Why is Working Harder Making People Poorer?

Why is Working Harder Making People Poorer?

Many of us have bought into the belief that working longer and harder is the path to prosperity. But contrary to conventional wisdom, research suggests that excessive work may make people poorer in the long run. Keep reading for a look at how this counterintuitive dynamic plays out.

We’ve all heard that working harder and longer hours is the path to prosperity. But what if that common wisdom needs to be revised? Far from being a guaranteed road to riches, working harder makes many people poorer.

Recent research about work hours, wages, and productivity paints a concerning picture. As people spend more time on the job, they don’t necessarily see proportional income gains. Long workweeks come at a high cost, from reduced leisure time to worsening health. Systemic economic issues mean extra effort only sometimes translates to financial security.

This dynamic impedes some of our most deeply held beliefs around effort and success. However, understanding how overwork could exacerbate financial inequality and financial struggles is essential. Evaluating the complex relationship between work and prosperity enables us to understand how to build careers, businesses, and create assets that reward hard work.

This article explores how and why excessive work may undermine incomes and overall well-being for many. Key factors range from wage stagnation to globalization’s impact on competition for jobs and beyond. The goal is not to discourage diligence and hard work but to question assumptions about how we measure value, structure careers, and how to receive more economic rewards from our efforts. There may be better pathways than just working constantly in pursuit of financial stability. By rethinking the role of work in society, you can educate yourself on how to optimize your income earning potential.

Here are the key lessons you will learn in this article.

Key Takeaways

  • More hours worked does not equal higher productivity or wealth for individuals or nations. Fatigue sets in, and diminishing returns kick in after long hours.
  • Wage growth has lagged far behind inflation and productivity increases. Working harder has benefited executives and investors more than average workers.
  • Precarious gig economy jobs and globalized workflows bring less stability. Hard work no longer guarantees steady pay.
  • Overwork leaves little time to develop skills, change careers, or start side businesses that could improve financial circumstances.
  • Mental and physical burnout from extreme work hours may generate substantial healthcare costs that strain household budgets.
  • Excessive work takes away leisure time spent with family and friends and makes it difficult for self-care activities that impact personal and financial well-being.
  • Stagnant wages and unstable incomes lead many to incur significant debt to afford basics like housing, medical coverage, and transportation, driving a complex debt cycle.
  • Putting in long hours has diminishing economic returns for workers and companies due to fatigue and inefficient busy work.

Keep reading for a deeper dive into each principle and lesson.

Working More Isn’t Boosting Productivity

Economists look at labor productivity, or economic output per hour worked, as a critical measure of a country’s financial health. But surprisingly, labor productivity is lower in countries where people operate more hours per year, like the United States, Greece, South Korea, and Mexico. In contrast, countries where people work fewer hours, like Germany, Denmark, and the Netherlands, have higher productivity and per capita wealth. Putting in more time does not directly translate to increased economic output or productivity.

Working long hours can be counterproductive. Mental and physical fatigue sets in, leading to diminishing returns from each additional hour on the job. Our cognitive abilities decline when exhausted, making us less efficient and effective in the latter half of a long workday or week. Both individuals and economies do better when well-rested workers maximize their productive hours.[1]

Stagnant Wages Aren’t Matching Extra Work

Although many Americans have increased their work hours, their wages have not kept pace with inflation and rising living costs. From 1979 to 2020, net productivity rose 61.8%, while the hourly pay of typical workers grew far slower—increasing only 17.5% over four decades (after adjusting for inflation). [2] Productivity has grown 3.5 times as much as pay for the typical worker. [3] Working harder does not necessarily mean making more money. While economic output has expanded substantially in recent decades, these productivity gains have disproportionately flowed to corporate executives and shareholders rather than average workers. Putting in more time, effort, and energy at many companies does not guarantee increased pay or financial security.

Gig Work Equals Unstable Income

The rise of the gig economy has also pushed many workers into less stable contractual and freelance arrangements without solid safety nets. Short-term contracts and piecemeal work offer fewer benefits and income security than conventional full-time jobs. Constantly piecing together a viable income from fleeting side gigs can be precarious, requiring long hours with inconsistent pay. Similarly, increased globalization and automation have made many traditional jobs less secure. More than hard work may be needed to guarantee a stable financial future in today’s economy. You must work smarter and acquire highly monetizable skills that are in demand for the workplace to compete.

No Time for Education or Entrepreneurship

Working excessive hours also leaves little time for activities that could enhance earnings potential, like continuing education, training, side hustles, or entrepreneurial efforts. Further developing skills and know-how helps workers move into higher-paying roles. Starting a side business or building a supplementary income stream could reduce financial pressures. However, overwork and constant fatigue make it challenging to pursue those opportunities. Prioritizing time-intensive jobs out of short-term necessity can make it almost impossible for long-term investments developing your own human capital and launching personal ventures that would offer greater future prosperity.

The Physical and Mental Toll of Overwork

The increasing pressure to work longer and harder has affected mental and physical health. Burnout and chronic overwork stress lead to measurable well-being and work performance declines. The health consequences of work-related anxiety and exhaustion also generate increased medical expenses, from prescriptions and counseling fees. Poor health resulting from extreme work hours can severely impact family budgets and quality of life. For those on salary, the more they work the less they make and the personal cost is high.

More Hours, Less Time for Family and Leisure

Excessive hours can crowd out time for family, friends, and leisure activities. Surveys show that many full-time workers in developed nations have only 1-3 hours of free time daily, including weekends. Constant work leaves little space for relationships and recreation, both of which have profound economic implications over the long term. Household dynamics suffer when parents or spouses are constantly working. Retail sales depend in part on consumers having time for shopping. Cultural activities rely on folks having discretionary time and income beyond covering necessities through work.

The Debt Trap of Working to Afford Basic Needs

Stagnant wages and unstable incomes mean that for many, taking on extra work hours is the only way to try to meet rising basic expenses. But constantly working to afford essential housing, healthcare, education, and childcare costs can lead to a debt cycle. When incomes aren’t covering needs, many turn to credit cards, payday loans, and other predatory lending that exacerbate financial struggles. Research shows heavy debt burdens correlate strongly with increased stress, depression, and lost work hours due to ill health. Getting ahead when stuck on a work-and-debt treadmill is challenging to get by. Part time jobs also come at a high cost in remaining time and energy and usually pay little in wages.

Diminishing Returns from Too Much Work

The irony of overwork is that putting in too many hours leads to diminishing returns. Busywork expands to fill the time available, and fatigue sets in after long hours, reducing hourly efficiency. Working excessive hours does not equate to generating more economic value much less wealth. Studies of professional workers found no increase in productivity beyond 49 hours per week. In some cases, output declines after 55 hours. The extra efforts of overly tired employees generate less value for companies. Workers aiming to impress by being the first in and last out tend to underestimate declining marginal productivity. Prioritizing rest and efficiency over face time generates better economic outcomes for all.


While we often connect working relentlessly to financial success, the reality is more complex. Increased hours do not automatically translate to higher productivity or earnings. Overwork can harm physical stamina, mental health, skill development, personal relationships, and long-term earning potential. Systemic issues around stagnant wages, benefit inequality, income instability, and access to credit exacerbate the impacts of overwork. Evaluating and improving our work culture is crucial to creating an economy that rewards effort, enables people to thrive, and grows productivity.

In many ways, our work culture has become disconnected from the realities of human limits and actual productivity. We glorify insane hours and constant hustle as the path to financial success. However, the overwork epidemic may subtly exacerbate economic struggles and inequality for many. Reigning in excessive work hours and rewarding productivity gains through higher pay or less working hours could move us toward greater prosperity for all.