What money still can’t buy

We seem to be working longer even though many don’t need to

Time and money – two things that we can never seem to have enough of. Economic theory suggests that we have the ability to choose between the two in terms of coming up with our own mix of work and leisure. As we earn more, it would be expected that people would also want more time off, but data suggests that even those earning big pay packets are working longer. Is the lure of being able to earn more and more likely to see us forever stuck at work?

We all need to work to provide ourselves with food and a roof over our heads. But few of us want work to be all-consuming so that we don’t have time for anything else. The balance between time and money has been mediated through the 40-hour week even though there are many that work overtime as well. Lots of jobs offer flexibility in terms of working hours, but uptake of “flexitime” seems to be limited and the nine to five schedule continues to dominate.

If we continue to work a full working week and more, economic theory suggests that we prefer money over time. This seems even more true for those earning more who tend to work even longer hours than the rest of us. In high-paying work such as law, consultancy, or finance, studies show that workers in the United States tend to spend at least 60 hours on the job. This would suggest that no matter how much money we earn, we still want more pay instead of opting for some additional leisure time.

Economists would counter with the argument that time-off is expensive when you are earning big money. This relies on the concept of opportunity cost, which refers to, in this case, that any time not working means forgoing all of the wages you could have been earning. Another reason for big earners being happy to put in the hours might be that the work itself is pleasurable in terms of providing challenges and opportunities to develop. If this was true, time-off is not as necessary when you enjoy what you do for a job.

Another reason that people might work more than they want to is that employers that pay well also demand a certain commitment to the job. On the other hand, jobs with flexibility seem to involve less responsibility and tend to be more clerical in nature. The higher pay may be needed to attract more talented workers as the larger scale and faster pace of global operations may demand more of employees. It also may be that because jobs offering big money are scarce enough that companies will expect their employees to work harder to keep the job.

This takes us back to opportunity cost. To work less and leisure more not only involves missing out on wages but also involves shifting to work that pays less even when on the job. The trade-off then becomes even more unfavourable. The move to a lesser role with more flexibility will also likely to be a less rewarding job with less responsibility, thus adding to the reasons why it pays to put in the hours at work. It is only after a slog up the corporate ladder (along with the build-up of skills) that more options become available to balance out work and leisure.

The rest of us (who might be able to afford more time off) seem to follow along with those earning more than us. People tend to be aspirational and look to the habits of the well-off to see how they should lead their lives (along with other things such as politics). This feeds through into our spending where we tend to buy things not only for our own pleasure but also to keep up with everyone else (known in the lingo as “positional goods”). Time to ourselves, on the other hand, is not something that we can show off like a flash car or a new kitchen. We are also devoting more money to our children to help give them a leg up in an increasingly competitive job market. Even an exotic holiday away (which looks good on Facebook) comes with a hefty price tag.

The more well-off among us can afford to buy back a bit of time in the form of hiring others, such as nannies or cleaners, to do tasks that we don’t have the time for. But it leads the rest of us with harried lives where earning money takes priority over other things that have been shown in studies to bring us more pleasure such as spending time with family and friends. Moving to a life beyond money will not be an easy choice to make for people as individuals until bigger changes are made in terms of how we work. Until then, better keep working at it.