Why do we work so much?

Economists take on our long workweek, how it got this way, and what to do about it.

By now, our workweek should just be a few days. At least, that’s what economists predicted in 1958. Put another way, if we kept up the current 40- to 50-hour workweek, they predicted we’d have an average retirement age of 38.

As you know, that didn’t happen. I’ve been thinking about that stat a lot in the last couple weeks. Work has taken up a huge chunk of my time, which you might have noticed has resulted in a rather light posting schedule. Sorry about that. I’m going to start writing ahead over the weekend so my full-time job travails don’t interfere with your Pop enjoyment.

But seriously, you might wonder how it so happened that we’re working just as much now as we did in the 1940s. Until the 1950s, the workweek was consistently getting shorter. In 1791, carpenters in Philadelphia went on strike in a fight for a 12-hour, 6 am to 6 pm workday (minus two hours for meals). The 8-hour work day wasn’t a serious consideration for most workers until the late 1800s, and it didn’t become an American standard until the Fair Labor Standards Act in 1938.

But economists thought it was only going to get better. You see, our per capita productivity was increasing at a rate of about 3% per year in the middle of the last century. As our productivity improved with technological innovations, we’d be able to create the same standard of living with less work. Eventually, we would only have to work a fraction of the week.

In fact, right now, we could reproduce the average standard of living Americans enjoyed in 1948 with half the amount of work it took to produce then. You could work four-hour days, or 2.5 days a week, or six months per year.

As you know, that didn’t happen. Instead, our work weeks actually got longer. Over the past few decades, we’ve added about 10 hours to the average work week.

Just two days ago, I was griping about how it seems like I only have time to eat and sleep before going back to the office. And my job’s relatively lax at about 45 hours per week. Lots of accountants, bankers, consultants, and lawyers spend 80+ hours tied to desks and BlackBerrys.

Instead, rather than buying more time as our productivity increased, we bought more stuff. We have comforts workers in the 1940s could only dream of. Unfortunately, we also have the same workweek.

Taking our time back

I read the bestselling 4-Hour Workweek a couple years ago. What made that book so seductive was the promise that you could limit your work hours but still experience the same or an even better standard of living that you have now. I’m not quite as optimistic. But the book’s a great primer on life re-engineering.

You see, we work eight-hour weeks because our employers tell us we have to. I’ve done the math—by cutting out my TV and internet service, moving to a less pretty but perfectly fine neighborhood, and limiting the travel I’ve gotten accustomed to, I could live on a little less than 3/4 of what I make now. That means I could live pretty comfortably by working 28 hours a week.

But in most cases, your boss won’t entertain an offer to work less for less pay. It’s just not built into our culture. Hard work is rewarded with more money, not more time. Just recently, I admired a co-worker who did make this kind of dream arrangement. When it was time for layoffs, she was the first to go.

How could this change? With more companies choosing to rebuild their staffs with freelancers (i.e. independent contractors) instead of full-blown employees, we might get to make this choice soon. As a freelancer, you decide how much you want to work (at least, you have more freedom than a regular employee). It comes at the expense of guaranteed work, paid time off, sick leave, cheap healthcare, and a host of other benefits. But it’s one little plus.

What can you do now?

I’m going to go out a limb here and guess that you’d rather not wait for America’s heavy work culture to change. Here are six ways to scale back on your work life and get some free time back, starting with the most extreme possibilities and ending with minor tweaks.

1. Move.

America’s workweek has been growing for some time. The workweeks of other countries continued to shorten with productivity increases. The average U.S. employee works 1,777 hours per year. But you can easily find other countries and cultures that value free time much more highly (See chart). Employees in the most carefree countries on this list work more than 20% fewer hours.
 
 
Another fascinating fact: The countries that consistently rank as having the world’s “happiest people” also tend to work fewer hours than people in the U.S.

Among the winners as measured by Gallup: the Netherlands (1,309 hours a year), Denmark (1,423), and Canada (1,717). Apparently people in those countries aren’t missing whatever money or items they’re giving up by working less.

2. Work for yourself.

And by this, I don’t mean start your own business that you may or may not grow into a multimillion-dollar empire. This is about working less, not making more.

Freelancers effectively get to decide how much they need or want to work and can scale back whenever they want to take time off. Sure, you’ll be at an employer’s beck and call from time to time, but they don’t have the same amount of control over you as if you worked for them full time.

