Today is Labour Day in Queensland, held to mark May Day. In most other Australian states, though, Labour Day commemorates the passage of legislation in the mid-19th century limiting the working day to eight hours. This was the first step in a series of legislative measures and agreements negotiated by unions that steadily reduced the number of hours standardly worked per year from about 2400 in 1950 to around 1750 in the mid-1980s.
As we all know, that trend came to an abrupt halt and went into reverse through the 1990s. Strictly speaking, standard hours have not changed, but the majority of full-time workers now work longer-than-standard hours, typically without paid overtime. Similar trends have been evident in other English-speaking countries, most notably the US.
Meanwhile working hours have continued to decline in Europe. The imposition of a maximum 35 hour week in France has attracted most attention, but few Europeans work more than 1600 hours a year.
Is the return of longer hours a desirable market outcome or an aberration. In my view, it’s the latter. the intensification of work in the 1990s seems to be the product of a period of economic expansion combined with employer dominance. Working hours have already begun to decline in the United States.
The experience of Japan, famous for long working hours in the 1980s is instructive. The low growth of the last decade has not been accompanied, as one might expect, by strong growth in unemployment, even though productivity has continued to improve. This is because working hours have declined. As this ILO data shows, average working hours in Japan are now slightly below those in Australia and well below those of the US.
Intuition suggests that leisure is a normal good. Economic progress should entail shorter hours and less stress. Instead, for the last decade or so, we have had the opposite. Productivity gains derived from such sources are built on sand (in fact, correctly measured, they are nonexistent).