Teach Me to Number Our Days

There’s a good piece of advice in Edward Lazear’s Wall Street Journal op-ed on the most recent jobs report:

The labor market’s strength and economic activity are better measured by the number of total hours worked than by the number of people employed. An employer who replaces 100 40-hour-per-week workers with 120 20-hour-per-week workers is contracting, not expanding operations. The same is true at the national level.

Using that measure how does the jobs report fare?

The total hours worked per week is obtained by multiplying the reported average workweek hours by the number of workers employed. The decline in the average workweek for all employees on private nonfarm payrolls by 3/10ths of an hour—offset partially by the increase in the number of people working—means that real labor usage on net, taking into account hours worked, fell by the equivalent of 100,000 jobs since September.

To start adding jobs and putting the people who’ve been out of work for so long back to work we need to increase the hours worked rather than reducing them. I can’t help but wonder if the number of uncompensated hours is rising even as the number of compensated hours falls. Given the president’s recent proposal about over-time pay, I suspect that’s what he’s decided.

17 comments… add one

  • ...

    I don’t think the president has decided anything except that he can campaign on this issue and win, as opposed to campaigning on PPACA implementation, or his foreign policy, or his overall economic record, etc. The overtime issue just isn’t worth a president’s time. His policies on immigration are at complete odds with his policies on pay for workers.

  • Red Barchetta

    “His policies on immigration are at complete odds with his policies on pay for workers.”

    !!

  • ...

    You disagree?

  • Red Barchetta

    No, I completely agree. All politics all the time with Obama. I used to think Clinton simply wanted to BE President vs do something. Obama makes him a piker.

  • jan

    I wonder where paying people under the table or bartering comes into play as some kind of compensatory mechanism to circumvent restriction of work hours but still make a living?

  • michael reynolds

    So if an employer can build 100 widgets with 100 man hours as opposed to 200 man hours that’s a bad thing? Because I thought that was rather the point of business, to do the most with the least and take the largest possible profit.

    Isn’t there a disconnect then between our system and our goal? If what we want is more jobs, why do we seek profit-yielding efficiencies?

  • In essence, I interpret Lazear as saying that unless you’re indifferent to the human side of the economic recovery number of jobs is an inferior measurement—hours (or days) worked is much better.

    Similarly, GDP, real or otherwise, is an inferior measurement of economic recovery. Median real household income is a much better measure.

    The underlying question is what is the goal? If the goal is just increasing the number of jobs, doubling the number of jobs by cutting all of their hours (and wages) in half would accomplish it. That’s mathematics masquerading as policy.

  • Andy

    Dave,

    Which is essentially what Germany did with their “minijobs” progam.

  • Michael Reynolds

    Or we could ask ourselves whether economic goals are the only relevant ones. Maybe we could measure happiness. Let’s say we arranged for everyone to have a minimally decent life – food, shelter, medical, and a little left over to see an occasional movie. Are we so sure those folks would be unhappy that they couldn’t pull a double shift at Wal-Mart? Theoretically which would be better, a rising level of employment or a rising level of satisfaction or joy?

  • It’s been tried and flopped. The problem is that you can’t measure happiness from the top and trying to do so doesn’t produce prosperity but shortages.

    A guaranteed annual income is a better solution but it a) doesn’t solve the problems you’re trying to solve and b) has problems of its own.

  • steve

    The advantage of the German plan was that it helped avoid the long term unemployment problem. You less of a problem with cyclical UE becoming structural. As to Lazear’s claim, I have my doubts. If we had fewer people working, but they worked longer hours, you could have an increase in hours worked and higher unemployment. I think his idea, not a new one, has some merit, but not sure what to do with it.

    Steve

  • Ben Wolf

    What shortages? Happy people cause shortages or attempting to measure happiness creates scarcity? Or are you arguing the beatings must continue until morale improves?

  • Michael Reynolds

    You can measure happiness by asking people. Let’s say theoretically we had a choice between 95% of people telling a pollster they were happy but had a 25% UE rate on the one hand and 95% employment with only 25% saying they’re happy. Which do we want?

    At present we have a system designed not to maximize either employment or happiness but profit. Is that the very best answer? Capital strives endlessly to eliminate jobs in order to maximize profits and yet we define having a job as the key to a good life. What is the point of life after all? Is it to hold down a job you may hate while your employer tries to eliminate the need for that job? Am I alone in thinking we’ve lost the thread?

  • Red Barchetta

    Speaking of happy…..

    http://www.zerohedge.com/news/2014-03-18/more-warren-buffett-hypocrisy-restructures-deal-avoid-400-million-taxes

    I’ve told you about Uncle Warren before. Somehow I don’t think he will receive the invective of Obama or the general media……who love him for his false public pronouncements. I suspect Warren views Obama and the media as useful idiots.

  • Red Barchetta

    http://www.zerohedge.com/news/2014-03-18/five-year-fantasy-ending

    I know, let’s give a speech about overtime pay. THAT will fix it all….

  • jan

    What is the point of life after all? Is it to hold down a job you may hate while your employer tries to eliminate the need for that job?

    One of my more memorable reads was by Viktor Frankl, ‘Man’s Search for Meaning.’ The thread throughout this book was that circumstances don’t necessarily create unbearable suffering, but rather how we deal with the circumstances — the attitude we carry with us and exude can make or break one’s life. The point of his book was that our existence here is effected by much more than defining a situation, or job for that matter, as either ‘good; or ‘bad — it’s more about reconfiguring our own adaptability, even acceptance of something less than optimal, if that’s the best option available to us at a given time. It’s controlling adverse circumstances, rising above them, creating our own internal life raft that can keep us afloat rather than be pulled under by the undertow of a circumstance’s enormity or extreme tediousness.

    For example, there are few jobs as repetitive or ritualized as being a mailman. Over the years, we’ve had a round-robin number of people rotating through our hilly route, head’s bent, earphones plugged in, and looking less than contented with the job they are holding down. A couple of years ago, ‘Benjamin’ appeared on the scene, and he not only delivered the mail but also a totally different attitude. He smiled, was talkative, would comment on the “pretty day”, or delight on small observances on his route. I see him when walking around the community, and we always exchange news and/or pleasantries. When I commented on his affable, cheery demeanor, he said that constructing an appreciative outlook was his way of making the job enjoyable.

  • michael reynolds

    Jan:

    That’s a lovely pean to unionized, government work that pays 56,000 a year, I believe, plus full benefits, lots of time off and a generous pension.

    Now why don’t you take a look at the miserable conditions of a full-grown man being paid less than half that much, with no benefits, no union, no pension, no paid holidays.

    You know, the shitty way you Republicans insist employees should be treated: no union, no benefits, no pension and if it were up to you, no health care.

    If I give a few bucks will go buy a clue?

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