Work as Disutility: Definition and Interpretations - Essay Example

Table of Contents Introduction …………………………………………………………………………………..2 Work as Disutility – Definition and Interpretations ………………………………………….3 The Economics of Money versus the Economics of Happiness………………………………4 Employment versus unemployment disutility………………………………………………...7 Beyond Paid Employment…………………………………………………………………….8 Conclusion…………………………………………………………………………………….8 References……………………………………………………………………………………10 Introduction How many people nowadays are coming to work with pleasure and excitement? How many people are really satisfied with their job or work activity as they manage to combine the process of money earning with pleasure? Taking into consideration lazy human nature, it is possible to suggest that the share of this category of people represents a minority while the majority of people perceive the work as one of the most common and appropriate instruments of supporting their lives and satisfying their basic needs. Unfortunately, many people do not get (or get but lose) the work of their dream and often are doomed to work in order to earn for living. Having no fun and internal satisfaction at work, people are counting working hours and even minutes for the end of the day, when they can live for pleasure (Budd 2011). Such a behavior has been discussed by many various economists and scholars of social sciences who have developed the concept of work disutility. However, there is also a significant share of individuals who perceive job not only as the source of income but also as an opportunity for social engagement and communication and in case they are not employed, they perceive unemployment as disutility (Chadi 2010). The purpose of this paper is to analyze the concept of work and disutility in respect to the relevant economic and social theories and also to provide a broader analysis of the concept of disutility in employment/work activity and beyond it. Work as Disutility – Definition and Interpretations Disutility has many various interpretations and definitions. One of the simplest one is formulated in the following way: “the degree to which a commodity or activity fails to satisfy human wants” (Dictionary.com 2009). Applying this definition to the working environment, it is possible to withdraw the following explanation of the work disutility – the degree to which work fails to satisfy human wants. The idea of work as disutility has found its further development and conceptualization in the neoclassic economic theory. The mainstream economic thought in relation to labor is dominated by the idea that work is a means to an end (Spencer 2009). Thus, for example, neoclassical economic theory views work as a “way of supporting what is assumed to be each individual’s fundamental objective – the consumption of goods, services, and leisure in a way that maximizes one’s personal utility” (Budd 2011). Based on this approach, work is viewed as something negative but impossible or difficult to avoid in order in order to survive. Work as an unloved necessity has been viewed not only through the epoch of neoclassical thought but actually throughout all other major epochs, including classical and mercantilist (Spenced 2009). Austrian economists positioned labor at the means to utility and final consumption – the end utility (Spenser 2004; Lopes 2011). Therefore, the pleasure of end consumption forms the utility or the value. The theory of classifying work as disutility is through perception that the nature of work is painful, tiresome, and brings less pleasure than leisure (Budd 2011). Initiator of another idea, William Stanley Jevons, suggested that the cost of labor is the “pain cost”, whereas labor is viewed as “painful exertion” (cited by Spenser 2004). However, on the same time, Jevons explains that labor can be not just painful, but also pleasurable. The longer the worker performs his job, the higher is the pain with every hour added, and the greater is marginal disutility. But in case the worker does his job randomly or few hours per day or week, this work can be pleasurable (Spenser 2004). Such cases are known to be “marginal disutility of labor”, when the last or added extra unit of work brings less pleasure to the individual (Budd 2011) and thus causes disutility (Ratzel 2009). In contrast to Jevons, the contemporary economic theorists do not view the disutility of work as a painful exertion of work, but rather view it as the reduction of leisure time (Budd 2011). Based on this assumption work provides an individual with the income that increases his/her utility; but also the work is reducing an individual’s utility, as it is conflicting with leisure. Thus, neoclassical theory offers a consumption-leisure trade-off where the individual has limited time resource (Ratzel 2009). Work and leisure are two conflicting issue here, whereas work is a disutility, and leisure is pleasurable and provides utility (Budd 2011). However, Jevons believes that work becomes a disutility when it is irksome by itself, not because of the opportunity cost of leisure (Spenser 2004). Moreover, Jevons reviews the perception