Nov. 4 (Bloomberg) -- In 1965, a U.S. Senate subcommittee predicted that as a result of increasing labor productivity from automation and “cybernation” -- in other words, the computer revolution -- Americans would be working only about 20 hours a week by the year 2000, while taking seven weeks or more of vacation a year.

But in 1991, the average American worker put in 163 more hours on the job than in 1973, according to the sociologist Juliet Schor, the author of “The Overworked American.” Since many more families had two parents working, the increase in annual working hours per family was much higher -- 500 to 700 hours more than in the ‘70s.

It should be noted that increases in labor productivity are not “energy-free” advances for the workers whose productivity increases. As it happens, workers are required to get much more done and more quickly. Working hours are more draining, while the hyper-competition of today’s workplace makes them even more stressful.

Increased productivity means that consumers perform a variety of pro-bono tasks that companies once had to pay to accomplish. We pump our own gas, make our own travel reservations and use automated checkout lines. Productivity is said to have increased because the companies don’t have to pay anyone to help us out anymore.

Eight-Hour Workday

Why have American working hours been so stable in the past half-century and even risen for many workers? For 100 years, from the Civil War onward, hours had been falling, thanks in no small part to workers’ demands. As long ago as May 1, 1886, half a million workers filled the streets of America’s major cities, demanding an eight-hour workday. During the Great Depression, businesses adopted 30-hour weeks. (Kellogg Co. was the most prominent company to try it, and its experiment was viewed by management and workers alike as a huge success.)

Until World War II, bread (higher wages) and roses (as in, shorter hours -- time to smell the roses!) were the twin demands of the labor movement. Yet after the war, interest in shorter work time waned, even as a buffer against unemployment. The postwar era, aided by the new medium of commercial television, ushered in what came to be known as “the consumer society.” Expectations for larger homes and cars soared. Easier credit brought a cornucopia of material goods within easy reach of the middle class.

By the mid-1970s, and especially after 1980, median wages weren’t keeping pace with increases in our capacity to produce. But flattening incomes didn’t derail the consumption train. Americans continued to buy more, in part by going deeper into debt, by having more members of the family enter the workforce and by working additional overtime. By the boom times of the late 1990s, Americans worked more than the notoriously workaholic Japanese.

The Europeans took a different path. In the second half of the 20th century, prodded by strong and active labor movements and social-democratic political parties, Europeans took a large chunk of their productivity gains in the form of more leisure. They now work only 80 to 85 percent as many hours as Americans, and when you consider that fewer people in Europe work and that they retire earlier, the difference is even greater.

Today, the Netherlands, Norway and Germany have the world’s shortest working hours. The average Dutch worker puts in fewer than 1,400 hours a year, compared with almost 1,800 for Americans. And yet, the Dutch economy has been very productive. Unemployment has been much lower than in the U.S., while the Netherlands has a positive trade balance and robust personal savings. Gallup Inc. ranks the Netherlands fifth in the world in life satisfaction (2010), behind only the Nordic countries (except Iceland) and well ahead of the U.S.

‘The Dutch Miracle’

Dutch emphasis on free time dates to at least 1982, when employers and unions signed the Wassenaar Agreement, in which unions accepted restrained wage growth in return for reductions in working hours and the expansion of part-time employment. The pact ended inflationary pressures and led to an economic turnaround that came to be called “the Dutch miracle.”

Unemployment fell from 12 percent to 5 percent. The number of part-time workers increased sharply. The average workweek was cut by three hours. The Dutch, while continuing to work hard, began to take leisure time seriously.

In 2000, the Dutch parliament passed the Working Hours Adjustment Act, perhaps the most important piece of time-balance legislation ever. According to the law, employers can refuse those workers who wish to switch to part-time work only if they demonstrate that such a reduction would cause serious financial hardship for the firm.

