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Is There Public Support for Escaping Work-and-Spend?

Trading income for leisure time

Most surveys on tradeoffs between hours and income have asked about willingness to forgo current income for additional leisure time. In both the neoclassical and the work-and-spend approaches, one would not expect much inclination to reduce current income. In the former, the market reflects worker preferences. In the latter, preferences adjust to existing hours. This is the observational equivalence noted earlier. And surveys conform to this prediction: they show high levels of satisfaction with current income and little support for reducing current income. For example, the 1985 Current Population Survey found that only 8 per cent of US workers wanted to work less with less pay (Shank 1986).

A 1989 international survey which included US workers found only 5.6 per cent of workers wanted the 'work fess' option (Bell and Freeman, 1992, Table 3A). However, this survey has certain inconsistencies. In the same survey, 35 per cent said they would prefer to spend 'a bit' or have 'much less time at work', compared to only 16 per cent who would like to spend 'a bit' or have 'much more time' (Bell and Freeman, Table 6). There are also problems in the way the tradeoff question is typically posed:

1. It does not differentiate between involuntary underemployment and maximum hours constraints.
2. Some studies show that preferences are not linear with respect to the size of the hypothetical changes; however the questions do not specify the magnitude of the change (see Best 1980).
3. Hours tend to be inversely correlated with the intensity of work. Because the survey questions do not address intensity, they are (unwittingly) biased against shorter hours. Respondents may well be interpreting the 'work less' question as implying 'fewer hours, less pay, and harder work.

The 1977 Quality of Employment Survey in the United States found much more desire for reduced hours. For example, among dual-earner families with children under 12, 38 per cent of fathers and 53 per cent of mothers wanted shorter hours. The form of question was different, however, in its explicit mention of family time: 'Would you like to spend less time working so that you could spend more time with your (husband/wife) and (children), even if it meant less money?' (Moen and Dempster McClain 1987; 584). A 1991 survey also found very great willingness to sacrifice current income. When asked about the desirability of taking one extra day off each week, at the cost of that day's pay, 70 per cent of respondents earning $30,000 a year or more said they would like that option, as did 48 per cent of those earning $20,000 or less. The desire for more free time showed up in all segments of the workforce, irrespective of marital status, location or educational attainment (Gunsch 1991). This change in attitudes, if it is truly indicative of a durable shift, may be explained by the fact of rising working hours and the changing gender division of labour. In the US, dual-earner and single-parent families especially are finding themselves caught between the demands of work and family, with inadequate time for either (see Hochschild 1989 and Burden and Googins 1987).

Neoclassical and work and spend approaches are not necessarily observationally equivalent with respect to future preferences. A work and spend model would predict much more willingness to trade off future income (de, potential pay rises) for time than current income. However, work and spend would suggest that workers will not actually get the opportunity to make such a trade, and in the next period, hours will not have fallen. By contrast, neoclassical theory has no a priori prediction about workers' preferences regarding future income, although it does contend that if workers do want to trade future income for reduced hours at time t, then at time t+1 they should have shorter hours.

As predicted by the work and spend approach, the survey data show markedly different attitudes toward current and future income. For example, in a 1978 US survey in which few workers wanted to trade current income, 84.4 per cent said they would like to allocate at least some of a 10 per cent pay rise to more free time, with 47.3 per cent of those wanting to allocate all of the increase (Best 1980). A recent study of corporate lawyers in associate positions also found high willingness to trade future income for free time, especially if others were doing it (Landers, Rebitzer and Taylor, 1993).

European data is similar. In a 1977 survey, reducing worktime was more popular than higher incomes among West German, French and UK workers (Yankelovich 1985: 10). And a 1991 survey found that among German workers, shorter work time still holds a slight advantage over a pay increase, despite the large reductions in hours since 1977 (Bell and Freeman 1992, Table 5).

