“Work less, work Economic!” (because “marginal product of labor” sounded too boring)

Have you ever wondered why your shifts look like they’re never going to end? Why your boss wants you to stay for a full 8 hours (or more!) when you can barely remember your name by 1pm? Good news is we can fix this problem. Bad news is… well, your boss probably won’t like it and will surely think this is crazy.

In microeconomics, there is a concept called “marginal product of labor”, mostly thanks to people like Léon Walras or Alfred Marshall. Actually, there is a “marginal” for almost everything, but today we’re taking a look at this term only. Marginal product of labor can be defined as “the change in output (that we usually call Y) when we change labor (L) by one unit”. Now this can be applied two ways: we can change the number of workers… or we can change the amount of time each employee works (if there are any employers here, please pay those extra hours and pay them well. Thank you!). If we compare our values for product and labor before and after making the changes, what we get is the marginal product of labor.

Average-and-Marginal-Product-3-56a27da35f9b58b7d0cb42d3.png
The formula for marginal product.

The process is quite simple: when we add one worker to our office/factory/etc., the total outcome (Y) will increase, but how much? Now comes the fun part: that increase in the outcome will be smaller as we keep adding workers. Imagine a factory with one worker. There is room for another one, right? No problem! But what happens when there are already… 500 workers? Will the 501st actually help when our workspace is crowded with people and all our computers are in use? Not at all! Chances are, this worker will be detrimental for our outcome rather than helpful. Congratulations! You now know why most companies don’t want to hire you! (just kidding). This is called “Law of diminishing marginal productivity”.
Let’s read that last paragraph again and replace every “worker” with “extra hour”. See where I’m heading? Every hour you spend working will make you more productive… but only up to a point. Here is a very simple example I just came up with to illustrate:

prodhrs
Nothing too fancy, I know. TProd=Total Product; MProd=Marginal Product

This is what a regular workday looks like. I hope no one reading this has to work for 12 hours a day, but I’m sure you can relate to this fictional chart. The first few hours don’t feel exactly great, but the mind is still fresh and we can get a lot of work done. However, as the shift keeps going, our brains start to get tired from all the information we receive and all the work we’ve dealt with, causing us to be less productive towards the end of the shift. When we’ve been at the office (or peeling potatoes at Emilie’s Ranch) for more than 8 or 9 hours, we become practically useless, like zombies begging for some fresh air and, while we don’t actually undo our job, we don’t do virtually anything but still get paid for those hours. That right there is our negative marginal product. We’re being paid more than the work we’re doing! Of course, this doesn’t seem like the end of the world if we’re working for somebody else, but what if we’re self-employed? We are wasting our precious time AND we’re doing our brand no good. More hours != More work! There are lots and lots of research papers proving this negative correlation phenomenon but, unfortunately for us, they are quite expensive and I cannot share them without permission (I will leave the links for them below in case you want to know more).

So, what should we do to be more productive? The answer is easy: work less, work harder. Just because a shift is 6 hours instead of 8 does not necessarily mean we are going to do less work. In fact, we can do the same amount of work and have more time for ourselves, which can ultimately lead to more health, happiness and… you got it right, more productivity! The Economic Man does not work for 8 hours a day without a purpose and with no energy; what The Economic Man does is putting all his focus in the tasks in front of him to do the work in time and with no mistakes. Sure there are lots of jobs that require time and can’t be dealt with in 10 minutes, but we’re here to make every second count. It’s time to get to work and prove everyone you can do it!

Some research papers dealing with this subject:

    • Folkard, S. and Tucker, P: Shift work, safety and productivity (2003): https://academic.oup.com/occmed/article/53/2/95/1519789 (Free)
    • Awad S. Hanna, Ph.D., Chul-Ki Chang, Ph.D.; Kenneth T. Sullivan, Ph.D.; and Jeffery A. Lackney, Ph.D.: Impact of Shift Work on Labor Productivity for Labor Intensive Contractor (2008): https://ascelibrary.org/doi/abs/10.1061/(ASCE)0733-9364(2008)134:3(197) (Paid)
  • Keller, S., Berryman, P. et al: Effects of Extended Work Shifts and Shift Work on Patient Safety, Productivity, and Employee Health (2009): http://journals.sagepub.com/doi/abs/10.1177/216507990905701204 (Paid)

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