People should be allowed to make up their own minds
Many people in the ready-made garment industry work more than the number of hours the government -- and others -- think they ought to. Which poses us an interesting question. Who should decide how many hours people should work?
Our answer is obviously going to be different if people are being driven into work through no choice of their own, or if they are freely choosing how to spend their lives.
Section 201 of the Bangladesh Labour Law, according to Dhaka Tribune, says that the working week should not exceed 48 hours, in exceptional circumstances 60 hours. Yet we have 62% of workers in the RMG sector working 12 and more hours a day.
One of these two sets of numbers is wrong in a moral sense. Either the law limiting the hours is wrong or it is being massively flouted, wrongly. The answer is the first -- it is the law which is wrong here.
The underlying point here is that we want the system, whatever system it is that we use, to maximize the well-being of the people. To an economist, this well-being is “utility,” that mix of whatever it is that makes a human happy.
Note that it is not just all about money or possessions, it’s that mixture of family, possessions, ability to do things, work, and leisure, that make someone as happy as they can be within the constraints the universe places upon them. And it very definitely includes that mixture of work and leisure.
The other essential point about utility is that it is personally defined. Some of us prefer more time with our children, others escape to work to avoid them. Thus our aim is to leave as much space as possible for each individual to reach that balance of everything which makes them, themselves, as happy as they can be.
This does mean that centrally defined rules about who may do what are going to violate our first principle, which is that all should have the liberty to pursue what they see as their own interests.
So, those workers in the RMG sector are voluntarily choosing these working hours. Given that their own individual calculation is that, this is what they want to do, we should simply allow them to get on with it.
As to the deeper economic calculation here, the answer is simply that those workers are poorer than the average human being, therefore they work more.
Leisure has a value, it most certainly does. So does the income gained from working. And a most basic concept is that we’ll all attempt to optimize among the varied choices we have. This might seem a little odd, and it definitely can look strange when in the textbooks. But think of the value of sitting and playing with the children. We’re not saying this does have a monetary value, but we do give it one.
The conversion into money units is only so that we can do sums with it. So, that value of being the paterfamilias -- say it’s Tk10 an hour. Just to use some sort of number as an example.
If someone offers us Tk15 to go off and work, then we’ll go to work. We gain more value from working than we do from the children time. If work only offers Tk5, then we’ll continue to play -- we are gaining more value by not working.
All we need to add now is that concept of marginal utility. Each extra unit of something has less additional value to us. Our 11th apple is worth less to us than our first, that’s not a complex concept.
Just those two tells us that poorer people will work longer hours. Simply because they are poor. The extra money to be gained is worth more than that value of their leisure time.
We do actually see this in the international statistics. As places and people become richer, those hours of work decline. In the UK, the average working week is now down to around 34 hours. As people become richer, they take some of that extra wealth in the form of more leisure.
This is true everywhere anyone has ever looked -- richer societies have shorter average working hours. Not because of legislation, not because of societal insistence, but just because that’s what people do.
We can even go further and note that average working hours back when Britain or the US were at the same level of income as Bangladesh today were about the same as the working hours in Bangladesh today. That is, this is just the way us human beings work.
It also means that it’s a self-solving problem. Bangladesh is growing at 7% and 8% a year. This is faster than the UK or US ever did. That economic development is being crammed into many fewer years than it took those other places. We’re going to see exactly the same effects as well. As the place and people become richer, working hours will decline. Simply because people will take more of their now higher incomes in the form of that leisure.
Again, this is something we’ve seen everywhere as the process moves along. Richer people, richer places, work shorter hours simply because leisure is valuable.
Thus our answer above, that it’s the legal part which is wrong. There’s no point in our trying to impose these shorter working hours upon people. People can and do ignore the law when they think it against their own interests.
Which is what people forced to work shorter hours than their level of income tells them they want to will indeed do. They’ll work the hours they think worth it and why shouldn’t they? More importantly, why shouldn’t we allow them to do so?
After all, it is the central liberal contention about the world that other people know better how to live their lives than we know how to live their lives. So, let them make up their own minds and do as they see fit.
Tim Worstall is a Senior Fellow at the Adam Smith Institute in London.