Switching to freelance can be rough and scary. That’s why so many people don’t become freelancers until they’re effectively forced to by a layoff. The hardest part will be building up a portfolio of clients. But if you choose to freelance within your previous industry, you’ll already have one potential client in the bag: your last employer.

Here’s a great article from Entrepreneur magazine on making the transition.

And one tip from me: You can use middlemen like Elance as you’re building up a portfolio or finding new clients, but these kinds of sites tend to bring a big concentration of little jobs that pay well below their required effort.

You’ll also be competing against workers in developing countries, who will push prices down below what you can afford. Your best clients are going to be the ones with whom you’ve developed a personal relationship and from whom you don’t need a middle man to protect you.

3. Discuss a work-from-home arrangement with your boss.

This will work best if you’re not a trailblazer in your company. As I mentioned before, one of the first people at my previous employer who did it got laid off last year.

But many companies have introduced formalized work-from-home arrangements for employees, in part to cut their own costs. They get to save on utility bills and office rent, and you get to eliminate your commute and the pressure of a boss watching over your shoulder.

Working from home also lets you measure a successful day by the amount of work you get done rather than the number of hours you spend in an office. That means you might be able to finish a project in half the time it took when coworkers stopped by to recap yesterday’s Real Housewives of New York City episode.

You can either leverage that to raise your productivity and pay or to shorten your workday by a bit. Of course, your boss might still want you to be on call for the workday. Just make the ground rules clear from the outset. This is a big theme in The 4-Hour Workweek.

4. At your next review, get a vacation raise.

Most corporate ladders are designed to reward employees with money instead of time. Assuming we only want money to use as a tool for happiness, this makes no sense.

Depending on what economic study you turn to, you’ll read that happiness increases with income only until you hit about $50,000 to $60,000 per year. Beyond that, each additional dollar of earnings doesn’t impact your level of happiness.

I don’t see how workers and companies haven’t caught on. Leaving the issues of kids, stay-at-home spouses, and expensive cities aside, we shouldn’t want to earn more money after we hit $60,000 or so a year. A dollar that doesn’t buy happiness, isn’t worth anything!

On the other hand, cash-strapped companies are more apt to grant you an extra few vacation days than a substantial raise. In fact, some companies would much rather give you that.

It’s not a bad strategy to ask your boss for a monetary raise first if you know he can’t give one and then back down to a few extra vacation days as an alternative. If you end up being too busy to take the days or depart the company without taking them, it’s many companies’ policies to pay you their monetary equivalent in cash. So there’s not much pain in getting a vacation raise.

5. Take advantage of benefits your company has already built in.

One company I worked for granted its employees a one-year paid sabbatical for every 10 years of work they put in. I knew plenty of people who had worked there for decades. I knew no one who took them up on it.

There seemed to be two fears held by the eligible employees: 1. That the company would realize it didn’t need them and would fire them if layoffs were needed. And 2. That they’d fall behind their peers on the promotion ladder.

Number 1 was a little delusional—if you’re unessential to a company, your boss is probably smart enough to know that without you disappearing for a year.

Number 2 was probably true. If Bill takes a year off and Nancy doesn’t, Nancy’s probably going to make vice president at least a year sooner. But I think most employees underestimated the benefits they got with a whole year off. They could spend more time with their children, go on life changing trips, get a new degree or certification, or explore a new career path. Are those things worth postponing a promotion? Heck yeah.

Few companies have a generous policy like that (academia excepted), but most do have special circumstances that let you take extended leave. After the birth of a child, some companies let both women and men take a few months off to take care of the newborn. If you have a sick parent, federal law will guarantee your job for up to three months while you take care of him. When you get the chance for a breather, take it.

6. Shorten your commute.

One of my cousins once told me, “The secret to happiness is a short commute.” And it turns out there’s data to back it up. According to Swiss economists Bruno Frey and Alois Stutzer, a worker with a one-hour commute has to earn 40% more money to be as happy as someone who walks to work.

They concluded that part of it has to do with the unpredictability of traffic—we never get accustomed to a long drive because traffic varies from fine to extremely bad. So think twice before buying a huge home in the suburbs.

Well, that’s what I’ve got. If you’ve got any other ideas or little tweaks you use to spend less time in the office, leave them in the comments. I’m looking for ideas!

P.S. This post appears in the Carnival of Personal Finance at The Wisdom Journal. Check it out for posts by other bloggers.

Tagged as: behavioral finance, time, work