The Idea of Workers “Choosing” Their Hours, Pay or Conditions is Bogus
By I have a long-running hate of the Times Room for Debate feature. Giving a bunch of people 100 words to make a case just feeds both sides do it syndrome. That’s especially true since the feature consistently combines scholars and experts with crazy people. Take last week’s subject of the 40 hour week. Plenty of good people but they had to have a conservative. And what a doozy. Amity Shales ladies and gents:
People decide to work more (or less) than 40 hours a week because of a variety of factors including family life, education, hobbies and leisure time in general. But the biggest reason may be as simple as one word: taxes.
Americans would willingly work longer hours, earn more and be more productive if their marginal tax rates were lowered.
Across nations and decades, the Nobel-winning economist Edward Prescott found, tax rates largely determined the hours that workers put in. Heavily taxed workers in Europe put in fewer hours than more lightly taxed workers in the United States, he determined.
More precisely, taxes limited the hours that Europeans work on the books. In countries like Germany, he wrote, people work just as much as Americans; they merely record less of that work for the government by working in the black or gray markets, where their earnings are untaxed or less taxed.
What does that mean for the workweek in the United States? A progressive rate structure like ours starts out alluringly low, then raises rates as you earn more, taxing the last dollar earned more heavily than the first. The more progressive a rate structure, the less attractive working that extra hour, or getting that promotion, becomes.
Though most workers aren’t taxed at the top and heaviest rates, they can still feel the load of some rate increases. And most people are aware in a general sense that harder work has limits to its rewards because of the effect of progressivity.
If we flattened the code, so that the last dollar is taxed at the same rate as the first one, people would want to work more.
The hours we work should be a matter of genuine, individual choice, not determined by government policy.
Whatever planet Shales lives on doesn’t have actual workers. Choice? Who chooses to work certain hours? Yglesias used this formulation in his classic “it’s ok for Bangladeshi workers to die on the job because their country is modernizing” response to me after the Rana Plaza collapse. It makes no sense because it is totally disconnected from how people actually act. When the choice is “work or starve” that’s not a choice. People work because they are told they are working this long, whether it is a 20 hour week or a 50 hour week. The only things that have ever gotten in the way of this are unions and governments. Today, the former doesn’t have the power and the latter increasingly lacks the inclination.
The rest of it is just bog standard flat tax idiocy, hiding corporate greed in a rhetoric of worker freedom. But people who say workers “choose” these things are showing me they have no idea what actual working class life is like.