Do the 1% Work Harder Than the 99%?
Taxprofblog offers two studies on income and leisure that should spark some discussion. I have split the two studies out to two posts at Angry Bear as they are somewhat different conversations:
Income Inequality and Leisure Inequality: Do the 1% Work Harder Than the 99%?
Wall Street Journal Wealth Report, Do the Wealthy Work Harder Than the Rest?, by Robert Frank:
A new study [below] offers evidence that higher-educated (and therefore higher-earning) Americans do indeed spend more time working and less time on leisure than poorer income groups. In fact, while income inequality may be growing, “leisure inequality” – time spent on enjoyment – is growing as a mirror image, with the low earners gaining leisure and the high earners losing.
The more surprising discovery, however, is a corresponding leisure gap has opened up between the highly-educated and less-educated. Low-educated men saw their leisure hours grow to 39.1 hours in 2003-2007, from 36.6 hours in 1985. Highly-educated men saw their leisure hours shrink to 33.2 hours from 34.4 hours. … A similar pattern emerged for women. Low-educated women saw their leisure time grow to 35.2 hours a week from 35 hours. High-educated women saw their leisure time decrease to 30.3 hours from 32.2 hours. … (The study defines leisure as time spend watching TV, socializing, playing games, talking on the phone, reading personal email, enjoying entertainment and hobbies and other activities.) …
Leisure for the 99% is what you do when you’re not working. You work the hours available through employment. When those hours decrease, you fiddle around. You don’t decide how long you work every week. Hours for women are not restricted to outside work. Domestic labor fills up most of women’s time outside of work if they have husbands and families to tend to. In a sense, highly paid mens’ work hours are catching up to womens’. NancyO
Good points, Nancy.
As I posted over at TaxProfBlog, the abstract of this study raises questions about whether its conclusions have anything to do with leisure at all. The inputs do not appear to offer any insights into working versus labor hours unless I missed something. It would seem that the data related to expenditures which do not seem like a very good proxy for time.
The 1% “works” at tasks most of the 99% would consider recreational or leisure activities: attending events for enterprise or self aggrandizement, “professional leisure” in the form of golf or sports-event attendance with customers or suppliers, or participation in professional activities primarily undertaken for self-improvement or promotion. I think a fair study of the “work” behavior of the 1% would show that it is almost exclusively self-directed compared to that of the 99% which is predominantly other-directed (boss-directed). Self-directed work may be stressful and demanding but the stress and demands are self-generated and can be relaxed by choice. Neither the stress nor the demands on an other/boss-directed worker are voluntary or avoidable. They are a designed-in part of the work environment and culture. One might conclude that the 1% have freedom and autonomy over virtually 100% of their time where the 99% have freedom and autonomy over only what’s left after work.
I would argue that these people aren’t actually “working” but that they are “networking” I see our local 1% “working” in restaurants, coffee shops, etc. They may call it working, but it is not productive and it sucks up resources from people who are actually producing. I am sure they THINK it is working, but it really isn’t. I would like to know what sort of methodology was used to define who was working when.
Oh. It was from the WSJ. Tcha. I don’t even know why I bothered to think about it.
So much BS. Power lunch is a bit more leisurely than on-your-feet-all-day retail or roofing.
The lower the wage the more likely the household has multiple wage earners and/or multiple jobs.
I wonder if the “low wage” worker would refuse a few extra hours, even ditch digging, for a $1,530,773 yearly wage plus benefits?
Harder? Language is hard!
Marty-Thanks for a nice fleshing out
Reminds me of the books I have read where a high-powered professional discovers his life has no meaning, so he leaves hisjob and becomes a Buddhist, or a charity worker, or an artist or cleric.
He had the choice. He went from an uber-secure career with savings and investments, and into a meaningful lifestyle which he would never have been able to afford doing if he hadn’t spent years as a quant.
Leisure! God give me strength…
Yes, the issue is not “free time” it is stress. The higher up the income ladder, the less stress do to more control. Stress is directly related to the feeling of control one has in any situation.
