kuhn and Fernando Lozano 18.5 percent of American men worked over 50 hours per week in 2001 (2005). In addition, with the increasing number of service sector jobs in the United States, “shift workers” have become more prevalent. A shift worker is at work during something other than a typical nine to five business day. According to numerous studies, workers keeping odd hours are more likely to have sleep difficulties and health problems.
The work week is also longer for many Americans due to urban expansion and increased commute times. In order to purchase larger houses in upscale neighborhoods with strong schools, many Americans have moved farther from their employer, therefore spending more time traveling to work each day. This trend suggests that Americans have less leisure time, and live with a rather frenetic pace of life. A number of surveys report that Americans would prefer shorter work weeks, but they do not want a lower standard of living. Increased time on the job generates income for the family, but a longer work week and commute further reduce the time workers have with their families.
Some statistics counter Schor’s findings. The Current Employment Statistics compiled by the U.S. Department of Labor’s Bureau of Labor Statistics reveal a decline in the length of the work week across all private sector jobs, from nearly thirty-nine hours in the mid-1960s to thirty-four hours in the early twenty-first century. This change is largely fueled by sharp decreases in average weekly hours in retail and services, sectors that have expanded substantially over the last half of the twentieth century, and that employ many part-time workers. In contrast, weekly hours worked in manufacturing have stayed fairly constant at forty-one hours during this time period. In addition, many professional and managerial employees are expected to work more hours than a standard full-time schedule.
Changes in the work week arise from a number of factors, including company policies. During recessions, firms regularly lay off workers (sometimes closing entire plants) to cut costs and manage inventories. The recession of the early 1980s saw many layoffs, but during the economic recovery that followed, firms did not rehire many workers. Instead, many firms added more overtime for existing workers. Indeed, there has been a general increasing trend in average manufacturing overtime from 2.5 hours in 1960 to 4.6 hours in 2000.
Largely due to higher health costs, benefits as a share of compensation have generally increased over time as well. According to the U.S. Department of Labor’s Bureau of Labor Statistics’ National Compensation Survey, at the beginning of the twenty-first century benefit costs comprised nearly 30 percent of total compensation. Benefits are fixed costs for employers, because they are paid once for each worker, and are not dependent upon how many hours an employee works. Therefore, high benefits costs deter businesses from adding workers.
Throughout the 1900s workers were increasingly paid on salary rather than with an hourly wage. This coincided with increased educational attainment, more professional occupations, and fewer manufacturing jobs. Salaried workers are required to work enough hours to keep their jobs, and the company culture reveals these expectations. For an employer, the cost of an additional hour of work from an hourly worker is the wage or the overtime wage. For salaried workers, the additional cost is zero. Salaried employees work longer hours in order to finish projects, to fit in the company culture, or to be productive enough to earn a promotion.
The structure of compensation has also changed, in that seniority-based pay is less common while pay for performance is more prevalent. Piece rates were the first form of incentive compensation, where employers tied pay to the amount a worker produced. Economist Edward Lazear presented the success of a piece rate system instituted at Safelite Glass, where both productivity and profit improved substantially. When workers face schemes that tie their compensation to productivity, they have a clear incentive to put forth more effort and work longer hours (2000).
Government policies have also contributed to longer work weeks. For instance, caps on employer contributions to social security, unemployment insurance, and other business costs are based upon employee salary levels. In order to eliminate the funding gap for Social Security, it is possible employer contribution caps may be removed. But these sorts of tax caps clearly suggest that having fewer workers (even highly-paid workers) can lessen a company’s tax burden. This is an incentive not to hire more workers, but to keep existing employees working more hours. In addition, the Fair Labor Standards Act dictates overtime pay eligibility. Around the turn of the twenty-first century, more occupations became ineligible for overtime pay. Exempt workers include computer professionals, administrative workers, and some salespersons—all are occupations that employ many American workers. Thus, the cost to a company for an additional hour of work is further reduced.
The structure of the work week has also changed as a standard nine to five schedule became less common in the twentieth century. Some employers offer “flex time,” which is a schedule that involves some variable hours that workers can choose, according to their preferences. This is particularly valuable to employees with family commitments. Other nontraditional arrangements include the extended and compressed work week. The extended work week spreads the same amount of hours over more days, with shorter shifts. This is compared to the more common compressed work week, which includes longer shifts over fewer days. One particularly popular arrangement is four ten-hour days from Monday through Thursday, yielding an extended weekend. It seems that some employers understand workers’ desires to have flexible leisure time without sacrificing their standard of living.
In order to increase earnings, many workers have more than one job. According to the Bureau of Labor Statistics (2002), 7.8 million Americans (5.7 percent of the labor force) had multiple jobs in 2001, and the most frequently cited reasons for this were to earn extra money (35.4 percent of respondents) and meet expenses or pay off debt (27.8 percent). Schor states that workers are caught in a cycle of ever more spending and ever more working to cover their expenses. Labor economic theory generally assumes that workers select their optimal number of hours, but Schor argues that this is not the case. Instead, employers set the hours they expect from workers and their employees adjust accordingly.
Bibliography:
- Kuhn, Peter, and Fernando Lozano. 2005. The Expanding Workweek? Understanding Trends in Long Work Hours among U.S. Men, 1979–2004. NBER Working Paper No. 11895.
- Lazear, Edward P. 2000. Performance Pay and Productivity. American Economic Review 90 (5): 1346–1361.
- Schor, Juliet B. 1991. The Overworked American: The Unexpected Decline of Leisure. New York: Basic Books.
- Schor, Juliet B. 1998. The Overspent American: Upscaling, Downshifting, and the New Consumer. New York: Basic Books.
- S. Department of Labor. Bureau of Labor Statistics. 2002. Issues in Labor Statistics. September, Summary 02–07. Washington, D.C. http://www.bls.gov/opub/ils/pdf/opbils50.pdf.
- S. Department of Labor. Bureau of Labor Statistics. 2006. Current Employment Statistics. Washington, D.C. ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb2.txt.
- S. Department of Labor. Bureau of Labor Statistics. 2006. National Compensation Survey. Washington, D.C. http://www.bls.gov/ncs/ebs/sp/ebsm0004.pdf.
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