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Home Publications Blogs Beat the Press Are Average Weekly Hours Really Plummeting?

Are Average Weekly Hours Really Plummeting?

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Sunday, 16 March 2014 19:47

Last week we were being warned that the labor market was too tight and an outbreak of inflation was imminent. Today, Edward Lazear, formerly chief economist in the Bush administration, is telling us that labor demand is plummeting as shown by a reduction in the length of the average workweek. Okay so the labor market is too tight and too weak, that looks really bad. Given that economists also tell us that robots will take all our jobs and that a growing population of retirees will leave us with a shortage of workers it is remarkable that the public doesn't insist on hanging us all.

But Lazear does raise an interesting point that deserves to be considered. The Labor Department's establishment survey shows a notable decline in the length of the average workweek from 34.5 hours in November (he picks September as his starting point) to 34.2 hours in February. In work time, this is equivalent to a loss of more than 1 million jobs. As a result of this drop in hours, the index of total hours worked actually shows a decline of 0.1 percent since September and 0.6 percent since November. What do we make of this?

There are two questions that come up. First how reliable are these data and second, are they consistent with other data?

On the first point, there are grounds for skepticism. As Lazear notes in the piece, weather could have been a factor in shortening workweeks in February. Much of the Northeast-Midwest was hit by unusually bad weather that may have led people to miss a day or two of work. If we look back over the last three decades, there are other instances of comparable declines in the length of the average workweek that don't seem to correspond to downturns in the economy.

For example, we saw the same drop from 34.5 hours in December of 1994 to 34.2 hours in May of 1995, a period when the recovery was moving along at a healthy pace. (These data refer to the hours of production and non-supervisory workers, since the all workers index does not go back before 2006.) The average workweek declined from 34.7 hours to 34.4 hours between January of 1989 and May of 1989, again a period where the economy was still growing at a healthy rate. And it fell from 34.8 hours in November of 1987 to 34.5 hours in March of 1988. There was an even sharper drop from 35.0 hours in January of 1986 to 34.6 hours in July of 1986. In short, we have seen these sorts of drops before even as the economy was growing and adding jobs at a healthy pace. 

The other question is whether the data are consistent with what we see in other series. Here the answer is clearly no. The separate survey of households shows that the number of people employed part-time (defined as less than 35 hours a week) has actually fallen by more than 0.3 percent since September. This survey is much less reliable than the establishment data. Also, it is possible that workers may working fewer hours but not crossing the 35 hour threshold to be classified as part-time. (We could also directly analyze the micro data, but that's more effort than I am prepared to put into this question just now.) Anyhow, the published data from the household survey clearly gives no support to the declining hours story.

So, what should we make of this drop in hours? For the moment, the answer should be not much. Let's see what happens in the next two months. There is a story that Obamacare will lead to a reduction in the length of the average workweek, as many people will no longer need to work a full-time job to get health care insurance. That is one of the good things about the Affordable Care Act in my book. However, a reduction in hours for this reason should be largely offset by an increase in the number of jobs. If that proves to be the case, that will be good news.

 

Note: Typos fixed, thanks Robert Salzberg.

Comments (5)Add Comment
recession let a lot of folks work fewer hours....., Low-rated comment [Show]
If you think being unemployed is a good deal, I encourage you to take advantage of it
written by Dean, March 16, 2014 9:37
Pete,

if you think it's so great to be unemployed then why don't you try it for a while. I don't know a lot of people who want t live on $15k a year, but if you think that's a kingly sum, then by all means do it.
...
written by watermelonpunch, March 17, 2014 7:23

LOL

One's friends are one's mirrors, right?

@ Pete:

Unemployment is insurance. You don't even qualify unless you've been working, and your past employer(s) & you have paid into it.

Have you not worked enough to qualify, Pete? Because it sounds like you have some FRIENDS who've actually worked for a living and earned that Unemployment insurance that you're jealous & envious of.
lol
written by Texas Toured, March 17, 2014 9:52
recession let a lot of folks work fewer hours.....
written by pete, March 16, 2014 9:28
… Where do I sign up? …
Pete


Well, isn't that just precious? pete doesn't even know where to sign up. Plainly, he's ignorant when it comes to even the basics of the reality of unemployment insurance. Oh, those arm-chair philosophers, so durn cute!
hey Dean was the one praising fewer hours worked, not me!!!
written by pete, March 17, 2014 11:48
Y'all missed the humor I see. Dean says that when some folks are pushed to lower hours worked, i.e., the Casey Mulligan analysis, that they will be better off. In other words, leisure has value. Most folks forget about the value of leisure, which those on unemployment or SSI enjoy or on reduced hours enjoy. Standard labor economics, nothing new here.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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