Freeman

ARTICLE

Moonlighting

NOVEMBER 01, 1964 by W. M. CURTISS

Dr. Curtiss is a member of the staff of the Foundation for Economic Education.

Are you a moonlighter? Most of us are, in one way or another.

The term moonlighting refers to holding down more than one job, the purpose being to gain additional income. The practice is reported to be widespread.

In the "good old days" when 90 per cent of the workers were farmers, that first job was about all anyone could handle—rising with the sun and the chickens, and ready when they were, to call it a day.

Then, with savings and capital, came technology and industrializa­tion. A man could earn a better living working 8 hours for five days a week than six 10- or 12-hour days had previously afforded. This gave him more time at home each day with his family, and a day now and then for fishing or golf or other forms of leisure. There were some, of course, espe­cially the young and vigorous and those with heavy family responsi­bilities, who preferred more in­come to more leisure. They were willing to work more than 40 hours a week if it meant more income, and such jobs were open in a num­ber of industries.

The depression of the 1930′s, with its heavy unemployment, helped to spread the erroneous theory that the number of job opportunities was limited and that these jobs ought to be shared a­mong available workmen.

The law recognized the 40-hour week, requiring employers to pay one-and-one-half times regular wages for overtime hours. This, of course, was an added cost of doing business and a hindrance to the laborer seeking extra work and income. Though studies enu­merated the blessings of the short­er day and week, the main idea was to spread the work.

The point is that this com­pulsory spread-the-work idea is now built into our economy; in most cases, the person who prefers more income to leisure must now seek a second job rather than work more hours at his regular job—hence, moonlighting. And the shorter the work week, the more moonlighting.

During the depression, there was considerable unemployment among the rubber workers in Ohio. Labor unions and manage­ment negotiated a 36-hour week which has continued to this day; this helps explain the very high incidence of moonlighting among these workers. In other words, a 36-hour week doesn’t keep a man as fully employed as he would like to be when the choice is more in­come or more leisure.1

Higher Pay the Object

What this suggests is that any further compulsory reduction in the length of the work week should be considered with caution. Electrical workers in New York City recently went on strike for a 30-hour week, among other things. This was not a question of spreading the work, because there were few unemployed electricians. Nor was it an expression of de­mand for more leisure. It was a thinly-disguised way of increas­ing wages. The workers knew that many of them would be asked to work beyond the 30 hours in a week at time-and-a-half for ad­ditional hours. This would yield a handsome wage indeed; and with a strong union, with tight control over the entrance of new members, such a monopoly ar­rangement is not impossible.

Even with a penalty of time‑and-a-half for overtime work, some firms prefer to pay it in special cases rather than hire and train new workers for the job. This added expense to the firm is not as great as first appears be­cause some of the fringe benefits—now a sizable proportion of the entire payroll—do not increase with overtime pay. The fact that many firms now pay the time-and­ a-half penalty indicates that it is the best alternative under the cir­cumstances.

High government officials re­cently have suggested that over­time wages should be double the regular wage rate. The argument seems to be: "If time-and-a-half for overtime will not discourage this evil practice, let’s try double time." The objective, of course, is to reduce unemployment—to spread work among more em­ployees.

There can be little doubt that the new proposal would discourage the hiring of overtime help. Few firms could afford it. Whether it would appreciably reduce unem­ployment is another question. It would certainly stimulate a search for greater efficiency and acceler­ate the introduction of labor-sav­ing equipment. It doubtless would mean an over-all reduction of take-home pay for workers and probably would result in fresh de­mands for increased pay scales.

One thing is certain: Double time for overtime would increase moonlighting.

We should have realized by now that unemployment during periods of general prosperity is caused by overpriced labor—overpriced by reason of compulsory minimum wages or because wages have been negotiated under threats of coer­cion at a level higher than a free market would allow. A happier alternative is to let the worker and the employer agree on wages and hours suitable to both.2

Moonlighting at Home

Increased leisure has given rise to another kind of moonlighting, sometimes referred to as "do-it-yourself," and involving every­thing from refinishing furniture to actual home building. This is a reversal of the long-time trend toward specialization and divi­sion of labor in an advancing economy.

An example of moonlighting is that of the small, part-time farm­er working at an industrial job within driving distance. While he can hardly be called a farmer, he is able to get some of his living off the land and may have a bit to sell. Thus, he is moonlighting—extending his income as though he held two jobs.

Many would not think of these activities as moonlighting—the extension of income. Many would say they paint their own homes because they have the leisure and like to use it in this active man­ner. True enough, much of the do-it-yourself activity of workers around their homes on weekends and on vacations is fun-work. But consider this: Suppose it would cost $600 to hire your house painted. You would have to earn around $900 before taxes to get the $600 for the painters. So, you may choose to moonlight or do-it-yourself. Not bad! But, you’d better like house painting!

The answer to the question of leisure versus income is a very personal one and varies tremen­dously between individuals. In­volved, besides the length of work week, is the trend toward com­pulsory and permanent leisure at age 60 or 65. Rather than force workers into a uniform pattern, it would seem desirable to leave arrangements as flexible as pos­sible. This should benefit both em­ployers and employees. While there is nothing inherently wrong with moonlighting, it seems a rather clumsy way of solving the problem of the man who would prefer additional income through additional work.

 

—FOOTNOTES—

1 It is reported that many second jobs taken on by moonlighters are in the category of contract work or self-employment such as housepainting, and thus are not subject to tax withholdings. The amount of this income which es­capes taxation, cannot, of course, be accurately measured. But that is another story.

2 For a more complete discussion, see Why Wages Rise by F. A. Harper, Foundation for Economic Education, Inc., 1957. 

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November 1964

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