Monday, January 28, 2008

All work and no play

So, since we just finished talking about earnings stagnation, I figure it's time to note another inequality gap that's been growing over the years: the Leisure Time Gap. Modern technology and productivity aids have allowed Americans to enjoy ever more free time each week. Unfortunately, not some segments of the population have been left behind. It looks like the rich haven't gotten their fair share of the leisure time gains.

Now, there are some free marketeers who don't see a problem here. In their minds, the rich are making a free choice, opting to work harder and longer for more money instead of taking a break and earning less. They don't see a problem with a society where honest rich folk are forced to make a decision between surplus earnings and free time.

But I do see a problem. Asking a rich person to sacrifice some of his money in order to get some time with the kids is liking asking a Wal-Mart employee to sacrifice some of his free time in order to take night classes and train up for a better job. That's being a little cold-hearted, isn't it?

My proposal? A fair-minded progressive tax. We can set a "leisure poverty line" at 80 hours worked per week or so. Any CEOs, attorneys, surgeons, or other folk who work more than 80 hours per week would be considered impoverished and would not have any obligations under the system. Those working 80-60 hours/week would be taxed 10% of their leisure time, those working 60-40 would be taxed at 15%, 25% for 40-20 and 35% for 20-0. The numbers could be adjusted as we see fit, but you get the general idea.

As with the income tax, the purpose of the progressive taxation would be redistributive. Using needs-based screening, we'd aim to place the maximum amount of leisure time in the hands of those who have the least under the current system. A workaholic CEO for instance might currently be working 90 hours a week and earning $10 million a year, clearly well below the leisure poverty line. The beggar camped out in front of the CEO's office building might be earning a hundred dollars a week on 0 hours of productive work. Under my system, the beggar would be taxed 35% of his windfall leisure time and would be expected to perform 39.2 hours/week of unpaid labor for the CEO. That's 168 hours, minus a 56 hour/week sleep allowance, multiplied by 35%. We might also consider allowances for eating and/or exercising, subject to such restrictions as might be negotiated in committee or decreed by the executive branch after enactment.

Certainly there are some inefficiencies in the system. The beggar might for example lack poise in the board-room or might not be fully informed about the market in which the CEO's company is engaged. While these potential inefficiencies are readily acknowledged, we must accept that equality is worth some minor sacrifices from society at large.

Hat tip Tim @ 4HWW.

4 comments:

Jim Apple said...

How about we just allow the poor to make the same trade that the rich can make with ease?

I think if you look at the lives that the poor have chosen in this country, you will find very few who are choosing leisure over wealth.

Me said...

How about we just allow the poor to make the same trade that the rich can make with ease?

That sounds like something that I can get behind. How do we do that?

I think if you look at the lives that the poor have chosen in this country, you will find very few who are choosing leisure over wealth.

I agree, at least not explicitly. Of course I also suspect that many workaholics never really consciously chose wealth over leisure either. The point I was obtusely striving at is that there are a lot of outcomes out there that people are willing into their lives (voluntarily or not). Further, we can go down the wrong road when we clumsily attempt to help people make those choices for themselves.

I think that, by the time that you've got 2 kids and you're trying to support them by working at Wal-Mart -- or 2 kids that you never see because you're always in the board room, you've already made some bad choices. Most likely, you didn't realize that they were bad choices at the time. It's entirely possible that you didn't realize that they were choices.

That said, they were your choices. From an ethical standpoint, it seems unfitting that others should be empowered to restrict your ability to make those choices. From a practical standpoint, the attempts we make at redistributing outcomes can have some yucky side-effects.

The solution for me is two-fold. First, encourage any activity that would serve to educate folks about the consequences that might come from the choices that they make. Second, shorten the feedback loop by avoiding policies that would insulate folks from the effects that they cause. This isn't an isolationist argument so much as a moral hazard argument. The children of the Wal-Marter and the workaholic are probably both going to contribute less to society than those that would come from a more well-organized household. I'm not negating the social impact here. Still, bailing out the parents in this situation separates cause from effect. Basically, subsidizing something leads to more of that thing. If the thing you're subsidizing is non-optimal behavior...

Jim Apple said...

That sounds like something that I can get behind. How do we do that?

Publicly funded social programs that you may despise, like better public schools.

From an ethical standpoint, it seems unfitting that others should be empowered to restrict your ability to make those choices. From a practical standpoint, the attempts we make at redistributing outcomes can have some yucky side-effects.

I agree with you, but if you want to discuss these things, I think you have to talk about balance, rather than just dismissing social welfare programs as misguided.

I agree with you that subsidizing childcare for poor children will encourage the poor to have more children who will then draw more from the public coffers. The alternative is poor children, and I think the ultra-wealthy can STFU about the ethics of wealth redistribution until US kids don't have to forgo doctor's appointments because of the cost.

Me said...

First, thanks for commenting! I write this stuff largely to work out my own opinions on matters that are pretty damned complicated. It's hugely useful to have a really smart critique of my mental discharge. Anyway...

Me: That sounds like something that I can get behind. How do we do that?

Jim: Publicly funded social programs that you may despise, like better public schools.

Actually, I'm quite disturbed by the fact that education is something of a luxury good. Unfortunately, I'm pretty sure that the money we're throwing at the problem right now isn't helping much. Worse, I'm not even sure that I can identify a place where money CAN be thrown to make a difference. I'm not opposed to public education on principle, but I'm concerned that it's both expensive and bad. If it were just one or the other things might be easier. More on that in a later post perhaps.

Me: From an ethical standpoint, it seems unfitting that others should be empowered to restrict your ability to make those choices. From a practical standpoint, the attempts we make at redistributing outcomes can have some yucky side-effects.

Jim: I agree with you, but if you want to discuss these things, I think you have to talk about balance, rather than just dismissing social welfare programs as misguided.

That sounds fair, and certainly social programs are here to stay. As Churchill would put it, we've already established what kind of state we are, now we're just haggling over price. Social programs are market distortions, that's the entire point. We just have to be vigilant or else the distortion we get might not be the distortion we wanted.


I agree with you that subsidizing childcare for poor children will encourage the poor to have more children who will then draw more from the public coffers. The alternative is poor children, and I think the ultra-wealthy can STFU about the ethics of wealth redistribution until US kids don't have to forgo doctor's appointments because of the cost.


Wrt to poor children, you're after an "in the long run, we're all dead" argument here, right? I'm not insensitive to immediate need, but treating symptoms isn't doing anything for causes (i.e., WHY are there a bunch of children whose parents can't afford doctor's visits?). We've had welfare and Medicaid for a long time now, yet still we have poor people. Is there a new idea here, or is the claim that current social efforts are all that's needed, we just need to fund them better?

You're right that this is a matter of balance: treatment of the short-term problem exacerbates the long-term problem because we're separating cause from effect and effectively subsidizing socially costly behavior.

I'd like an economy strong enough that we can afford to provide, food, shelter and healthcare for all who are unwilling or unable to provide it for themselves. Unfortunately, I don't think our present economy can provide that degree of surplus without undue strain. Something worth exploring, I think.

As for the ethical argument, I intended it the other way - I don't feel comfortable telling someone who has chosen leisure time over wealth that he made the wrong choice. Then again, I also don't think that it's sustainable for society to supply the wealth that he forewent so that he can have his cake and eat it to, but that's a practical argument.