One of the most basic concepts in economics and business is marginal or incremental cost, the additional cost needed to produce or purchase one more unit of a good or service. For example, if a business can produce 100 widgets at a total cost of $5,000 and 101 widgets for $5,500, the marginal cost of the 151st unit is $500. At that rate, the company has a disincentive to produce more than 100 widgets since the cost rises sharply (an average additional cost of $4.45 per widget).
The same principle applies to the cost of labor. Imagine a worker who makes $16 an hour for 29 hours per week but whose incremental cost for the 30th hour of work each week rises to $112.15. For the 29 hours of labor, the cost is $464 while for 30 the cost is $576.15. That sharp increase would prevent many employers from hiring workers for more than 29 hours per week.
In his latest column, Ross Douthat contemplates what a world without work might look like:
Imagine, as 19th-century utopians often did, a society rich enough that fewer and fewer people need to work — a society where leisure becomes universally accessible, where part-time jobs replace the regimented workweek, and where living standards keep rising even though more people have left the work force altogether.
If such a utopia were possible, one might expect that it would be achieved first among the upper classes, and then gradually spread down the social ladder. First the wealthy would work shorter hours, then the middle class, and finally even high school dropouts would be able to sleep late and take four-day weekends and choose their own adventures.” — “to hunt in the morning,” as Karl Marx once prophesied, “fish in the afternoon, rear cattle in the evening, criticize after dinner …”
Yet a widespread decline in work is not just an imaginative possibility. As Douthat goes on to argue, such decline has become “a basic reality of 21st-century American life,“ but without following the typical Marxist trajectory. “Instead of spreading from the top down,” Douthat notes, “leisure time – wanted or unwanted – is expanding from the bottom up. Long hours are increasingly the province of the rich.” Despite our persistent longing for rest and relaxation, however, this trend is not viewed as a positive development for society, even for the folks at Mother Jones.
Further, as Charles Murray explains in his latest book, Coming Apart: The State of White America, 1960-2010, our attitudes about work have also begun shifting, again, disproportionally among the lower classes. Pointing to a General Social Survey study that asked participants what they prefer in a job, Murray points out that the leading preference across all income groups during the 1970s was a job that “gives a feeling of accomplishment.” Soon thereafter, beginning in the 1990s, this preference began to shift significantly among the lower classes, who began to put higher preference on jobs with “no danger of being fired” or where “working hours are short.” (more…)
In an interesting side note, the state of Massachusetts still has blue laws on the books that prevent employees from working before midnight on Thanksgiving Day. The Boston Globe editorializes that “the blue laws are creating nothing but inconvenience; many stores adjust by simply opening at 12:30 a.m. instead of midnight. Workers still come in – but half an hour deeper into the night.”
One rejoinder concerning the relationship between Thanksgiving and Black Friday is that those who have to work on Thursday ought to be thankful to have a job at all, particularly in these times of economic hardship. This is certainly true, but I don’t think this means that employees simply have to silently accept whatever their employer demands of them. As I’ve said, the remedy for this moral problem is best sought in the context of the complex web of relationships between employees, employers, and customers. And we need not derogate the true blessing that work is to say that it ought to have its limits. It seems to me that the widespread impingement of non-essential commercial activity into holidays like Thanksgiving probably crosses these limits, at least in some cases.
All of this means that customers need to be more aware of what their shopping habits and practices demand of businesses. And some companies might realize that the moral demand in certain cases might mean not giving customers what they want (e.g. opening at midnight on Thanksgiving). A salutary example of this kind of response is found in the folks at Hobby Lobby, who have never operated on Sunday.
Their reasoning goes like this: “We have chosen to close on the day most widely recognized as a day of rest, in order to allow our employees and customers more time for worship and family. This has not been an easy decision for Hobby Lobby because we realize that this decision may cost us financially. Yet we also realize that there are things more important than profits. This is a matter of principle for our company owner and officers.”
It’s wonderful when we don’t need laws to tell us what’s the right thing to do.