Opinion: Americans waste 20 million hours every year changing clocks for daylight savings

Chris Hopkins

Everyone knows the story of daylight savings time, right? How the annual rite of springing forward and falling back provides more harvest daylight for farmers and conserves valuable energy resources? Well, not so much. While conservation was once a valid motivation, the world has changed and the actual economic benefits are now at least offset by additional costs. Besides, farmers actually hate it and would rather milk in daylight.

From an economic perspective, we are probably better off picking one clock setting and sticking with it year round.

Like many innovations, the idea for daylight savings is often attributed to Benjamin Franklin. In 1794, Franklin mused about the potential to reduce the cost of candles by mandating more daylight hours in the evening. In reality, the concept is at least as old as the Roman Empire, which invented water clocks to supplant the sundial and then routinely adjusted the time in different months to comport with the changing sunset.

Germany lays claim to the first modern adoption of the practice, shifting clocks forward in 1916 to save fuel and reduce the need for artificial light. The United States and England quickly followed suit for the duration of the war and then reverted to standard time. Franklin Roosevelt sprang forward one hour to perpetual "war time" shortly after Pearl Harbor until the end of the war in 1945.

Congress acted several times to standardize the practice, beginning in 1966 and last revising the schedule in 2005. Only two U.S. states, Arizona and Hawaii, have opted out and around 70 nations currently observe some form of daylight savings.

Interestingly, the presumed economies from shifting the clock are at best ambiguous and likely spurious. A 2008 study of electrical usage by the U.S. Department of Energy found a relatively small but tangible savings of 0.5 percent per day during daylight savings. Conversely, a 2007 paper published by the National Bureau for Economic Research reviewed Duke Energy data in Indiana and estimated the state spent $8.6 million more on electricity than if they had remained on standard time. The added drain from air conditioning and household electronics has leveled the playing field in terms of evening power consumption.

Many researchers have found little net impact on energy usage one way or the other, with costs negating benefits. Where the real difference may lie is in health care costs attributable to making the time change. Health researchers have documented deleterious effects from even a one hour shift in wake-up time, as the natural circadian rhythm of the body is perturbed. The American Journal of Cardiology reports an increase in heart attacks immediately following the onset of daylight savings, and the Journal of Applied Psychology identified a drop in job productivity. