All Work and No Play? A Comment on Prasch's "Reassessing the Labor Supply Curve". (Notes and Communications)
Spencer, David A., Journal of Economic Issues
In a recent paper in this journal, Robert E. Prasch (2000) offered a timely commentary on the problematical status of the standard labor supply curve. His key argument was that the marginal utility of leisure time is negative at low levels of income. For low-income workers, leisure time will prove a source of deep malaise and this will compel them to prolong their hours of paid work even though the returns from working time may be low. In this case, contra orthodox theory, poorer workers will not seek more leisure time as wages fall. Indeed, by working longer hours, Prasch argued, these workers can achieve the income they require to "enjoy leisure." This focus on high income as the solution to the problem of leisure is challenged below.
The following comment is divided into two sections. The first deals with the relationship between income and leisure. Higher income, it is argued, need not raise the utility of leisure time if workers are affected adversely through working longer work hours. The second section re-examines the distinction between work and leisure. The important point is not whether workers like or dislike leisure time but that their collective freedom under capitalism is limited to non-work time. In a negative sense, therefore, leisure time represents the subordinate position of workers vis-a-vis work. In this light, it is insufficient to focus merely on low income; the status of leisure itself needs to be confronted especially as it "opposes" work.
Income and Leisure
The opportunity cost of working time has traditionally occupied a central place in the economics of labor supply. Workers gain utility from leisure time and thus will forgo working time unless financially compensated. High (low) wages induce workers to spend less (more) of their time "enjoying leisure." Prasch rightly criticized this approach. Most workers rely upon paid employment for their livelihoods and thus will be forced to continue working even if paid low wages. In short, workers do not choose to be unemployed. As Prasch put it, "a destitute worker, who spends his or her 'leisure' looking for work, negotiating with the bureaucracy of an increasingly intrusive and judgmental welfare state, or listening to her [sic] children plead for food, may perceive additional 'leisure' hours to be both long and painful" (2000, 685). The rich, by contrast, have the advantage of being able to pay others to undertake "personal work" such as washing and cleaning that otherwise make leisure time less rewarding.
Neoclassical economists have conceptualized leisure in a rather undifferentiated way. Leisure represents the time workers spend not working for wages (Prasch 2000, 683). On this basis, it is presumed that leisure time is a "good" (i.e., yields positive marginal utility). It is also assumed that more leisure is always preferred to less leisure, no matter how much leisure time is involved. Prasch's response was to argue that leisure time may be experienced as unpleasant (e.g., "personal work," finding a job if unemployed, surviving on low income). In this case, the labor supply schedule will be "forward-bending" at lower wage levels. That is, workers will be willing to supply more labor (i.e., work longer hours) even though the monetary rewards of working hours are low because this offers them a route out of destitution.
Prasch did not suggest that workers desire any fewer hours of leisure time. Instead he merely argued that workers will strive for greater income to make their available leisure time more pleasurable. He did not alter orthodox reasoning in this respect. But for negative marginal utility at low-income levels, workers would be content to maximize their leisure time. Prasch was completely silent, however, on the benefits of leisure time. Certainly, it is not work as such (including work effort) that leads workers to acquire "tastes" for leisure since the only aspect of work considered is the wage. …