21.8.15

FALSE PRODUCTIVITY.

I've been suggesting almost as long as I've been running the Cold Spring Shops that labor supply curves are backward-bending, and that there may be no point in people making a lot of money without any opportunity to have a life.  Let's start in July, 2004.
Presumably the set of social institutions that involved Dad working, Mom minding the kids, and parents staying together for the sake of the children, which takes advantage of the Say Aggregation Principle to ensure that one wage earner could support a family, and which makes unilateral dissolution of marriage less attractive, are not the set of social institutions envisioned in these discussions. There are, however, other institutional changes to consider, including reduced reliance on the treadmill career path, which might in fact be productivity enhancing as people might have less reason to look for ways out of productive but extremely time-consuming jobs. (Regular readers will correctly note that I have played this tune before: perhaps with sufficient notes on the horn the walls will come tumbling down.)
In higher education, the crumbling of the walls might have been midwived by the feminists, but the general principle is still valid.
How then to balance the income effect of greater prosperity, which works in favor of shorter and more flexible working hours independently of any explicit policy, against the competition effect, in which the individuals willing to work harder (the most independent men and women, for the most part?) will get to the prizes first? The French solution of legislating a shorter work week has not been particularly successful.
But we see the same challenges in the private sector.
I wonder, though, whether some of the discouraged workers of the ongoing Great Reset are using the straitened economic circumstances as occasion to say no to the most demanding employers. What's the point of doing the work of four people for twelve hours a day on half your previous salary if "downgrading your expenses" doesn't rule out Internet access or a functioning car or clothing for the kids?
And there are limits to how far a company can apply the tournament model to its staff.  Dean Dad asks the pertinent question.
If the recent New York Times piece about Amazon is at least substantially correct, it sounds like working conditions at Amazon are somewhere between a reality show and Logan’s Run. The Times piece -- which Jeff Bezos denies is accurate -- suggests that Amazon uses its extreme secrecy to enable extreme arbitrariness in how it treats its own people. In the absence of any worker protections at all, hard-charging people are chewed up and spit out quickly. The system will work as long as it’s growing. When it starts contracting, though, the fall will be fast and hard. It’s one thing to put up with cruelty when there’s something in it for you; it’s quite another when the best to be hoped for is to squeeze a little more time out.
Yes, and if you're going to put in the hours of an entrepreneur for a salary, in a country that at least gives lip service to entrepreneurship ...

Here, via USA Today, is an essay by Dustin Moskovitz of Facebook recognizing that the labor-leisure tradeoff is real.
Many people believe that weekends and the 40-hour workweek are some sort of great compromise between capitalism and hedonism, but that’s not historically accurate. They are actually the carefully considered outcome of profit-maximizing research by Henry Ford in the early part of the 20th century. He discovered that you could actually get more output out of people by having them work fewer days and fewer hours. Since then, other researchers have continued to study this phenomenon, including in more modern industries like game development.

The research is clear: beyond ~40–50 hours per week, the marginal returns from additional work decrease rapidly and quickly become negative. We have also demonstrated that though you can get more output for a few weeks during “crunch time” you still ultimately pay for it later when people inevitably need to recover. If you try to sustain crunch time for longer than that, you are merely creating the illusion of increased velocity. This is true at multiple levels of abstraction: the hours worked per week, the number of consecutive minutes of focus vs. rest time in a given session, and the amount of vacation days you take in a year.
To which I add, there is nothing magic about 40 hours. The old formula was eight hours for work, eight hours for family, eight hours for sleep.  Yes, there will still be hard-charging people willing to outwork everybody else, never mind the cost.  But part of being able to live better than a cave man is more down time than a cave man enjoyed, and as we are able to live better than a Mad Man, perhaps we ought have more martini time than the Mad Men enjoyed.

Here's Mr Moskovits.
My intellectual conclusion is that these companies are both destroying the personal lives of their employees and getting nothing in return. A candidate recently deciding between Asana and another fast growing company told me that the other team starts their dinners at 830pm to encourage people to stay late (he’s starting here in a few weeks). I also hear young developers frequently brag about “48 hour” coding sprints. This kind of attitude not only hurts young workers who are willing to “step up” to the expectation, but facilitates ageism and sexism by indirectly discriminating against people who cannot maintain that kind of schedule.
The most charitable interpretation of that job description is that people will have accumulated enough of a nest egg to retire by 35 or 40, but there's insufficient evidence of that labor-leisure tradeoff being common.

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