Jeb Bush's Cruel Economic Prescription for Americans to Work Longer Hours Is Worthless
Americans work a lot; in fact, they spend more hours on the job than workers in many other industrialized countries. But many have wondered if working even more hours might boost economic growth rates. Simply put, does working longer hours help the economy? GOP presidential candidate Jeb Bush has recently chastised American workers, saying, “People should work longer hours.” The truth is, there's not much economic justification for that view.
An international comparison of worker productivity versus workers’ average annual hours suggests an answer to the question. As it turns out, workers in the countries with the highest economic output actually labor fewer hours than countries where workers toil more.
Data from the Organization for Economic Co-operation and Development (OECD) shows that the top 10 industrialized nations for GDP per hour worked in 2014 were, ranked in order, Luxembourg, Norway, the United States, Belgium, Ireland, the Netherlands, Denmark, France, Germany, and Switzerland. The average annual working hours among these top producers was 1,555 hours per person, and the average GDP per hour worked was $69 (in U.S. dollars). United States workers, however, surpassed the average working hours with 1,789 hours worked per year, while GDP per hour worked in the U.S. was slightly below average, at $67. But in Norway, where workers averaged 1,427 hours per year — 362 fewer hours than U.S. workers — GPD per hour worked reached $88.
Even more revealing is a comparison of those 10 nations with the 10 where GDP per hour worked is lowest: Mexico, Chile, Russia, Latvia, Poland, Turkey, Estonia, Hungary, Korea, and the Czech Republic. Members of the labor force in these poorly ranked producers worked an average of 1,953 hours per year, and the average GDP per hour worked was about $26. So the difference in the average annual hours per worker in the top 10 most productive OECD countries and the bottom 10 is about 400 hours. That amounts to about 10 40-hour workweeks—no meager disparity. In that sense, measured by the standard American 40-hour week, workers in the bottom 10 countries work almost three months longer per year than those in the top 10 countries.
This extra work, however, clearly does not result in greater productivity or economic growth, because these countries are ranked at the bottom by GDP per hour worked.
The call for American workers to put in more hours would make the United States economy more like those of Mexico, Russia, Latvia, and Estonia, where GDP per hour worked lags far behind countries whose workers have more time off. The notion that Americans should work more is based on two false premises: that slow productivity growth is what ails the U.S. economy, and that longer hours are the cure.
Recent research indicates that U.S. productivity has increased steadily since the 1940s. Through the 1950s and 1960s, hourly compensation rose along with productivity, but in the 1970s this connection severed. Since then, a disproportionate share of earnings has gone to shareholders and upper management rather than to ordinary workers. Instead of having already overworked Americans remain at work longer, a more sensible solution to the country’s economic woes would be to ensure that productivity growth translates into higher wages and to make sure there is continued investments in research and development that lead to innovations. Such investments require vision and risk-taking, but simply squeezing workers harder is not a viable alternative.