The 1978 US survey is interesting because the passage of time allows us to see whether or not preferences have been validated. They clearly have not been. While many workers have not received real pay increases (particularly male, hourly workers), salaried employees and women have experienced income gains. Yet neither group has seen their hours fall: on the contrary, hours have risen substantially since the survey was conducted, lending support to the work-and-spend rather than the neoclassical approach. Furthermore, the 1985 Current Population Study cited above which found only 8 per cent of workers wanting fewer hours also supports work-and-spend. Those who did not have their 1978 preferences for shorter hours validated apparently adjusted to their new levels of income and did not express dissatisfaction with their hours.

The work and spend approach relies on particular types of consumption behaviour. To date there has been very little empirical testing of alternative consumption theories, ie, those beyond life cycle and permanent income. Again, observational equivalence makes testing difficult. How are we to know if high dependence of present consumption on past consumption is due to habit formation or to the fact that the goods in question are merely satisfying fixed preferences? How can we tell whether correlations between income and the purchase of certain goods represents status consumption or ability-to-pay?

There is some survey data which is suggestive. In data reported by the Roper polling organization people have been asked at two different periods of time whether they consider various goods to be luxuries or necessities. The data support a habit formation approach. Only two categories (automobile and a tumble dryer) out of nine (washing machine, TV set, home air conditioning, car air conditioning, second automobile, dishwasher and second TV set) did not show a substantial increase in the fraction of people who considered them to be necessities between 1973 and 1992 (Roper 1993; 89). As habit formation theory would predict, newer goods are considered luxuries, even if they are widely owned (VCR, second phone, stereo, dishwasher).

Pollsters have also been asking, over a long period of time, about consumption expectations. Although the question does not directly address status consumption, a path of rising expectations over time is a necessary component of a dynamic Duesenberry-style model. The survey question is the following: 'In order to live in reasonable comfort around here, how much income per year do you think a family of four needs today?' Interestingly, people always think the necessary amount is more than the median family actually has, which is consistent with a 'keeping up with the Joneses' process. Furthermore, 'needs' track income quite closely (see Table 4.3).

Table 4.3 US median income and 'reasonable comfort'

Question: In order to live in reasonable comfort around here, how much income per year do you think a family of four needs today?

Source: 'Reasonable comfort' series from The American Enterprise Washington DC: American Enterprise Institute for Public Policy Research, May/June 1993, p 86. Median family income from the 1992 Economic Report of the President.

Recently the gap between the two has narrowed, perhaps indicating a reduction of aspirations on account of slower income growth. This data could be used to support an emulation story, which would predict that expectations track, but always exceed incomes.

The values context: the growth of 'post-materialism'

Since the Depression and the Second World War, populations in North America, Western Europe and Japan have grown progressively less concerned with material success. The research of Ronald Inglehart (1977, 1990) details these changes, using more than 200 national surveys on values. The surveys are designed to identify two basic value types -

Table 4.4 Distribution of materialist and post-materialist value types by age in Europe 1970-1986 (%)

Source: Ronald Inglehart, Culture Shift in Advanced Industrial Society Princeton University Press, Princeton, 1990. Combined results from European Community surveys, 1970-1986 Note: Percentages do not add up to 100 because mixed types are omitted.

'materialist' and 'post-materialist'. In each country, beginning with those born in the late nineteenth century, each successive cohort has become less materialist and more post-materialist. By the 1986-87 surveys, there were more post-materialists than materialists among the youngest (15-24 years) age group (see Table 4.4 and Figure 4.3)

Inglehart's hypothesis is that this values shift comes from the pre-adult economic experience. He argues that cohorts which grew up in difficult

