Restricting Hours Makes Some People Sad But Most People Happy

Moneybox
A blog about business and economics.
Dec. 28 2012 9:13 AM

Restricting Hours Makes Some People Sad But Most People Happy

Adam Ozimek notes that as China shifts to more western-style regulation of permissable hours some people aren't happy about it. He cites the case of Zhang Jiang, a 21 year-old factory worker who used to put in very long hours to pay for his brothers' schooling but now works shorter hours, does less to support his family, and plays video games more. Ozimek's conclusion: "simply because you cannot imagine wanting to work 80 hours at a difficult job in a Chinese factory doesn’t mean you can necessarily help workers by banning them from doing this."

But once you consider that preferences vary, I think it's much more complicated than that. Zhang may be worse off with the new rule, but it could still be making the vast majority of Chinese workers better-off. Some minority of workers, Stakhanovites, just has a totally genuine preference to maximize their income by working 80 hour weeks. Then there's another large bloc of workers who feels torn between a desire to limit their hours and a desire to be considered hard workers. If working hours aren't regulated, the Stakhanovites will put in 80-hour weeks and the conflicted will feel compelled to do 60-hour weeks to prove that they're not lazy. The huge increase in labor supply this overwork represents will drive down hourly wages and further nudge people toward a high-work equilibrium. Restricting hours to 40 hours a week will make the Stakhanovite minority (and the factory owners) sad, but most people will be happier.

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I take it that's why you basically always see some kind of hours regulations in democracies. It's not that the rules aren't bad for someone—the Stakhanovites—it's that what happens in a democracy is you arrange things to suit majority tastes and most people don't like the Stakhanovite lifestyle.

The problem is that it's hard to know what limits to put on this kind of logic. I assume it would serve the interests of people in my line of work to pass a law preventing all these college professors from writing for free on the Internet and undercutting my wages. And perhaps of the Newspaper Guild had more juice, we would see laws like that. But it doesn't have much juice, and we should probably be glad that college professors are allowed to violate minimum wage principles and do my job for free. Not because letting people blog for free on the internet is pareto optimal or even because the "losers" in this arrangement are guaranteed offsetting transfer payments. The issue is a general sense that adults should be allowed to do what they want even if some other people would prefer that they didn't.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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