Wednesday, August 5, 2009

Hours of Labour 6

by Sydney J. Chapman (translated and condensed by the Sandwichman)

I now pass on to analyze the determinants of the worker's choice in the matter of the hours of labor, assuming that his wage equals his marginal worth and that he knows it, and supposing in the first place that he is endowed with perfect foresight. Two things affect him that do not appeal to the self-interest of the employer, namely, the direct value of his (the worker's) leisure and the balance or dissatisfaction that his work yields of itself. By "satisfaction" or "utility" I merely intend a conventional objective representation of the subjective fact of preference, behind which the economist qua economist cannot penetrate. I say this in order to evade the charge so frequently made against economics that it implies the acceptance of Utilitarianism, psychological or ethical. Picking up again the main thread of our discourse, we observe that, apart from the two considerations mentioned above, namely, the value of leisure and the satisfaction got directly from the activity of labor, the worker's real income is maximized when his money income is maximized. Hence apart from these two considerations the choice, as regards the length of the working day, of perfectly far-seeing workers would be the choice of far-seeing employers were the latter combined.

Now take the value of leisure into account. If the worker derived greater utility from an increment of leisure than from the increment of wage sacrificed by transferring an increment of time from production to consumption, he would gain from a shortening of the working day regardless of the given length of the day, other things being equal. Referring to our earlier numerical example, we see that from the long-sighted point of view the productivity of the last fraction of the nine hours' day is zero, while its value as leisure must be greater than zero. Hence, the worker would choose to work less than nine hours a day, it being understood, remember, that he is paid his marginal worth and knows what that will be for different daily periods of work. Leisure consists in rival satisfaction – yielding occupations, active or passive, which are rendered possible by wages. There is consequently a close connection between this and the other determinant of the worker's choice, namely, the positive or negative utility associated with labor itself.

It may be assumed that in the long run, after the working day has exceeded a certain length, any further addition to it diminishes the satisfaction directly derived from working or adds to the balance of dissatisfaction. If a balance of dissatisfaction were associated in the long run with the efforts of the last minute in the working day that the worker would otherwise choose, as would ordinarily be the case, he would elect, other things being equal, to work an even shorter day, the duration of which would be determined at the point at which the gains and losses came to equivalence when everything was taken into account, that is to say, at the point at which his satisfaction was maximized. If the last minute of working still yielded satisfaction in the long run when the hours were nine (referring to the case supposed), which is so highly improbable as to be a negligible case, the worker would prefer to devote more than nine hours of his day to production were this satisfaction of working greater than the value associated in the long run with the last minute of leisure left when nine hours a day were given to business.

So far, in considering the workers' interests we have fixed our eyes on a remote perspective. We next focus our attention upon immediate tendencies and suppose them not to be counteracted by forces arising out of a regard for ultimate results. In these circumstances the worker would be inclined to select a longer working day than would be continuously the most advantageous to him, because be would be blind to the reaction of the longer hours on efficiency and consequently on earnings and the capacity to take pleasure in work. Many people lower the general level of their earnings in the future – and spoil their enjoyment of work and leisure in the future – by making as much as they can in the present. However, even in these circumstances, workers would not approve such long hours as employers who were short-sighted, because the latter would make no allowance for the disutility of labor to the worker or the utility to him of leisure.


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