The Rat Race and Productivity Measurement

From today's Post by Shankar Vedantam:

"For years, economists have taught their students a simple maxim: As employers hunt for workers, they want to get the best talent at the lowest price.

According to this theory, whether employees want to work long hours or short hours, employers have an incentive to accommodate them, because asking people to do something they don't want to do raises the price of labor -- workers demand more compensation.

On this Labor Day, consider a paradox: Millions of Americans say they feel overworked and stressed out. Many say they want to work fewer hours and find a better balance between responsibilities at home and work. Given that people have been saying this for quite a while, employers should have figured out by now that they can save money by being more flexible in workplace arrangements."

The piece goes on to cite some research showing that the output of law associates can't be measured, so they get rated based on hours worked. Which leads to the rate race as described by many lawyer-writers. I'm struck me two ways:

• First, I always like cases proving economists wrong.
• Second, Jame Q. Wilson says one of the reasons for bureaucracy is that output can't be measured (if it could, it could be quantified and monetized and marketized and privatized). So it's nice to see private enterprises sharing the characteristic.