The 150-year trend that could help

In 1930, the great economist J M Keynes wrote in his essay “Economic Possibilities for our Grandchildren” that in a hundred years, the average work week could fall to 15 hours. People would need to work just three hours a day, and “for the first time since his creation man will be faced with … how to use his freedom from pressing economic cares, how to occupy the leisure”. That a hundred years later more than three-fourths of males even in advanced countries work more than 40 hours a week is not just because two of his conditions were not met: That there be.....
In 1930, the great economist J M Keynes wrote in his essay “Economic Possibilities for our Grandchildren” that in a hundred years, the average work week could fall to 15 hours. People would need to work just three hours a day, and “for the first time since his creation man will be faced with … how to use his freedom from pressing economic cares, how to occupy the leisure”.

That a hundred years later more than three-fourths of males even in advanced countries work more than 40 hours a week is not just because two of his conditions were not met: That there be no more wars (World War II had started just a decade later) and that population be controlled (it has nearly quadrupled since then). A more important driver perhaps is  the human preference for income over free time: The genes we carry are of ancestors who survived because they were paranoid hoarders, when calories were scarce and life much more unpredictable than it is now.

He was right on the ball, though, in relying on human ingenuity to drive significant advances in productivity. The number of hours worked per week has been falling for 150 years, even as average living standards have improved. Now that global population growth is slowing, and productivity growth continues, it is perhaps time to think again about working and free time.

On an average, humans spend about half the day on personal needs like sleeping, eating and taking care of their bodies. All productivity-driven changes occur in the other half, which is spent in paid or unpaid work (like child-care) or in studying and leisure. If work hours decline, time available for leisure increases. The best definition of leisure is, in fact, “not work”, as the same activity can be work for some and leisure for others: For example, knitting, playing cricket or climbing mountains is leisure mostly, but not if you are a weaver, cricketer or a sherpa. People currently spend between 4 and 6 hours a day on leisure.

Till the industrial revolution started three centuries ago, there wasn’t much of a separation between home and the workplace. Not only was nearly all of the workforce in agriculture, manufacturing was mostly artisanal and done at home. The industrial revolution introduced the factory (and later the office), where the owner of the factory set the rules, and work hours were specified. The excesses this led to triggered movements to restrict work hours in the 1840s, but it was with the introduction of the Factory Act in the UK in 1874 that limits on working hours were imposed for the first time, even if only for children and women.

Since then, average hours worked per week have nearly halved, driven by regulation (supported by research which showed that fewer work hours improved productivity) and labour-employer negotiations. Paid vacations were introduced in the 1930s and a five-day week in the 1940s. Fall in unionisation of labour and the rise of contract work slowed down the decline after 1980, but the number of employees who work more than 40 hours has been shrinking for most economies (except the US). Further, some developed market labour unions are now choosing vacations over more pay, and the average number of vacation days has been rising steadily in the last few decades. The French attempt in 1998 to reduce the work week to 35 hours (an attempt to spread the same work over more workers) was not successful, but was likely a sign of things to come.

Illustration: Binay Sinha
Demographics may also be helping, like the rising number of retirees: As rising retirement age lagged the growth in life expectancy, people live 10-15 years more post-retirement than they used to. The drop in fertility rates also saves time otherwise spent on childcare (mostly by women).

All leisure though does not add to economic output, like spending time with family, or playing in the park. In fact, until two centuries ago, commercial leisure was mostly the domain of the ultra-rich, and the arts were dependent on patronage provided by religious bodies, by kings who used musicians, painters and actors to entertain themselves and their subjects, and wealthy businessmen wanting to signal their social standing.

But that is changing too. The rise of the middle class and the technology-driven cost cuts have meant growing commercialisation of leisure. The railways, the car, and then cheaper flights meant people could afford non-essential travel (which was earlier too long, too costly and too dangerous), triggering the growth of tourism. Book printing made reading more affordable and made fiction-writing a career. Similarly, the advent of electricity, gramophones, cameras and TV allowed for homogenised leisure experiences that brought down costs by allowing the same person or sports event to service a large number of users. The resultant lower prices boosted demand, and freed up artists to be their own masters instead of hunting for rich patrons.

In the past two decades, the share of leisure in overall consumption has been rising steadily in the US (as also in Asia, though data is harder to get), as has its share of total employment.

The Covid-19 pandemic has accelerated trends that save time, particularly for richer households that dominate spending on leisure. Even after offices open, work-from-home (WFH) is expected to see a four-fold increase in the US versus pre-pandemic levels (the change in India could be less but still meaningful): This can save on commute time for WFH workers, and by reducing congestion help others too. Another third of commuting, mainly for shopping, health and child care should also fall with the jump in e-commerce adoption.

Measured economic activity is all about humans providing goods or services to one another. We now need fewer workers for the basic needs of food, clothing and shelter, and while India needs more people in essential services like education, healthcare and finance, these would also become less people-intensive over time.

Steady growth in commercialised leisure could be the job creator economies need, particularly as rising leisure spending by people in more prosperous nations could also show up in India. According to the World Travel and Tourism Council, travel and tourism created 40 million jobs in India between 2014 and 2019, and this segment has also been among the most impacted in the last year and a half. Its revival could help narrow the wealth inequality exacerbated by the pandemic. Over the medium-term too this could provide opportunities for investment and job creation.
/> The writer is co-head of APAC Strategy and India Strategist for Credit Suisse



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