Marketplace of Ideas
What economics-related stories are grabbing headlines this week? Check these out:
- The big headline from the Bureau of Labor Statistics’ American Time Use Survey this week is that Americans are sleeping more and working less. On average, we slept 8 hours and 44 minutes per day last year and worked just 3 hours and 28 minutes per day. Of course, as the Wall Street Journal points out, those average numbers are impacted by still-high levels of unemployment and the aging of the population. Labor economist Donald Grimes explains, “Essentially, the share of the population who works zero hours per day is growing faster than the employed.” The survey also shows that women tend to do slightly fewer hours of paid work than men, but they are still doing most of the housework, and they spend more time on childcare than men. Meanwhile, men spend more time than women on leisure activities. Of course, as the New York Times points out, Americans tend to let work permeate their lives: “Leisure may not feel like much fun if you spend it anticipating the next email.”
- Has the U.S. economy hit the end of the road for growth-boosting innovation? In a Wall Street Journal article this week, Professor Robert Gordon of Northwestern University argues that the outlook is bleak. Gordon is an influential economist, whose recent research showing that short-term unemployment has a bigger impact on inflation than long-term unemployment has turned heads at the Fed. Gordon says economies need technological breakthroughs to advance, but the biggest gains are behind us. Taking the other side of the debate is Gordon’s colleague at Northwestern, professor Joel Mokyr. He says the twenty-first century economy will benefit from rapid innovation in the fields of robotics, 3-D printing, and cloud computing. Two decades of IT advances have failed to boost the U.S. economy’s potential growth rate, but could unanticipated innovations in other fields have an impact? Mokyr says simply looking at output-based measures of the economy such as GDP miss important improvements in the standard of living. “Maybe the problem is that we didn’t measure growth in the past correctly,” says Mokyr. Only time will tell which economists’ crystal ball is most accurate.
- Not every corporation considers maximizing shareholder profits to be its primary purpose. New Hampshire this week passed legislation recognizing benefit corporations, which focus on a triple bottom line: profits, people, and planet. Currently 24 states have benefit corporation laws and another dozen states are in the process of passing them. Entrepreneurs with socially minded goals can also seek certification with the firm B-Lab, which scores companies on their success at carrying out certain core values. So why are laws necessary for companies that want to provide a “tangible benefit to society, and the environment”? According to NPR, the laws provide protection from shareholder lawsuits against corporations that prioritize nonfinancial goals along with profits. The New York Times says certifying as a benefit corporation can also improve relations with stakeholders—such as employees, suppliers, customers, and community members. Colin Mayer, professor of management studies at the University of Oxford, argues in Firm Commitment that the interests of stakeholders should rank at least as high as shareholders—many are financially exposed to corporations through the commitments they make “in the same way as shareholders are to their financial investments.”