A Silver Lining to Unemployment?

(Photo: NCinDC)

(Photo: NCinDC)

Friday’s labor-force data brought liberal outcries, and a comment from Ben Bernanke, that the drop in labor-force participation indicates unemployment is really much higher, and the economy in worse shape, than the 7.3 percent unemployment rate might indicate.  It is true that participation for men is at a postwar low and has decreased by 3-1/2 percentage points since the 2007 cyclical peak; and women’s participation stopped rising in 1999 and has fallen by 2 percentage points since the peak.

Is this so bad? Yes, if labor-force leavers are desperate to work and just get discouraged.  But perhaps no; perhaps it has taken the Great Recession to get Americans to realize that we shouldn’t be working harder than people in other rich countries and should be enjoying more leisure.  If this is so, perhaps there’s a silver lining in what so many people view as the economic doldrums of the last three years.


"To realize that we shouldn't be working harder"

So it's a truth that it's not good to work harder?

I might need more convincing.

karen H

I think the 'silver lining' is much more profound than a slight shift in our work ethic. Young people who have come of age in this economy are much less materialistic than their parents, among other things.


If kids today are much less materialistic than their parents ask them to put down their smartphones, ipads, and xboxes. Kids today have been spoiled to the point of not being able to understand the word materialistic.


I don't know about your conclusion. When was the last time you were unemployed? I don't remember it being very leisurely. I would be more convinced if you were talking about the underemployed. Do you really think people are quitting there jobs so that they can relax more? I image there may be some two parent homes where one parent is now staying home with the kids but I still don't see how that translates to more leisure.


I suspect that the majority of those who are not working have not chosen to not work because they are independently wealthy and wish to dedicate themselves to a life of leisure. That is, unless welfare and food stamps supply enough income that one can live comfortably on them, in which case they should be cut.

I look forward to the Obama administration defending a future set of unemployment numbers as "Americans deciding not to work so they can enjoy more leisure time."


We would be golden on working less if everyone actually worked less, instead of not working at all.


I would think that (assuming consumer demand stays the same) that large numbers of people choosing to work less (but still work) would actually increase employment numbers. As the currently employed voluntarily refuse overtime, or move to working less than 40 hours/week, new people would have to be hired to take up the slack.

Indeed, isn't this one of the chief complaints against Evil WalMart, that it hires a lot of part-time employees?


So the next step would be to look more closely at the numbers... Over time the spread between the U3 and broader U6 measures of unemployment. Then a decomposition of the Current Population Survey data for "persons not in the labor force" looking for trends over time. A quick search finds this table as a good starting point:


So how have the numbers of discouraged workers trended over time?

Freakonomics is about all about interpreting the data not anecdotes.

steve cebalt

I have never liked leisure time and I certainly would hate having it forced on me.

"we shouldn’t be working harder than people in other rich countries ..."

Why shouldn't we? Who says that Leisure is a core American value like it seems to be elsewhere? Do we have to sink to some lower common denominator? Work has virtues and rewards to society that I don't need to enumerate. Leisure? Not so much.

Not everyone values leisure as much as you do, perhaps.


In the new economy "leisure" is required to gain requisite skills in certain industries. Two of the biggest companies in the world were founded on skills learned during "leisure time":

Biil gates attended the private Lakeside School in 1968. The Lakeside school had a contract to lease mainframe time from General Electric. Bill Gates used that time on the GE Mainframe to practice writing commercial level software at 13 years old. Did your grandparents, you or your parents high school have such a contract in place, let alone even a single computer for student use in 1968? No, they did not. Bill went to a very prestigious high school with access to things in the late 1960's that only high tech colleges had in place. I'll give you a hint the tuition for Lakeside school is $27,250 a year today. Bill Gates parents essentially bought him leased time to use a GE mainframe in the 1960's when everyone else was still using pencils, slide rules and hand writing essays. So if Bill had gone off to work a part-time job in high school at a Taco Stand, someone else instead would have invented a product like Windows.