This report does a good review of income and stress.
According to a study published in Psychosomatic Medicine, higher stress hormone levels were found in those of lower socioeconomic status (lower income and education levels).
If the top were actually “working harder” it would be showing up in their health. It is not.
Of course, as others have noted, there is the question of what defines “working harder”? Are we talking simply more hours or more hours with more outside demand for results. Both are working longer. Are we talking greater productivity per hour worked individually, or are we talking greater productivity per hours worked based on people influenced? Just a couple of examples.
Some of the 1% work harder, some do not.
Some of the 1% do work of great value, some do not.
And, of course, no mention of the exempt, non-exempt gap. Most workers are non-exempt which means they are paid by the hour and paid more for overtime so employer’s do whatever they can to minimize their hours. That’s why the median work week has been shrinking for decades now. These are also relatively poorly paid workers, so most of them would love more hours and more money, but that’s all beyond their control. Exempt employees are paid based on an annual salary, so their marginal cost of an hour is zero. They have been working longer hours, though they get much better pay than non-exempt employees. They might have a bit more control of their work, but a lot of them would love to work shorter hours, but this is generally beyond their control.
In the old days, this was called the working class – middle class gap, but we are no longer allowed to talk about class for some reason.
I don’t think that is quite right. The meaningful divide isn’t between exempt and non-exempt. It’s between full and part time. Having 2 mployees at 20 hours per week each is cost effective for an employer, compared to one at full time, since they avoid paying any benefits.
Working an on-roll employee 60 hours or more a week is cost effective, irrespective of O/T premium and non/exempt status becasue it’s more cost effective (and flexible) than hiring another on-roll employee.
Right you are. 🙂
To be fair, many of the 1%ers (in terms of income) are highly competitive. Since they are not as smart as everybody says they are, the way that they show their worth is to put in long hours. They are not paid overtime, and that’s good, because the law of diminishing returns has long ago kicked in (as far as productivity goes), but it never kicks in as far as competitiveness goes.
I don’t think there’s much surprise that with income inequality comes leisure inequality since much of a part of leisure is spending and of course the more money you have the higher the quality of liesure you can afford.
Jake, an NJ cpa
Does having more ‘leisure’ mean you work less hard? What a strange idea. And here I thought everything was about ‘productivity’. Which should mean the more leisure you have, the better worker you are. Hahahahahahaha. But I suppose that just shows what a ‘low’ education I have!
Critical failure 1 – many of the higher-income professions are not “hourly wage” jobs. A Wall Street banker works for his (or, more rarely, her) base plus bonus plus perks, and if working 20-hour days is what does it – so be it.
Conversely, many of the lower-income professions are strictly “hourly wage” – stockboys and cleaning ladies, proverbially speaking. Including overtime (which no employer wants to pay). Fixed workweek vs. variable workweek – guess what the outcome of any “leisure study” is going to look like.
Critical failure 2 – statistical simplifications, at least as apparent in the post above. Higher educated does not universally equal “higher earning” (to wit – legions of lawyers who do not make it to a white-shoe law firm after graduating). In addition, if entire “cohorts” are considered, you have to control for difference in unemployment and part-time employment rates between them (how many out-of-work doctors vs. machinists are there?), because in aggregate this will skew leisure time figures one way or the other. I hope the study in question used proper controls, but none of the text above seems to give me the details on such.
Bottom line – it’s a nice, ego-stroking headline that also induces a healthy volume of flame wars under the right circumstances, particularly insofar as it fits preconceived notions. As an actual scientific finding – give me a break. Or, rather, a lot more details and rigor.
“evidence that higher-educated (and therefore higher-earning)”
I think the author of this article is simply latching onto the “1% / 99%” meme without considering whether its really relevant.
“higher-educated (and therefore higher-earning)” is not the same as “members of the 1%”. The chief characteristic of the 1% is that the majority of their income comes, not from remuneration for their labor, but rather from control over assets. Bill Gates doesn’t fall under the ‘higher-educated’ definition.
My friend sent me this while he was “at work.”