The Downside Of A Strong Economy: Sleep, Recreation and Family
Compared to where it was five years ago, our national economy is strong. With the unemployment rate trending down toward 5 percent, the GDP at approximately 17 trillion, the Dow Jones Industrial Average riding strong at around 16,000, and foreclosures in decline, America has a lot to be thankful for. These metrics paint a rosy picture; compared to the Great Recession of 2007-2009, people have more job security, financial security, and are less fearful about the future.
However, a strong economy has some downsides that we rarely think about. My colleagues (Alexandru Lefter, Devasheesh Bhave, and David Wagner) and I often study the topic of work-life conflict. We started with the idea that there may be some benefits to weak economies, and downsides to strong economies, with regard to non-employment outcomes, and made some interesting discoveries.
Before going into our findings, first it is important to consider how people spend their time. Time is a scarce resource. People have multiple demands on their time, and time spent in one domain comes at the expense of time spent in other domains. David Wagner and I have previous research in which we show this trade off, and how time spent working comes at the expense of time spent on family demands and time spent sleeping. In other words, for each additional hour spent working, employees get less sleep and spend less time with their families. This is the bane of many employees, especially those with families. An extra hour or two of work in the evening may come at the expense of attending a child’s soccer game. Answering emails at 1 a.m. will often mean less sleep that night.
The next logical step, which we pursued in this study, was to examine the effect of macroeconomic forces on how people spend their time. If spending more time working means less time available for sleep and family, what happens when the economy goes through booms and busts? Rather than focusing on those who lose their jobs (for whom the effects would be fairly obvious), we focused instead on people who keep full time employment through these economic cycles.
Our expectation was that when the economy is strong, the demand for products and services goes up, which means that people will have to put in more work hours to create those products and services. One way, of course, to meet an increase in demand is to hire more people. This clearly happens. However, companies are often a bit reluctant to hire more people, either because they are afraid that demand will sink back down or because of the long-term costs of hiring someone. Thus, many organizations will soak up much of this demand by asking their current employees to work longer hours.
On the other side of these economic cycles, we expected the opposite. When the economy is weak, the demand for products and services goes down, which means that less labor will be required to produce what is needed. Again, one way to cut labor is to conduct layoffs. However, companies are often reluctant to use layoffs as the only strategy to lower their production. This is because layoffs lead to a loss of human capital and are very costly in terms of human suffering. Thus, many organizations will ask employees to work fewer hours as a means to lower production.
We expected that this would have downstream effects for the non-work lives of employees, and that time scarcity would be the reason. Specifically, we predicted that when the economy is weak, employees will work fewer hours, and as a result will spend more time with family, more time sleeping, and more time recreating. In contrast, when the economy is strong, employees will work more hours, and as a result will have less time for family, sleep, and recreation.
To test these predictions, we conducted an analysis of a Bureau of Labor Statistics dataset spanning an eight-year period (2003-2010) and including responses from 34,653 full-time working adults. Participants indicated how they spent their time over a 24-hour period across different domains of their lives: working, sleeping, engaging in family-related activities, and recreating. We examined the unemployment rate, a proxy for the strength of the economy, in each state and during each month of the time period under investigation.
Our analyses revealed that the stronger the economy, the more time employees spent working, and the less time they spent with family, sleeping, and recreating. To give a feel for the size of the effects, when the unemployment rate increases by 1 percent, employed individuals work, on average, approximately 14 minutes less per week. So the difference between an unemployment rate of 4 percent (an indicator of a very strong economy) and 9.6 percent (the highest annual national unemployment rate observed in our survey period) translates into a difference of approximately 78 minutes of work per week, on average. As one might expect, when employees work over an hour more per week, they have less time for family (16 minutes per week), less time for sleep (11 minutes per week), and less time for recreation (21 minutes per week). Keep in mind that these analyses focused ONLY on those who were employed, which is a more stringent way to test our model. Those who lose their jobs obviously have very different time allocations. To access more information on these analyses, keep an eye out for our forthcoming article in the Journal of Occupational Health Psychology.
So what does this mean? Obviously we should want a strong economy rather than a weak economy. But family, sleep, and recreation matter as well. Strong economies provide a lot of benefits, but they come at the cost of time spent on these other activities that are also important to our well-being and happiness. Sixteen minutes per week less with your family may not sound like a big deal, but it adds up over the course of a year. Eleven minutes of sleep may not seem a lot, until you get a nice power nap that recharges you. Twenty-one minutes of recreation may not appear important, but it may be enough to read a few chapters of an enjoyable book. These are the things we sacrifice when the economy is strong, and that information gets lost in the joy of financial security.
If the economy continues to strengthen, we recommend that people keep an eye on their non-work activities. These may need to be protected. Employees may need to negotiate time boundaries with their supervisors in order to minimize the degree to which an increase in the demand for products and services leads to erosions in non-work activities. Company leaders should consider these burdens on employees’ non-work time when deciding whether to hire more people or ask their current employees to work more. By doing so, they may reap long-term benefits from employee well-being and human sustainability.
Associate Professor of Management,
Foster School of Business, University of Washington