The US workforce works less
If it feels like there’s been “Now Hiring” signs on storefronts and slower service as a result of pervasive staff shortages for years, that’s because it is.
The US is still in the midst of a labor shortage, with approximately 10.5 million job openings available in November. And while there’s been a lot of talk about the lower labor force participation rate following the COVID-19 outbreak and missing workers who have yet to come back, that’s not the whole story.
It turns out that not only are we short of workers – the US workforce as a whole is working less. And the decline in hours worked could have more significant and long-term effects.
“The labor supply gap may arise not only from fewer people working or looking for work (lower participation rates), but also from workers working fewer hours,” write authors Dain Lee, Jinhyeok Park, and Yongseok Shin of Washington University in St .Louis in a new report.
That’s really a big deal, says Shin wealth. The figures show that the reduction in working hours may actually be more important than the participation rate, which fell by 1 percentage point between 2019 and 2022.
Ultimately, when Americans work less, it means employers must find more workers to maintain their past levels of productivity. Though Americans have reduced the number of hours they work since the 1950s, the average stabilized in the 1980s and hasn’t changed since — despite continued declines in other developed countries, Shin says.
“The US is a very special country where people value work so much and really adore hard work that they work so many hours compared to other European countries,” says Shin.
But since the pandemic began, that has shifted. The decline in hours worked was more pronounced for men than for women, particularly among men with a bachelor’s degree and those in their prime (ages 25 to 54). Essentially, Shin and his team found that the decline is more likely due to those who can afford it than to lower- and middle-class Americans struggling to get hours. In other words, the rejections are voluntary.
And the reduction in working hours has proven to be sustainable. “The fact that it lasted into 2022 suggests that the reduction in hours cannot be explained by pandemic-related factors such as illness, fear of infection, or childcare needs during school closures,” the authors write.
There is also room for additional decreases. According to the OECD, the average American will work an average of 1,791 hours in 2021. However, this is significantly higher than in Canada (1,685), Japan (1,607), Great Britain (1,497), France (1,490) or Germany (1,349).
Shin says working less may not be a bad outcome, especially if it can lead to better work-life balance and less burnout — maybe even longer cumulative tenure. “Obviously, the job market remains tight and employers may have a harder time hiring workers,” says Shin. But one bright spot might actually be that it will ultimately result in a physically and mentally healthier workforce that can work longer hours.
At least Shin predicts the decline is staying power. “We don’t know the future, but it looks like this is something that’s actually here to stay,” says Shin. “Once you get that habit [of working less]I think it will just stick.”
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