of “work as pain” as a barometer of employee’s job satisfaction. This approach provides a new vision that the utility of leisure time is a consequence rather than the cause of the disutility of labor (Spenser 2004, 391). The economics of Money versus the Economics of Happiness Standard microeconomic theories and models of labor supply view work as a source or cause of disutility and an instrument for earning money (Lopes 2011). However, there the shift from the income incentive towards the direct impact of work on human well-being has occurred with the emergence of the “the economics of happiness” in 1990s (Spencer 2009). More and more studies are carried out aimed at analyzing measure of work disutility and some researchers use a natural economic measure of disutility to summarize the number of factors which make job pleasant or unpleasant; this measure is known as the marginal rate of substitution (Dunn 1986). Dunn (1986) has tried to analyze the relationship between wages in large and small firms and work disutility through the use of marginal rate of substitution of wage income for leisure. While the meaning of disutility of work is still often viewed as the lost opportunity for leisure time, it is also viewed as opportunity for earning money that can be further used for individual’s needs satisfaction. However, in addition to the approach that satisfaction comes from the amount of money earned, other working conditions and work-related aspects should also be taken into consideration as the characteristics that impact on the individuals’ disutility at work (Budd 2011). There is evidence that people often tend to seek in work something other than income and Lopes (2011) suggests that the relational dimension of work, opportunity of self-realization and personal development play an important role for many individuals. Moreover, a decision of whether to go to work or not and behavior at work are interrelated with the search of social interactions and other relational and moral goods (Lopes 2011). People, being social beings have physiological need of interaction with other individuals. Thus, in addition to the level of income, it is possible to state that the source of job satisfaction is often coming from good relationships and communication with colleagues (Lopes 2011). Based on this statement, the following logical conclusion can be drawn - if these relationships are not as good or cause discomfort for the person, work can also be viewed as disutility. Other characteristics that might influence everyone’s utility can differ significantly because of the different individuals’ needs and requirements, and therefore can vary from the benefits/rewards in total compensation and the risk of physical injury to the work schedule and the amount of time required for travelling to the work (Budd 2011). In terms of the working time as a potential disutility Ratzel (2009) has analyzed the correlation between life satisfaction and the time individual would prefer to work and the actual time he or she works. Based on the results of his study, working hours up to 7 hours a day tend to increase individual’s satisfaction while adding additional hours might lead to increased disutility (Ratzel 2009). Another question which is logically appropriate here is whether money earned contributes to the individual’s happiness? Many study results indicate that income does not buy much happiness, comparing to achievement of life goals, self-esteem, social contributions, and other self-referential characteristics as well as family happiness do (Lane 1992). However, work as an activity is often used as an instrument for achieving the above listed priorities. In relation to this idea there have been developed three major incentives based on: economic, psychological and sociological scholarship (Budd 2011). Thus, for example, economic scholarship focused on work as a disutility tolerated for earning money; psychological scholarship – focused on work as an tool for achieving personal fulfillment; and the sociological scholarship – focused on the role of social relations in motivating workers to work (Budd 2011). However, whatever the economists’ state, the ability of getting a pleasure from the work is not limited to these assumptions and work still can be enjoyable and pleasurable. Most probable that the number of those people is much lower than those, whose the only incentive to work is earning money. Employment versus Unemployment Disutility While there has been in details discussed the issue of work and the other incentives for work, there has been nothing yet mentioned about unemployment and disutility of unemployment. It is not clear yet, who is happier: an individual who works or an individual who doesn’t. Based on the neoclassical economic theory, an individual who’s the only goal is earning money for consumption and/or survival, his work is viewed as disutility because of leisure opportunities. However, Ratzel (2009, 2) states that the results of many empirical happiness studies show only the total life satisfaction effect of labor, and that the aggregate effect of work is positive. There are also