The rise of worktime was unexpected. For nearly a hundred years, hours had been declining. When this decline abruptly ended in the late 1940s, it marked the beginning of a new era in worktime. But the change was barely noticed. Equally surprising, but also hardly recognized, has been the deviation from Western Europe. After progressing in tandem for nearly a century, the United States veered off into a trajectory of declining leisure, while in Europe work has been disappearing. Forty years later, the differences are large. U.S. manufacturing employees currently work 320 more hours--the equivalent of over two months--than their counterparts in West Germany or France.

The decline in Americans' leisure time is in sharp contrast to the potential provided by the growth of productivity. Productivity measures the goods and services that result from each hour worked. When productivity rises, a worker can either produce the current output in less time, or remain at work the same number of hours and produce more. Every time productivity increases, we are presented with the possibility of either more free time or more money. That's the productivity dividend.

Since 1948, productivity has failed to rise in only five years. The level of productivity of the U.S. worker has more than doubled. In other words, we could now produce our 1948 standard of living (measured in terms of marketed goods and services) in less than half the time it took in that year. We actually could have chosen the four-hour day. Or a working year of six months. Or, every worker in the United Statescould now be taking every other year off from work--with pay. Incredible as it may sound, this is just the simple arithmetic of productivity growth in operation.

But between 1948 and the present we did not use any of the productivity dividend to reduce hours. In the first two decades after 1948, productivity grew rapidly, at about 3 percent a year. During that period, worktime did not fall appreciably. Annual hours per labor force participant fell only slightly. And on a per-capita (rather than a labor force) basis, they even rose a bit. Since then, productivity growth has been lower, but still positive, averaging just over 1 percent a year. Yet hours have risen steadily for two decades. In 1990, the average American owns and consumes more than twice as much as he or she did in 1948, but also has less free time. . .