For the last century, one of the biggest criticisms hurled at capitalism is that everyone is a wage slave. To these critics of the greatest economic system the world has ever produced, too many people are overworked, underpaid, and cogs in a machine or pigs being led to the slaughterhouse. This would be true if Americans were clocking in 80 hours a week and earning pennies a day in sweatshops, but the data suggest the opposite: We have it pretty good.
We’re in the Money
According to the Bureau of Labor Statistics (BLS), the U.S. economy added 263,000 new jobs and the unemployment rate fell to a 49-year low of 3.6%. The BLS figures also highlighted across-the-board gains in most sectors, including an impressive 76,000 in professional and business services, 33,000 in construction, and 27,000 in health care.
But there was another revealing statistic that debunked the myth that everyone is working more and earning less. In April, hourly wages rose six cents, or 0.2%, to $27.77 per hour – and the 12-month wage rate was still up 3.2%. The number of hours worked dipped 0.1 hour to 34.4 hours.
Put simply, Americans are working less but earning more.
Lazybones, Loafin' All Day
In June 2017, Chinese billionaire and Alibaba founder Jack Ma made this not-so-surprising prediction: Our grandchildren will be working less than we do today. He told CNBC:
“I think in the next 30 years, people only work four hours a day and maybe four days a week. My grandfather worked 16 hours a day in the farmland and [thought he was] very busy. We work eight hours, five days a week and think we are very busy.”
Is this remotely possible? Well, it is inevitable that workers in the developed world will see their hours at the office decrease, perhaps even to just 240 minutes a day. This view is supported by data of the last 150 years, which show a dramatic decline in how long we spend time in a cubicle, behind a machine, or inside a kitchen.
In 1870, the average working hours in the United States, France, Germany, and Great Britain were between 60 and 72 hours. Since then, this number has been cratering, falling to as low 34 hours.
Even our working lives are shorter than back in the day. At the height of the industrial revolution, you would begin your career in a chimney as a child and then do your ten daily hours until you’re dead in the coal mines. Our marginal productivity allowed parents to send their kids to school rather than to a tobacco factory. Today, we have the luxury of educating our children up until their mid- to late 20s.
And when you factor in consumer goods that make our lives easier – vacuum cleaners, dishwashers, laundry equipment, and microwaves – we have more leisure time than at any other point in human history. Instead of toiling in the fields for our food and spending 12 hours a day at another building, we are binge-reading Agatha Christie mysteries and imbibing Hungry Man dinners while the robotic vacuum cleans our dirty rugs.
This must mean that we’re less productive than our great-grandparents, correct? The BLS found that the productivity of American employees surged in the first quarter to the highest level since 2010. During the January-March period, productivity climbed at a 3.6% annual pace. Thanks to technology, we are getting more done, not less.
Will these trends reverse? Ryan McMaken of the Mises Institute opines:
“Moreover, continued interventionism by states and their central banks may drive real wages and economic opportunities down. Regulations on starting a small business, coupled with central-bank driven asset price inflation, takes its toll on earnings for many throughout the world.
“Time will tell if war, unchecked government regulation, or some other disaster may put a halt to the declines in working hours we've been enjoying for so long. If not, our descendants will be looking back on five-day weeks the way we should now look at the grueling work schedules of our great-grandparents.”
Summoning Keynes’ Spirit
Are we living and working in a wage-slave economy? Marxist rallies may purport that idea, and The New York Times meditates that a $33 hourly wage is necessary to increase our living standards. This is a false premise. If there was one thing John Maynard Keynes got right, it was that we will eventually work less and enjoy greater leisure time. Keynes hit this out of the ballpark. However, our fortunate situation isn’t due to the central planners but to the free market that gave us more time to finish (or not finish) crossword puzzles or binge-listen to old episodes of the Escape radio series.
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