Leisure vs. Consumption and the Jetsons
By Taylor Marvin
Via Annie Lowrey, the Jetson family worked a total of 9 hours a week. Matt Yglesias has an interesting take on this. The Jetson’s dramatic increase in leisure time over modern Americans is presumably due to technologically driven worker productivity gains, allowing a future family to enjoy roughly the same consumption levels as today for much less actual labor. To Yglesias, this suggests an interesting tradeoff. The Jetsons have a choice between maximizing their leisure time by working less in exchange for decreased consumption, or working a normal 40 hour week and enjoying unimaginably more wealth than modern Americans.
This choice has a lot of similarities to the today’s debate over the future of Social Security. Since the 1900s, US worker productivity has increased rapidly, averaging 2.1 percent per year in non-farm business sectors since 1947, and increase in excess of population growth:
Unlike the Jetsons, American society has used this increase in productivity, and by extension income, to finance huge consumption increases. These consumption gains have been augmented by the increase in debt financing, which became much more widespread in American society after WWII. For the most part, this choice hasn’t been controversial: few Americans would want to trade increased leisure time for drastically lowered standards of living, even if the choice is technically possible. However, the current debate over raising the retirement age reflects this core tradeoff. Sometime in the next 40 years Social Security will require additional funding to remain solvent. This isn’t a serious policy challenge because Social Security solvency can be easily addressed by one of two potential changes — either the retirement age can be raised, lowering the cost of the program, or the federal government can devote more money to Social Security. This is the same basic tradeoff the Jetsons face. Americans can either use productivity gains to increase their leisure time by preserving or even lowering the current retirement age, or to finance increased consumption. On the federal level, this consumption is most evident in military spending and healthcare inefficiencies, the two largest portions of the budget aside from Social Security.
What’s interesting about this question is that, for all the alarm about rising life expectancies bankrupting Social Security, American’s real average life expectancy has risen only modestly in the last half century. Since the 1930s total life expectancy has risen considerably. However, since total life expectancy figure are heavily skewed by infant mortality this increase isn’t indicative of the percentage of the adult population that actually reached retirement age, or the age most adults could expect to die. Adult life expectancy — that is, the expected lifespan for those who had already reached adulthood — has increased only modestly since the creation of Social Security. In 1940 a 65 year old man could expect to live 12.7 more years, compared to 15.3 in 1990, a roughly 17 percent increase. Women’s adults life expectancies show higher gains: 14.7 to 19.6 in the same period. For comparison, average non-farm business productivity has risen roughly 350 percent in the same period. Consumption has risen by a similar amount.
So while American average consumption has risen drastically in the last half century, life expectancies and leisure time have not. American work more than most rich country citizens already, a trend raising the retirement age would increase:
Modern America has made the opposite choice as the Jetsons, favoring increased consumption over leisure gains. We’ll see if the eventual consensus on Social Security takes us towards or away from that imagined future.