Such employees keep their jobs, opportunities for promotion and hourly pay. (European law requires that part-time workers be paid the same hourly rate as full-timers doing the same work.) Also maintained are health insurance and prorated benefits such as sick leave, pensions and vacation time. The law means a lot to working parents who wish to reduce the stresses of working and caring for children.

A 2007 Unicef study ranked children’s welfare in the Netherlands as the highest in the world. The U.S. was 20th of 21 wealthy countries studied. The Netherlands provides a clear example that you can have a thriving economy while working reasonable hours.

Europeans have a multiplicity of ways to reduce work time, including mandated paid sick days and family leave and offerings of sabbaticals to workers outside academia. But what most improves their time balance is the legal requirement that every European worker get at least four weeks of annual paid vacation time.

For Americans, the median annual paid vacation time has now dropped to little more than one week, according to recent polls. In 2007, only 14 percent of Americans were able to take an actual two-week vacation, and 29 percent got no paid vacation time at all.

Fewer Days Off

That number has grown during the economic downturn. In Washington State, 73 percent of businesses offered paid vacations in 2007; by 2008, the number had dropped to 63 percent, and it is still falling.

Vacation time is increasingly becoming a privilege of the elite. Low-income workers are least likely to receive any paid time off.

Two years ago, House Resolution 2564, the Paid Vacation Act of 2009, sponsored by former Representative Alan Grayson, a Democrat from Florida, would have mandated one-week breaks for workers in companies with more than 50 employees, and two weeks in companies with more than 100.

Almost anywhere else in the world, such legislation would be laughably inadequate, but in the U.S., conservative bloggers excoriated it as wildly radical. The bill was left to die.

Some say that if Americans had more time, they’d simply spend it watching more television. And perhaps they would, but probably only at first. For it is in countries where people work the longest that they spend the most time watching the tube -- Japan, South Korea and the U.S.

In short-work countries such as the Netherlands and Norway, people have enough energy after work to engage in more active and satisfying leisure. Think about it: When do you feel most like flopping on the couch and channel-surfing? When you’re exhausted.

Time for life may be the greatest difference between the social-democratic, softer capitalisms of Europe and the market-fundamentalist American model. Surely any economy based on the “greatest good” would take seriously the need for leisure, which philosopher Josef Pieper called “the basis of culture.”

But wouldn’t that make us less competitive? Apparently not. In their book “Raising the Global Floor,” Jody Heymann and Alison Earle use data from the World Economic Forum to show that countries with generous policies affecting work time are every bit as competitive as the U.S. and other workaholic nations, and do not have higher unemployment rates.

Vacation Pays

Moreover, Leslie Perlow and Jessica Porter of Harvard Business School have shown that requiring time off results in better economic performance. They conducted a study wherein a Boston-based company provided two control groups. The first worked long hours (50 or more a week), skipped part of their vacations and were constantly on call. The second worked a 40-hour week, took full vacations, and left their BlackBerrys at the office.

At the end of their study, Perlow and Porter found that those on time-off teams reported higher job satisfaction, greater likelihood that they could imagine a long-term career with the firm and higher satisfaction with work/life balance.

No surprise there. But the time-off control group also reported increased learning and development and better communication with their teams and, most surprisingly, they actually produced more total output than their workaholic colleagues.

Many exhausted American workers might find these results refreshing.

(John de Graaf is a co-author of “Affluenza: The All-Consuming Epidemic”; the executive director of Take Back Your Time, a group that advocates for more vacation and leave time; and a coordinator of the Happiness Initiative. David K. Batker is the director of Earth Economics, a non-profit organization that promotes a sustainable, fair and prosperous economy. This is an excerpt from their new book, “What’s the Economy For, Anyway: Why It’s Time to Stop Chasing Growth and Start Pursuing Happiness, to be published Nov. 8 by Bloomsbury Press. The opinions expressed are their own.)

To contact the writers of this article: John de Graaf at jodg@comcast.net David K. Batker at comments@eartheconomics.org

To contact the editor responsible for this article: Mary Duenwald at mduenwald@bloomberg.net