Productivity and the Workweek

Pre-industrial workers had a shorter workweek than today's

Debate on workweek reduction

The Workweek Reduction Equivalent: a measure of potential economic progress

Erik Rauch

Every quarter, government statisticians announce how much productivity has been increasing. This is measured in GDP per hour worked. Because there is no longer a correlation between income and individuals' satisfaction, a more relevant statistic is called for.

The Workweek Reduction Equivalent uses the same data, but presents it in a more meaningful way. It is the number of weekly hours that an average full-time worker could reduce his workweek, if productivity were applied to time rather than increased GDP.

For instance, output per hour in the US increased 4.5% in 2003, as calculated by the US Bureau of Labor Statistics. At an average workweek of 45 hours, the WRE is 2.0 hours - just for a single year. 2003 was higher than most years, but the average recently has been 1.2 hours per year. Over even just a decade, this really adds up.

This table shows productivity increase and WRE for recent years:
1996     2.8%     1.2 hours
1997     2.3%     1.0 hours
1998     2.6%     1.1 hours
1999     2.6%     1.1 hours
2000     3.0%     1.3 hours
2001     1.1%     0.5 hours
2002     4.8%     2.1 hours
2003     4.5%     2.0 hours

Of course, what productivity really measures is another issue - not all increases in GDP are good - but, like other alternate economic measures such as the 'Genuine Progress Indicator', the WRE could be a constant reminder of our misplaced priorities.