Note: Dates refer to date of birth. Based on data from representative national samples of publics of France, Great Britain, West Germany, Italy, Belgium and The Netherlands, interviewed in European Community surveys of 1970 and 1973 and EuroBarometer surveys 6 through 29. Source: Ronald Inglehart, Culture Shift in Advanced Industrial Society Princeton University Press, Princeton, 1990.economic times and under conditions of economic deprivation are more materialist. Those cohorts who grew up in the prosperity of the postwar era are more post-materialist. Cross-sectionally a similar relation holds: people from families with higher occupational status and higher income are more likely to be post-materialist. Cohorts apparently do not become more materialist as they age. Rather, shifts in values come about largely through generational effects. The generational shift toward post materialism has had a major impact on the 'value composition' of the public. In the European Community the ratio of materialists to post materialists was 4 to 1 in 1970-1; by 1988 it was 4 to 3. In the United States, the comparable ratios were 3.5 in 1972 and 1.5 in 1987. Under conservative assumptions, Inglehart projects that in Europe by the year 2000 materialists and post-materialists will be almost equal in the population.

One issue raised by Inglehart's analysis is the impact of business cycles or longer term deterioration in economic performance on values. Inglehart does find that current economic conditions have an impact. For example, high inflation rates in the 1970s temporarily reduced the incidence of post materialism; similarly, current economic performance has retarded the shift toward post-materialism. For example, the cohort born in 1966-73 is (so far) not significantly more post-materialist than its successor. This is the first cohort for which this has been the case, going back to the cohort born in 1880-1905. What does the current period of slow growth imply, then, about the future path of attitudes toward materialism? It is probably too early to say. First, current conditions, although clearly less favourable than during the 'Golden Age', are not comparable to the early 20th century or the 1930s Depression. Second, there is considerable uncertainty about future economic conditions. Third, the uneven impact of stagnation across the population might suggest growing diversity in attitudes. I would say that while it is certainly possible that younger cohorts will be less 'post materialist' than the baby boom generation, it is by no means certain.

Figure 4.3Value priorities by age in Europe, 1970-1988

Finally, a caveat about public opinion data is in order. While attitudinal surveys are useful, they have certain limitations. First, the link between attitudes and behaviour is complex: respondents may be articulating what they would like to believe, rather than attitudes which inform their actual behaviour. Second, the wording and ordering of questions often affect outcomes. (However, Inglehart's results are quite robust.) Finally, indepth interviews often reveal different sentiments than those articulated in simpler surveys. Therefore it is always wise to use survey data in a larger evidentiary context.

AN EMERGING ANTI-CONSUMERIST MOVEMENT?

Have the findings of Inglehart and others on post-materialism actually been translated into behavior ? There is some evidence on this. Inglehart has found that post-materialists are in fact 'economic under-achievers'. They earn less than materialists, once occupation and education are controlled for. Post-materialists tend to have 2.5 times the educational level of materialists, and 3 times the occupational prestige, but only 1.25 times the income. In the United States, post-materialists were less likely to have high incomes than materialists - 21 per cent of post-materialists fall into the top income quartile, as compared to 31 per cent of materialists. Furthermore, these differences are showing up at the macroeconomic level. Nations with high levels of post-materialists tend to have lower levels of economic growth. The partial correlation coefficient for post materialist values and economic growth in a regression model is minus -0.52 (significant at the 0.02 level)

An extreme form of post-materialism, namely anti-consumerism, has begun to emerge at the margins of social life. In the United States it goes by the name of the 'voluntary simplicity' or 'frugality' movement. It is motivated by concern for the environment, a desire to be liberated from
oppressive and meaningless work, and a traditional frugal attitude to money. Growing unemployment and consumer debt, as well as the longer-term shift to 'post-materialism', have fuelled in this movement. Unlike the 'back to the land' movement of the 1960s, this one does not advocate dropping out of society. It argues that a careful relationship to money can create financial independence and freedom from the 'ret race' of modern society.

My own research on anti-consumerist trends is at an early stage. However, I have some findings to report. In a 1993 survey I conducted at a Boston-area shopping mall, 72 per cent of respondents indicated that they could live a more frugal life. Twenty-two per cent said this would make them 'better off', 47 per cent said they would be 'the same' and 31 per cent said they would be 'worse'. Combining the first two categories, then, 69 per cent of respondents did not anticipate that spending less money would make them worse off. Sixty-four per cent of respondents said that they 'always' or 'often' feel Americans have or buy too much, and 31 per cent always or often feel that they personally have or buy too much. A majority (56 per cent) of respondents said they can afford everything they really need.

