The case for keeping Sunday shopping hours short (and it has nothing to do with religion)
August 5, 2009 Leave a comment
Being among the dwindling number of people under the age of 40 with daily home newspaper delivery, I usually end up skimming through the Winnipeg Free Press’s Letters to the Editor section due to a combination of haste and the fact that few letters grab my attention.
This morning, however, a letter from Andrew Jones of Winnipeg was one of the few that caught my attention.
Jones wrote to the Free Press to take issue with Manitoba’s limited Sunday shopping hours.
“Over the past four years that I have spent in this province I have noticed something that I found very odd — the weekend shopping laws,” Jones wrote, going on to conclude that limited Sunday shopping hours “means that our economy does not reach peak efficiency”.
But how does one measure economic efficiency? There are at least two basic measures. These are:
- GDP per capita (the size of the economy divided by the population), and;
- Productivity (the size of the economy divided by the total number of hours worked)
There is good reason to believe that extending Sunday shopping hours would actually reduce productivity, one of those two basic indicators of economic efficiency I noted above.
This is based on the fact that there is a strong, negative correlation between productivity and hours of work. Simply, this means that they usually move in opposite directions — higher productivity goes along with shorter working hours, and longer working hours tend to lead to lower productivity.
This was first explained many years ago by Parkinson’s Law, which concluded that “work expands so as to fill the time available for its completion.” Expand working hours, the theory suggests, and much of the extra time will be spent going through the existing workload, but at a slower pace.
The effects of Parkinson’s Law can also be seen in the OECD’s latest labour productivity statistics. For example, the average Dutch worker spends 19 percent less time on the job than the average Canadian worker, but produces 28 percent more value per hour worked than the average Canadian worker.
At the opposite extreme are South Korean workers, who on average spend 31 percent more time on the job than their Canadian counterparts, but produce 42 percent less value per hour worked.
Across the OECD, every extra hour worked per year cut the average value of each of those hours by 5.54 U.S. cents. Sixty to seventy percent of the difference in productivity between countries was attributable to differences in hours worked, regardless of whether you looked at a wider range of countries, or just the OECD’s most highly developed members.
What this all says is that expanding Sunday shopping hours could mean reducing the overall productivity of Manitoba workers by adding to working hours without a corresponding increase in economic activity. People would spend more time on the job, but do the same amount of productive work over the space of eight hours as they currently do in five or six hours — which means lower productivity.
This has important implications for that other measure of productivity — GDP per capita. Every $1 (U.S.) increase in hourly productivity translates into a difference of between $711 and $956 in GDP per capita. But if the value of each hour worked goes down, the waste tends to drag down GDP per capita as well.
Expanded Sunday shopping hours could also be more directly detrimental to retailers, whose workforces are usually paid by the hour, by increasing labour costs as a percentage of sales — with the effect being the hardest on those retailers pressured to open earlier on Sundays and operate at lower productivity (or even at a loss) to preserve market share.
If the current provincial government — or a future one — is serious about improving productivity in Manitoba, it would be well advised to ask for evidence that expanded retail hours would generate real economic growth, and not just provide another example of Parkinson’s Law at work.