Thus, for most of the century increasing productivity was at least to some degree turned into increasing real hourly wages. For the present inquiry, the question then arises of the extent to which increases in hourly wages were used to reduce work time as opposed to increasing real income.
- Work Time
An increase in hourly wages, at least in theory, ofers wage earners a choice between either increasing their income for the same number of hours of work, or reducing hours for the same income. It is quite possible that increases in the average household income have a ratcheting efect on the normative standard of living, with the result that wage earners become very resistant to subsequent falls in income. However, it is not clear just why an increase in hourly wages should be used to increase household income rather than to reduce time at work at constant income. There are good reasons, discussed in the previous chapter, for thinking that as income rises, the relative value placed on free time should also increase. It follows from this that at income levels above those required for basic subsistence, an increasing proportion of marginal increases in hourly wages should be used to reduce the amount of time spent at work.
In line with this expectation, work hours did indeed fall as wages increased over the course of the twentieth century. Robert Fogel notes that work hours in the United States decreased by 50 percent between 1880 and 1995 (Fogel 2000). Hours for nonfarm workers dropped from 60 per week in 1900 to
Empirical Pattern in the United States
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