I have also conducted interviews with white collar workers who have lost or left their jobs and are living on reduced incomes. Most of them have gone through value changes which made them unwilling to make the personal sacrifices that had been required to succeed in demanding careers. A common theme in the interviews has been the declining importance of money, as compared to personal fulfilment, meaningful work and reasonable schedules. 'I lost my job and I've never been happier' is one refrain. Many feel that they had 'sold' their lives to someone else while they were working, and have now gained control. They are pleased to be 'doing something important and worthwhile', after 'selling computers'. They note that 'after being laid off, I got a support group of friends.' Those interviewed expressed no regrets about their decisions or even the events that they had no control over.

There is also a group of people who are choosing a less dramatic reduction of consumption. These 'downshifters' have left successful and demanding careers in order to get more workplace control, time and meaningful work. Many remain in the same fields, but at lower salaries and conventional success levels. They also frequently move to smaller urban or small-town settings. Unfortunately there is very little quantitative evidence on this trend. A final and numerically far more important trend is the growth of anti-consumerist religious movements, particularly Christian evangelicals and 'New Age' spiritualists. These movements share a view that material goods are false gods and that simple lifestyles are the key to a satisfying life.

CONCLUSION

I do not intend to make too strong a case. While I believe there are significant trends moving northern countries away from current consumption patterns, the obstacles to stabilizing consumption are far greater. First, because the pattern of value shift is inter-generational, the pace of change is slow. The remaining 'stock' of strong materialist attitudes is a powerful social force.

Second, I have not talked at all about the relationship between public attitudes and the structure of social and economic power. Public opinion has only a limited impact on social, political and economic institutions. (For an excellent treatment of this issue, see Ferguson and Rogers 1986.) There are strong vested interests in continued economic growth. The ongoing integration of the world economy makes the 'economic imperative' for growth even more pressing. There is also the powerful obstacle of employer resistance to shorter hours. Only collective organization by workers and citizens can translate popular attitudes into social realities.

Third, the possibility of stagnation over the medium term means that there will be an upturn in materialist attitudes. The time series data show that temporary economic adversities lead to temporary changes in the degree of materialism. If stagnation continues over a longer period very different outcomes are possible. Aspirations may adjust, with the trajectory of falling materialism remaining unchanged. If coming years are experienced along the lines of the 1930s, new cohorts may grow up increasingly materialist.

In any case, the current mood is one of economic pessimism among all the industrialized countries. People are feeling powerless in the face of a globalizing market economy. This does not bode well for alternative economic visions. For a scenario of stable or declining consumption to be politically viable, proponents must have a credible answer to the challenge of international openness and competition. While the present moment gives us a real opportunity, capitalizing on it is a delicate and difficult task. For decades, the momentum in economic discourse has belonged to the right.

In the autumn of 1993, prompted by growing unemployment, the four day week has once again become a serious topic of discussion in Europe. The French have been debating it and Volkswagen has shifted to a four day week with pay reductions. In the United States a four-day workweek bill has been introduced in Congress. While it is too early to know what the outcome of these discussions will be, it seems that the discourse around working time is already shifting.

REFERENCES

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Burden, D and Googins, B (1987) 'Balancing Work and Homelife Study' Center on Work and Family, Boston University

Duesenberry, J (1949) Income, Saving and the Theory of Consumer Behavior Harvard, Cambridge

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Moen, P and Dempster-McClain, D (1987) 'Employed Parents: Role Strain, Work Time, and Preferences for Working Less' Journal of Marriage and the Family, vol 49, pp 579-90

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Schor, J (1992) The Overworked American: The Unexpected Decline of Leisure Basic Books, New York

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