http://www.businessweek.com/articles/2012-07-19/americas-leisure-gap

Opening Remarks

America's Leisure Gap


America's Leisure Gap

Illustration by Erik T Johnson

Enough with the 80-hour weeks. Event producer Josh Wood is finally taking a real vacation. He’s departing for all of August to travel through Spain, Italy, and Greece, and he’ll be unplugged from the phone and Internet the whole time.

Well, not completely unplugged. He did ask the staff at New York-based Josh Wood Productions to forward urgent messages to a special e-mail box. Wood says he wants to spend the month writing. Well, not exactly literature. He wants to open a gym in Manhattan and needs to draft a business plan. So, come to think of it, parts of his grand tour of the Mediterranean may end up resembling a day at the office, only with better scenery. Wood loves what he does. He also concedes that his inability to take an all-in vacation can seem “a little screwed up.”

Wood is comparatively lucky. Another segment of society is on an unpaid, open-ended vacation it never asked for. Then there are those who have jobs but can’t scrape up the funds to rent even a homely cottage by a weedy lake. “It’s financially impossible for me to support the both of us, even if we just go on a small trip, like, to Wisconsin and get a small hotel and stay for a couple of days,” says Dennis Lee, 31, a sales and marketing associate in Chicago whose girlfriend is out of work. “I just had a $1,700 bill for a new transmission for my car.”

“When I have time I don’t have money. When I have money I don’t have time,” says Glenn Kelman, chief executive officer of online real estate brokerage Redfin. He credits that bit of wisdom to a Russian proverb. It’s also a lyric in the hip-hop artist Akon’s song Time Is Money. Some truths are universal.

The dysfunctional elements of the American economy are never more obvious than at vacation time, when people whose services are in constant demand strive to power down and join those whose services are not in demand at all. This August is likely to be the fourth in a row in which the U.S. unemployment rate will be over 8 percent. That hasn’t happened since the Bureau of Labor Statistics began keeping records in 1948.

There’s a school of thought that says unemployment is largely voluntary, because people could find work if they didn’t ask for so much money. University of Chicago economist Casey Mulligan argued in 2009 that unemployment rose in 2008 because the labor supply curve “shifted to the left.” In other words, people became less willing to work. Maybe they deliberately earned less so they could qualify for mortgage modifications, or to get the IRS to ease up on collecting back taxes, Mulligan speculated.

Asked how much of today’s unemployment he considers voluntary, Mulligan responded by e-mail: “I’m not sure what voluntary means. Is someone voluntarily unemployed if he receives and rejects a job offer that is not suited to [his] skills or interests? Is someone voluntarily unemployed if he fails to apply for positions that are not well-suited to his skills or interests?” He added: “I estimate that half of the drop in the employment-population ratio came from an expansion of the social safety net.”

This theory, that a sturdy safety net makes it easy to pass up work, seems to say that a large share of the jobless have essentially been taking one long summer vacation since the end of 2007, when the Great Recession began. To paraphrase Ronald Reagan: It’s August in America.

Mulligan isn’t alone in asserting that the unemployed and underemployed get at least some enjoyment out of their free time. “As long as leisure has some positive value,” then focusing just on the superior material condition of well-educated people who work long hours “will overstate the true inequality in well-being” between them and less-educated people with more leisure time, says a 2012 paper by economists Erik Hurst, Orazio Attanasio, and Luigi Pistaferri.

But how valuable is leisure if it’s involuntary? It’s far better to have money and not time than time and not money. University of Texas economist Daniel Hamermesh, who specializes in studying how Americans use time, points out that “a poor person does not have the opportunity to give up time to get income,” whereas a rich person can give up income to get more time. That so few choose to do so speaks volumes.

Give America’s middle- and upper-income families credit: They’re the new working class. In 1985 men whose education stopped at high school or earlier had two more hours of leisure than more highly educated men. By 2003-07 the leisure gap had grown to six hours. In top law firms, hedge funds, and corporate C-suites, a 50- or 60-hour week is considered coasting.

Contrast that with the desultory life of the unemployed. People who are looking for a job spend an hour a day more sleeping than full-time workers do and a bit more than an hour extra watching television and movies, according to the Bureau of Labor Statistics’ American Time Use Survey. Job seekers also average about half an hour a day looking for work and around 45 minutes in classes. The BLS doesn’t measure time spent stewing over the futility of existence.

Karl Marx, who had a chip on his shoulder about such things, referred to surplus labor as “a disposable industrial reserve army, that belongs to capital quite as absolutely as if the latter had bred it at its own cost.” You don’t have to be a Marxist to notice that in times of high unemployment, companies treat the unemployed cavalierly simply because they can. Peter Cappelli, director of the Center for Human Resources at the capitalist training ground known as the University of Pennsylvania’s Wharton School, says he got an e-mail from somebody in a company that had 25,000 applicants for a standard engineering position, of whom the staffing people decided that not one was qualified. “Could that really be possible?” Cappelli writes in his new book, Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It.

Come August, employed Americans meet on the beach to talk about how much work is piling up at the office. Or they just save the trouble by staying at their desks. “Most years I leave my vacation days on the table,” says Charles Rawls III, a 34-year-old bank marketing manager in Philadelphia. According to Expedia’s (EXPE) 2011 Vacation Deprivation study of 7,000 people in 20 countries, U.S. survey respondents had an average of 14 days of vacation a year and took 12 of them. The Japanese got 11 days of vacation and took only 5. Then there are the French, who said they got 30 days—and took all 30. That’s savoir vivre. In June the European Court of Justice ruled that workers in the 27 nations of the European Union who get sick on vacation are entitled to take another vacation.

The U.S. Supreme Court will never hand down such a decision. To a lot of Americans, there’s something vaguely unethical about walking away from work. Which is why President Barack Obama is skipping his Hawaii vacation this summer and why Mitt Romney was pilloried for having a good time in New Hampshire. Eric Horwitz, who is Josh Wood’s executive coach, admires his client’s determination to detach but understands exactly how hard it is for him and other latter-day sorcerer’s apprentices to resist their enchanted smartphones. “We’re starting to create things we don’t need,” says Horwitz, CEO of Manhattan-based Gem. “But we don’t know how to shut them off.”

This wasn’t John Maynard Keynes’s vision of the future. In 1930 the British economist wrote an essay called “Economic Possibilities for Our Grandchildren” predicting that within a century, technology would have obviated nearly all human labor. “For the first time in his creation,” Keynes wrote, “man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.”

That quote appears in economic historian Robert Skidelsky and his son Edward’s forthcoming book, How Much Is Enough? Money and the Good Life, which they adapted for a June issue of the Chronicle of Higher Education. They wrote that the once-noble concept of leisure as creative freedom has “degenerated into passive consumption,” and that is why “we throw ourselves into work as the lesser of two evils.”

Unless nobody wants us, in which case work is not the lesser of two evils but an unattainable good. That is the paradox of August.

With Claire Suddath
Coy_190
Coy is Bloomberg Businessweek's economics editor. His Twitter handle is @petercoy.

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