many discussions and studies devoted to the aspect of voluntarism in the unemployment – whether it has predominantly voluntary or involuntary nature (Worswick 1976 cited by Chadi 2012). While the situations on the employment market vary broadly from country to country, in many labor market models unemployment is a viewed as a voluntary choice (Chadi 2012, 2). While in voluntary employment everything is clear and obviously an individual finds work as disutility, and therefore makes conscious choice to leisure and have such an opportunity, the issue of unemployment disutility requires deeper analysis. If the person involuntary is unemployed because of various reasons, this might be the phenomenon of unemployment-induced disutility (Chadi 2012). Chadi (2010) has carried out a research aiming to examine the relationship between the willingness to work and unemployment disutility. Based on the study results it has been concluded that unemployment-induced disutility was consequently very strong (Chadi 328). This approach provides an insight that both work/employment and unemployment can be a disutility. Beyond Paid Employment An idea that unemployment also may be viewed as disutility it may be interesting to review the conceptualization of disutility applied to the activities that are not paid and defined formally in the job description. Good example here would be housewives who are responsible for cleaning, taking care of children, cooking, etc. This type of work can be viewed as formal job – both are conceptualized as disutility (Budd 2011). Some other examples of disutility beyond employment would include sharecropping or agricultural households (Budd 2011). Another interesting aspect of work and disutility relates to the issue of the government and social programs for those who are not employed. Corneo (2012) suggests that if the person doesn’t work (excluding the cases of physical/psychological disabilities), this should also generate a disutility, because of feelings of guilt. Conclusion The paper analyzed analyzes the concept of work and disutility in respect to the relevant economic and social theories. The mainstream economic thought in relation to the work views as an unloved necessity and as the painful means to utility and final consumption. However, further analysis revealed that on the same time labor can be not just painful, but also pleasurable. The level of pain or pleasure depends on the number of hours worked. Economist tend to name this phenomenon the “marginal disutility of labor”, implying that the last or added extra unit of work brings less pleasure to the individual. Another theorists view the disutility as the reduction of leisure time whereas the work is reducing an individual’s utility, as it is conflicting with leisure. Work and leisure are two conflicting issue that continue to raise further discussions. Despite the standard microeconomic theories and models of labor supply is observed a shift from the income incentive towards the direct impact of work on human well-being. The so called “the economics of happiness” theory suggests that job can transform disutility to utility by satisfying the individual’s needs such as: opportunity for self-realization and personal development, social interactions and other relational and moral goods. Work as disutility has many different insights and interpretations, however, the issue of unemployment as disutility has also some important relevance to the question researched. Moreover, the research of the issue “work as disutility” expands even further- beyond paid employment and suggests that conceptualization of disutility can be applied to the activities that are not related to official or formal work but still constitute the type of work performed by an individual. References Budd. J.(2011). The Thought of Work. Montreal: Cornell University Press, pp. 78-86. Chadi, A. (2010). How to Distinguish Voluntary from Involuntary Unemployment: On the Relationship between the Willingness to Work and Unemployment-Induced Unhappiness. Kyklos, 63(3), 317-329. Corneo, G. (2012). Work Norms and the Welfare State. Cesifo Economic Studies, 58(4), 599-625. Dictionary.com,. (2009). the definition of disutility. Retrieved 30 May 2014, from http://dictionary.reference.com/browse/disutility Dunn, L. F. (1986). Work disutility and compensating differentials: estimation of factors in the link between wages and firm size. Review Of Economics & Statistics, 68(1), 67. Lane R. (1992). Work as `disutility and money as `happiness: Cultural origins of a basic market error., Journal of Socio-Economics, Spring, Vol. 21, Issue 1 Lopes, H. (2011). Why Do People Work? Individual Wants versus Common Goods. Journal Of Economic Issues, 45(1), 57-73. Ratzel (2009). Revisiting the neoclassical theory of labour supply. Spencer, D. A. (2004). From Pain Cost to Opportunity Cost: The Eclipse of the Quality of Work as a Factor in Economic Theory. History Of Political Economy, 36(2), 387-400. Spencer, D. A. (2009). The work as bad thesis in economics: origins, evolution, and challenges. Labor History, 50(1), 39-57. doi:10.1080/00236560802615236 Read More