The Opportunity Cost Of Time
May 2, 2017 In Economics International Economics
Time you enjoy wasting is not wasted time – Marthe Troly-Curtin
What is time? – An ongoing debate
What is time? Philosophers have debated this and many other questions like it for centuries, with no definitive answers to speak of. Was there time before the Big Bang? Does time exist when nothing is changing? Is the future infinite? Clearly, the answers to these questions are relative to the definition of time that is in vogue or currently accepted; hence, the various competing theories. My favorite things in life don’t cost any money.
The opportunity cost of time
Procrastination. That’s a word you’re probably sick of hearing. I sometimes find myself questioning what time is. I believe it is something constructed by humans. We all know that time is precious and valuable but what is your time actually worth? There are only so many seconds in a minute, minutes in an hour and hours in a day. And to find out how much your time is actually worth you have to use the basic principle of economics: opportunity cost.
Now let’s clarify one thing. If you already don’t know what opportunity cost is, it’s the benefit lost from the next best alternative foregone. Textbook definition. But what does this actually mean? In simple terms: I spend 45 minutes traveling to school every day, that time, however, could be used to have an extra hour in school or even better an extra hour in bed. Another scenario: imagine the government plans to spend £1 million on building a new school they could have used that money to build a new hospital. It’s simply what could’ve been.
How much is your time actually worth?
It’s not too hard to see how this applies in your life. How much is an hour of your time worth? Time is the most valuable commodity. We never seem to have enough of it. An economist might approach the problem from the starting point of a paradox that baffled Adam Smith in the 18th century: We cannot exist without water but can get by without diamonds–and yet we value diamonds so much more highly than water.
Yet in another sense, time is more like diamonds than water. While it seems infinite, it is actually scarce. Each individual has a finite allocation–without ever knowing what that allocation will turn out to be. As William S. Burroughs said: “No one owns life, but anyone who can pick up a frying pan owns death.” I guess time is precious and each individual has a limited amount of time. Hence the famous phrase ‘time is money’ time has a constant opportunity cost. That one hour you spent revising could have been used to read a book. Economics is fascinating.
How to use your time efficiently
So how do you exactly make the most of your time? After all, there are only 24 hours in a day. I like to use the 6/6/6/6 rule on days I’m super busy. It involves dividing your day into four parts of six. One of the six hours is used for sleeping. So that leaves you with three lots of six hours. Although on most days like holidays and weekends I prefer the 8/8/8 rule. One of the eight hours us used for sleeping so that leaves you with two lots of eight hours. That’s sixteen whole hours. How you choose to divide your day is your choice. Part of being an adult I guess is making choices and living with the consequences but it ultimately depends on how much work you need to get done.
Overworking = less productivity = bad for the economy
Employers. The spawn of all evil (sarcasm intended) Now how exactly could working fewer hours make us more productive and give us higher salaries which would benefit the economy. It has probably never entered the heads of most economists that hours could be shortened and output maintained.
Long working hours was a big cause of mental ill health, and a big 2015 study linked long working hours with an increased risk of stroke and heart disease. That creates an overburden on the NHS. Fewer hours spent working would mean more time to create the community spider web of connections and favors and reciprocation that keeps the world going round. When you have so much work to do, the solution most people think of is that you should work more hours.
The Economist showed that working more hours is actually inversely correlated with efficiency. This means the more hours you work, the less you accomplish. If you’ve studied economics, you might have heard of “diminishing marginal utility.” This is basically how it works: Imagine you work for 12 hours each day. Every hour that goes by your efficiency decreases because you get more and more tired. You may even go into negative marginal utility.
How is having a shorter working week good for our economy?
- A smaller carbon footprint: Countries with shorter hours have smaller ecological footprints. As a nation, the UK is currently consuming well beyond its share of the natural resource. This would leave time for living more sustainably.
- Better employees: Those who work less are more productive as discussed than those regularly pushing themselves beyond the 40 hours per week point. They are less likely to suffer the effects of sickness and absenteeism and make up a more stable and committed workforce.
- Lower unemployment: Average working hours may have skyrocketed, but they are not spread equally across the general population– some people find themselves working all hours of the day and night, others struggle to find work at all.
- A stronger economy: If handled properly, a move towards a shorter working week would improve social and economic equality, easing our dependence on debt-fuelled growth – key ingredients of a firm economy.
- Improved well-being: Giving everybody more time to spend as they choose would greatly reduce stress levels and improve overall well-being, as well as mental and physical health. Working less would help us all move away from the current path of living to work, working to earn and earning to consume.
- More time for families, friends, and neighbours. Spending less time in paid work would enable us to spend more time with and care for each other – our parents, children, friends and neighbours – and to value and strengthen all the relationships that make our lives worthwhile and help to build a stronger society.
- Making more of later life: A shorter and more flexible working week could make the transition from employment to retirement much smoother, spread over a longer period of time. People could reduce their hours gradually over a decade or more. Shifting suddenly from long hours to no hours of paid work can be traumatic, often causing illness and early death.
- More equality between men and women: Women currently spend more time than men doing unpaid work. Moving towards a shorter working week as the ‘norm’ would help change attitudes about gender roles, promote more equal shares of paid and unpaid work, and help revalue jobs traditionally associated with women’s work
- ]Higher quality, affordable childcare: The high demand for childcare stems partly from a culture of long working hours which has spiralled out of control. A shorter working week would help mothers and fathers better balance their time, reducing the costs of full-time childcare. As well as bringing down the cost of childcare, working fewer hours would give parents more time to spend with their children. This opportunity for more activities, experiences and two-way teaching and learning would have benefits for mothers and fathers, as well as their children.
- A stronger democracy: We’d all have more time to participate in local activities, to find out what’s going on around us, to engage in politics, locally and nationally, to ask questions and to campaign for change.
What do you think? Do you think you work more with less hours? Or the other way around.
I’m a writer. I’m also a 17 year old A level student. I am interesting in changing the world. I’m a raving Marxist who is a functionalist at heart. I am interested in law and the economy.
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