Israel has to decide when to have a weekend. The Israeli Sabbath, Friday sunset through Saturday sunset will be a part of it. The second day? Sunday and Friday are possibilities. Knowing that productivity is a major consideration, Israel’s prime minister asked an economist to chair the “weekend” committee.
Selecting Sunday means a day to shop, go to the beach, and enjoy leisure activities from which the GDP would benefit. Also though, the weekend would last 2 1/2 days because work closes down at noon on Friday to prepare for the Sabbath. To compensate, the plan’s advocates suggest a longer 4-day workweek.
Looking beyond Israel, the West takes Saturday and Sunday off. Jordan used to call Thursday and Friday their weekend but now, like Egypt, they observe Friday and Saturday. For Christians, Sunday is significant, to Jews, it is Saturday, and with Muslims, the day is Friday. From a religious perspective, that means the weekend could be one of 4 2-day pairs.
The Economic Lesson
The 5-day work week dates back to the 1920s when Henry Ford became one of the first U.S. employers to implement it. 5 days became viable only after work hours declined from a 60 to 70 hour average during the 19th century to 50 hours by the 1920s.
To see the history of work hours and the workweek in the U.S., this article by Wake Forest econ professor Robert Whaples is excellent. Citing demand and supply, productivity and economic growth, Whaples concludes his article with the economics of the work week. In 1900, for example, we had to work much longer than now to earn enough for our necessities. In 1918, we had to work close to 1 hour to pay for a dozen eggs; now, we just need a few minutes. (p.114 from The Price of Everything)
An Economic Question: Would you agree that a shorter workweek can fuel economic growth? Explain.
News articles say that the Israelis are “cheesed off” and “curdled.” Angered by the soaring price of cottage cheese, a Facebook consumer group of 70,000 friends has agreed to stop buying it on July 1. The headline on the boycott page said, “Let it stay in the stores and spoil until the price comes down.”
This “tempest in a tub” began when cottage cheese price caps were removed. You can guess the result. The price of a 250 gram (9 ounce) container soared from 4.82 to 8 shekels ($2.30). A national breakfast staple, Israeli cottage cheese (just like Coca-Cola) has a secret small curd formula.
The Israeli Facebook group appears to want a cottage cheese price cap.
The Economics Lesson
During the early 1970s, to control inflation, U.S. President Richard Nixon implemented wage and price controls. Like taking the cover off a pressure cooker, when the controls were lifted, prices immediately jumped.
As economists, we can explain why with a demand and supply graph. With the demand curve sloping downward, the supply curve sloping upward, the Y-axis price and the X-axis quantity, the curves meet at an equilibrium price and quantity. The market pushes toward equilibrium. Above equilibrium? There is a surplus. Below equilibrium? There is a shortage.
An Economic Question: Why are price controls called a ceiling?
Run privately, guaranteeing 70kph (43.5 mph), a toll lane will be created on a busy Israeli road. More traffic–price up; less traffic, price drops. Another solution to the tragedy of the commons.
To read more, go to http://www.jpost.com/servlet/Satellite?cid=1260930882954&pagename=JPost/JPArticle/ShowFull
Should we be concerned that a toll road is regressive?
Regressive: those who are less affluent pay a higher percent of their income than those that earn more.
Tragedy of the Commons: When a resource is shared by many rather than privately owned, it tends to be “misused” or “overused”. For a pasture, “misuse” is over grazing; in the ocean, fish populations are depleted; in the air, factories pollute.