The Economist wrote in April that for most of human history rich people had the most leisure. "In 'Downton Abbey,' a drama about the British upper classes of the early 20th century, one aloof aristocrat has never heard of the term 'weekend': for her, every day is filled with leisure. On the flip side, the poor have typically slogged. Hans-Joachim Voth, an economic historian at the University of Zurich, shows that in 1800 the average English worker laboured for 64 hours a week. 'In the 19th century you could tell how poor somebody was by how long they worked,' says Mr Voth." However, in recent decades in developed economies, it's the rich who work longer hours than the poor.
Robert Frank of The Wall Street Journal in 201o cited research by Daniel Kahneman, the Nobel Prize-winning psychologist, which showed that “being wealthy is often a powerful predictor that people spend less time doing pleasurable things and more time doing compulsory things and feeling stressed.”
His study found that people who earn less than $20,000 a year, for instance, spent more than a third of their time in passive leisure, like kicking back and watching TV. By contrast, those earning more than $100,000 a year (more affluent than wealthy), spent less than a fifth of their time in passive leisure.
However, as the sharing/ freelance economy gets bigger, it's inevitable that the typical longer-hours for traditional self-employment than employee jobs will become common in the economy.
Even before the disruption threatened by Uber type smartphone apps impact many more sectors than taxi driving, taxi drivers in Dublin for example are working long hours to make a livable wage.
In 1930, John Maynard Keynes, the renowned British economist, wrote in a 1930 essay titled 'Economic Possibilities for our Grandchildren' [pdf]
Keynes forecast that incomes in the developed world would rise eightfold
between 1930 and 2030 and they are already up sixfold but he also predicted the
rise in incomes would cut the workweek to 15 or 20 hours.
Summers, who served as President Clinton's Treasury secretary and as chief economic adviser to President Obama, last summer in a lecture, 'Economic Possibilities for Our Children,' [pdf] in tribute to his Harvard colleague, Martin Feldstein, highlighted not only falling hours worked but permanent unemployment:
He added: "I think it is also fair to say that
the evolution and growth of disability insurance is substantially driven also by
the technological and social changes that are leading to a smaller fraction of
the work force working. At the same time, as has famously and repeatedly been
noted, the share of income going to the top one percent of our population has
Research [pdf] published by the Economic and Social Research Institute (ESRI) in December 2012, showed that in 2010, 22% of households in Ireland were jobless compared with an average of 11% for the EU15 and in Spain and Greece, where the rates of unemployment are the highest in the developed world, the percentage of households without a working adult stood at 10% and 7.5% respectively. The Irish rate in 2007 was 15%.
While wages will continue to be under pressure, Summers points to the relative costs in delivering health and education relative to goods (see chart above).
Part 4: Upcoming.
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