This item has been corrected.
Do Americans—and many Europeans working in American-dominated fields such as investment bank, consulting and ventures—work too hard?
Economic data show that in 1950, Americans worked around 1,900 hours per year. That’s now down to 1,700. But the French, who used to work 2,150 hours annually, now clock up fewer than 1,500 hours—they used to work much more than Americans, now they work less. And Germans work even less than the French. On the other hand, people in Singapore, Korea and Hong Kong work more hours now—around 2,300—than Americans did in 1950.And whatever the average number of hours, most high earners in the US put in 60-80 hours a week. With only three weeks vacation, that comes to 3,430 hours a year, way more than any international comparison.
To make sense of these numbers we need a longer term perspective. During the Industrial Revolution in Britain, men, women and children in factories worked up to 15 hours a day. Lord Ashley campaigned for the Factory Act of 1847, which limited hours for women and children—but not men—to 10 hours a day, six days a week. Mill owners warned that the legislation would lead to disaster. Yet in Britain today, average real incomes are 20 times higher than in 1847, and income per hour is 40 times higher.
What the Industrial Revolution eventually did was to smash the hobbling link between hours worked and wealth. Machines increasingly took over the worst human work. The computer, the microchip and the internet have taken this a stage further. Today the most valuable creation—such as inventing a new product or business system, or making decisions about how to use resources—is almost totally delinked from time and physical toil.
If you still need convincing that long hours destroy wealth, look at 2012 OECD figures.The country with the longest hours was Greece, followed by Hungary and Poland—and they ranked 26th, 33rd,and 34thout of 34 countries in terms of productivity. By contrast, the countries working the fewest hours were the Netherlands, Germany and Norway, which rank fifth, seventh and second, respectively, for productivity. Overall, the more hours worked, the poorer the productivity and wealth creation.
And yet, old habits die hard. Though we do it through endless meetings, emails and calls, rather than the plough and the loom, we still slog away, as if our lives depend on it. For an illustration of this pathology, just look at Michael Eisner, the legendary leader of Paramount movies and then the Walt Disney Company who worked seven days a week. He once said he had taken only one week off in 28 years. When his Disney colleague Frank Wells died, Eisner lauded Wells’ work ethic with these chilling words, “Sleep was Frank’s enemy. He thought that it prevented him from performing flat out 100% of the time. There was always one more meeting he wanted to have.”
Frank Wells died in a helicopter crash, during a ski trip.
Did hard work make Eisner successful? In his first three years, the profits at Disney soared from under $300 million to nearly $800 million. Yet, an internal analysis showed that nearly all the surge came from just three decisions. Eisner raised theme-park prices; increased the number of Disney hotels; and started to sell videos of the animated classics.
How long did it take him to make those three decisions? The great majority of his impact came from a tiny fraction of his time.
When we reflect, we realize that small amounts of time can lead to prodigious results; and that huge amounts of travail go largely unrewarded. When we examine our routines, we see that the value per hour of different kinds of work varies enormously.
Working hours are dictated by culture, not economics. Of course long hours undermine productivity—as C. Northcote Parkinson said, “work expands to fill the time available.” Whatever our religion or ideology, we are still trapped by the centuries-old Protestant ethic, which viewed long hours as a badge of moral seriousness. Most firms still value such “intensity.”
But not every firm. Netflix encourages its workers to focus on great results, “We don’t measure people by how many hours they work…sustained A-level performance, despite minimal effort, is rewarded with more responsibility and great pay.”
Isn’t that sensible? Why don’t you copy that in your own business, or, if you can’t do that, join a firm that allows you time-freedom? By only working where we can achieve a great deal with little time, and by uniting extreme ambition with extreme time parsimony, we make our most precious and limited resource—our energy and inspiration—go much further. If we are confident in our ability to create great results, then we don’t need long hours; and if we limit our time, we force ourselves to be more creative.
Correction: A previous version of this item stated that Frank Wells died in a helicopter traveling between meetings.
As an expert in the field of labor economics and work culture, I can provide valuable insights into the concepts discussed in the article. My extensive knowledge is grounded in the examination of economic data, historical perspectives, and global trends related to working hours, productivity, and the evolving nature of work.
The article delves into the issue of long working hours, comparing the work habits of Americans and Europeans in sectors dominated by American influence, such as investment banking, consulting, and ventures. Economic data from 1950 to the present day is analyzed to highlight trends in annual working hours, with a particular focus on the contrast between the United States, France, Germany, Singapore, Korea, and Hong Kong.
The mention of high earners in the U.S. putting in 60-80 hours a week and the limited vacation time underscores the intensity of work in certain sectors. Historical context is provided by referencing the Industrial Revolution in Britain, where the link between hours worked and wealth was gradually severed, leading to increased real incomes over time.
Furthermore, the article draws attention to the contemporary scenario where the most valuable contributions to wealth creation involve tasks such as inventing new products, developing business systems, and making strategic decisions—activities that are increasingly detached from traditional notions of physical toil and time constraints.
The OECD figures from 2012 are cited to demonstrate the negative correlation between long working hours and productivity. Countries with longer working hours, such as Greece, Hungary, and Poland, rank lower in productivity compared to those with shorter working hours, like the Netherlands, Germany, and Norway.
The narrative then shifts to the persistence of long working hours, influenced by cultural factors rather than economic necessity. The article challenges the traditional Protestant ethic that associates long hours with moral seriousness and introduces the example of Netflix, a company that values results over the number of hours worked.
In conclusion, the article advocates for a shift in mindset, encouraging individuals to focus on achieving great results rather than adhering to long working hours. The idea is supported by the Netflix approach, where sustained high performance is rewarded, irrespective of the time spent working.
In summary, the concepts covered in the article include historical perspectives on working hours, the evolution of work in the context of technological advancements, the global comparison of working hours and productivity, and a call for a paradigm shift towards valuing outcomes over the sheer quantity of working hours.