It was "leisure time" that gave Bill his edge, not "boot straps" or "sweat of the brow"

Mark Zuckerberg got his first computer in the 6th grade around 11-12 years of age in 1995 or 1996. Did you even own a home computer in 1995? My parents certainly did not own a home computer in the mid 90s, nor did many others in neighborhood at the time. What did a computer cost in the mid 90's? At least $1,000 back then, that $1500+ today per inflation. Computers were significantly more expensive during Bill Gates time and much less so for Mark Z, but during Mark Z's time the software cost were the "new expense" that Bill did not have.

It was "leisure time" that gave Mark his edge, not "boot straps" or "sweat of the brow"

Their parents PAID for them to be AHEAD of the game in regards to technology and education. Those fruits paid off in the end, despite neither going through the motions to get a diploma for their mostly completed college coursework, at prestigious universities.

It was "leisure time" that gave this edge, not "boot straps" or "sweat of the brow", if they had worked part-time while pursuing their studies they would both be somebodies employees today.

Same goes for the executive leadership at Riot Games and petty much every other venture capitalist backed company making their mark today. CEO's of today, for better or worse, don't start from the bottom or come from the production line. They come straight from their parents basement; and lately its been the ones who seemingly "sucked on the teet" the longest who seem to be getting the investor money needed to start their businesses.



Again Dan, show this stuff to somebody outside the faculty lounge before you post it. Or if you don't want to do that, at least run it past somebody who doesn't have tenure. Seriously, I'm trying to help.

Alex in Chicago

Indeed, this post makes no sense.

If he were right, we would be seeing more people at the high income levels in their 30s, 40s, and 50s working fewer hours, instead of the poor in their 20s, 30s leaving the workplace.


What a great idea! Especially when you consider these sarcastifacts:

-Working less will have no impact on your health insurance!

-The other rich countries where people work less are doing great--no class issues, no budget problems, no economic worries!

-The ability of people in rich countries to work less has nothing to do with the willingness of other people in those same countries to work more!

-Leisure time is costless, leisure activities are free, and neither have to be offset by some kind of productivity!

-Daniel Hamermesh has really been onto some great insights lately!


I wouldn't agree to the statement that being unemployed is a leisurely affair, but I can see how more leisure time might help reduce unemployment. If you're working 60-hour weeks and so is your colleague, you could both cut 20 hours and there's room for a third person. While companies may not be so eager to do this (more pay, more insurance costs), I think it would help the economy overall if more people are employed and therefore able to buy goods, raise their kids in a better way, etc.

A second point I would like to make, also in response to some other commentators, is to consider productivity. Yes, we could all work 60-80 hours per week, but can you truly be at your best for all of those? I personally believe it would be much better to work fewer hours, which gives you time to relax, enjoy the company of friends, and take a vacation or two. The company in return gets a well-rested, motivated employee who is able to concentrate during his time for the boss. You can see the relationship between work hours and productivity in the second graph on this page from the Economist: http://www.economist.com/blogs/freeexchange/2013/09/working-hours. The relationship is clear: work more hours, produce less per hour worked.



Does the author have evidence that those exiting the workforce are substantially from the leisure class and don't require jobs or is this column the equivalent of a sophomore bull session: "what if somebody invented a flashDARK?"

Evidence would be interesting. Idle speculation, not so much. People tend to define themselves in part by 'what they do.' If those leaving the workforce are doing so voluntarily we should be seeing substantial upswings in charitable work and purchases of leisure goods. I am not aware of data showing either.

In fact we have happily shuttled off millions of jobs to low labor rate countries and in the process shifted the US GINI coefficient sharply upward. Further, we have supersized (Wal-Marted?) the remaining American businesses eliminating more jobs. Creative destruction is rather different from selling off American productivity for a few more baubles for the hyperwealthy and a few cents cheaper price on Barbie Dolls. These displaced workers don't fall off the face of the earth. They consume but do not contribute - a toxic combination that has led to permanent underclasses in this country already. And that consumption is paid for in large part by the diminishing middle class.


steve cebalt

A contrarian view of leisure vacations: Why vacations are horrible and why I never take one.