Tuesday, August 26, 2008

What if they threw a government job and nobody worked? 

Americans for Limited Government is running a petition protesting a four-day work week for Federal government employees. They only work four days and get paid for five, we're told. Well, no, not really. They still work 40 hours, just over four days. School districts have been proposing this around the country, including here in MN.

But suppose they did cut back to a 32-hour work week? What would be the loss in output? It would be a lot less 20%. The last ten percent of the time we produce just barely enough to cover the wage we receive. It's pretty reflexive to think every hour those workers put in is a waste. Waste is something that occurs at the margin -- we use too many workers. There's no incentive to get the right number of workers. If we asked them all to produce the same output and just removed every fifth worker, they might make it and they might not, but diminishing returns would have to imply the lost work is not one-fifth.

I'm not signing the petition; we might end up with a good experiment.