We take a look at why we're not leading the life of leisure John Maynard Keynes predicted.
The 44-hour workweek was considered long overdue when it became a right under the Fair Labor Standards Act of 1938. Two years later, Congress shortened it to 40. A lot has improved since then, but not this particular figure – in fact, it's gone in the other direction. Today, by some estimates, the average American works as many as 47 hours per week. In certain industries, such as tech or finance, you're lucky to manage a week under 60.
This wasn't always the plan. In 1930, British economist John Maynard Keynes made a series of predictions about the state of the Western world 100 years hence. One prediction was that technological change will have progressed far beyond anything he could imagine. For another, compound interest will continue to accrue at 2%, such that the standard of living will increase four to eight times over. Finally, because of all this, no one will have to work.
OK, we'll work occasionally – only because, according to Keynes, "we'll be too glad to have the small duties and tasks and routines … three-hour shifts or a fifteen-hour workweek may put off the problem for a great while."
We're now only 11 years away from Keynes' future, and so far, he's two-for-three on his predictions. Mechanization has replaced most forms of manual labor, machine learning targets us with ads based on our internet history, and computerization allows us to summon all the world's knowledge at our fingertips, whether that's Ariana Grande's birthday or the current value of your Bitcoin wallet.
Meanwhile, not only has standard of living increased four times over since the 1930s, but U.S. per-capita income has increased more than eightfold. We may take economic growth for granted now, but at the dawn of the Great Depression, Keynes' predictions were bold – and his back-of-envelope calculations have proven startlingly accurate.
With the first two predictions right on target, we can assume that Keynes was not totally bonkers when he claimed we'd be working 15 hours per week right about now. In some regards, work has indeed declined. Time spent on housework dropped from 40 hours per week in 1930 to 18 hours per week in 1975 (though women joining the labor force played a part in this). Many European countries have seen a decline in working hours and an increase in vacations in the last century (though nowhere near 15 hours per week).
Despite all this, most of us are still grinding away at our 40-plus hour workweek – a fixture that has remained unchanged in the United States for nearly a century. Nor is leisure a luxury of the wealthy – indeed, those most likely to work long hours are highly educated, highly paid, upper managerial, salaried and male. No supply-and-demand curve nor compound interest calculation could have prepared Keynes for this paradox.
For those of you who are miffed by now – cheated of the 15-hour workweek you were promised – here are five possible explanations for where Keynes went wrong in his prediction, and why he's unlikely to be proven right in the next decade.
1. The opportunity cost is too great.
Keynes' prediction makes sense under the logical assumption that the more money we make, the less we need to work. If standard of living continues to multiply, then eventually, he reasoned, we'll all be living a Downton Abbey-like life of leisure, supplemented by the occasional bird shooting or local hospital fundraiser (but for only fun, not for want of sustenance or wages).
Instead, the more money we make, the more we suffer from the knowledge that every hour not optimized, week of vacation or year of sabbatical is money down the drain. The higher the wage, the greater the opportunity cost of leisure, which leads to the next point: Why work less when you could buy more?
This paradoxical response to an increase in wages – where some work more because they earn more, while others work less because they don't need to work – was first observed by economist Lionel Robbins in the same year that Keynes made his prediction. If only Keynes had the high-speed technology he predicted, perhaps he wouldn't have spoken so soon.
2. There's so much more to buy.
That leads to another problem with Keynes' assumption that more wealth plus better technology equals less work: Middle-class people back then didn't have smartphones. They also didn't have refrigerators, modern cars, sprawling single-family homes, fancy college degrees required for every type of job, or AirPods, all of which necessitate more time working.
But before you beat yourself up too much, think about where you'd be in life if it weren't for your smartphone or personal computer, with their ease of communication and information-locating. Sure, you could've done fine in the '90s (or even '30s), but the playing field was level back then. Today, no one is going tolerate an employee who uses snail mail to communicate or writes market research reports with outdated library books in twice the amount of time. As our technology improves, so do our standards – and the standards of those around us.
3. We're incentivized to work longer.
Even among those who can afford it, resolving to work less is easier said than done. The 20th century replacement of hourly wages with fixed annual salaries means few white-collar workers have such customizability over their hours. The modern work contract also rules out job-sharing. Fringe benefits such as healthcare represent fixed costs for employers, making two 20-hour employees more expensive than one 40-hour employee.
Meanwhile, tournament rewards systems, such as the promise of promotions or bonuses, encourage greater levels of time commitment. In Psych 101, this is described as variable interval reinforcement. Unlike with an hourly wage, it's unclear how much input it takes to get an output, which only encourages a faster rate of work over a longer period of time. When there's no guaranteed amount of time it will take to get a promotion, there's no cap on working hours for ambitious employees.
4. There's a higher economic ladder to climb.
That's not to say no one has managed to quit the rat race. Thanks to an extremely frugal lifestyle and the successful sale of his business, Jeremy Schneider, a former tech entrepreneur, was able to retire at age 36.
"Some people can certainly live working 15 hours per week. I can personally live indefinitely working zero hours per week," said Schneider, who spends his retirement working on his blog, Personal Finance Club. Schneider is an active member of the FIRE (Financial Independence, Retire Early) movement on Reddit, which advocates for living well below one's means for as long as it takes to achieve financial freedom – which, for many, means achieving the goal of retiring in their 30s or 40s.
"It seems like there's plenty of wealth, at least in the U.S., for most of us to be able to live on 15 hours per week of work," Schneider said. "One problem seems to be massive wealth inequality."
Income inequality has indeed been on the rise. A 2017 review found that the top 1% of U.S. adults earn, on average, 81 times what the bottom 50% of adults earn, compared with 27 times in 1981. As Schneider points out, while it may be possible to work less with the average American wealth, that's not possible when it's concentrated among a select few.
Widening income inequality also means the goalposts are constantly moving. In his book The Price of Inequality, economist Joseph Stiglitz argues that one problem with Keynes' prediction is that the higher the ceiling of wealth becomes, the more there is to work toward – and the more hours they're going to put in to get there.
5. Work to live or live to work?
Finally, there's something Keynes failed to consider that's probably foremost on everyone's mind – work is fulfilling. A cynic may call it workaholism, or blame it on America's Puritan roots, but for many, work gives meaning to one's life and can even be enjoyable.
In fact, perhaps even more surprising than Keynes' 15-hour workweek prediction is his "general disparagement of working overall," said economist Richard Freeman in an essay on Keynes. "Evolution presumably imbued us with a work ethic for our survival and not a Garden of Eden existence. That is fine with me."