In a recent interview with New Hampshire’s Union Leader, Republican presidential candidate Jeb Bush offered his most ingenious solution to the United States’ income inequality dilemma: “people need to work longer hours and through their productivity gain more income for their families.”
His mild suggestion was motivated by his own aspirations for growing the United States economy by 4%. Herein lie the issues that arise when we use Gross Domestic Product as our sole benchmark of achievement and failure.
Fundamentally, Mr. Bush failed to recognize or consider his own nation’s comparative work schedule. Americans clocked an average of 1,788 hours per year as of 2013, according to the Organisation for Economic Co-operation and Development. According to this committee, the definition for ‘hours worked’ is, “the total number of hours actually worked per year divided by the average number of people in employment per year.” Compared with other nations, such as Germany, who clocked 1,363 annual hours, and Norway, who placed second lowest on the chart at 1,408 hours, Americans are far from idle.
As a point of comparison, there are approximately 8765.81 hours in a year. Therefore, on average, Americans work 20.3% of their year, while Germans spend 15.5% of their yearly time in formal employment. It doesn’t sound like much on paper, but considering Germany has increased in happiness by 0.163, according to the United Nations’ World Happiness Report, and the United States is, at last report, down by a value of 0.283 in the years 2012-2014, it bears consideration that perhaps more work is not the universal solvent to our substantial economic plight.
In fact, one might question the very nature of this economic plight. Unemployment in the United States is down from the dismal years of the financial crisis, so it is not an issue of joblessness. Underemployment may be a valid supposition, but how does one define ‘underemployment?’
According to Investopedia, underemployment refers to workers who are highly skilled but working in low-paying jobs, as well as skilled workers who are employed in low-skill jobs and part-time workers seeking full-time employment. In contrast, a Gallup poll from last summer determined that the average American works about 47 hours per week, which is nearly a full day longer than the classic 40-hour workweek.
Accordingly, if we are working more than enough hours and are, on the whole, unhappy with our jobs, yet unable to find better ones, what is the solution?
As former Secretary of Labor under the Clinton administration, Robert Reich so effectively put it, “The problem for most Americans isn’t work hours. It’s wages. Wages are still stuck in the mud. Half of Americans are earning less now than they did 30 years ago, adjusted for inflation. Almost all the economic gains have been going to the top. But Bush is against increasing the minimum wage or doing anything that would raise Americans’ pay.”
The solution to our economic dilemma is to raise the minimum wage. It did not originate for high school students and introductory workers, as commonly assumed. In June of 1938, President Franklin Delano Roosevelt signed 121 bills, including the Fair Labor Standards Act. It applied to industries whose combined employment represented only about one-fifth of the labor force. In these industries, the FLSA legally banned the exploitation of children and set the minimum hourly wage at 25 cents, as well as the workweek at 44 hours. The law was enacted to ensure a standard of security, both corporeally and financially.
A basic tenet of good business is that we invest money to make money — and there is no greater investment than in our workers. When workers are properly cared for and adequately paid, they not only produce superior work, but take pride and pleasure in it because their very purpose for working is not fruitless.
And best of all? Gross Domestic Product, which is calculated either by totaling income or expenditure over a year’s time, increases when businesses invest money in the labor force because these people are also consumers. It’s a win/win.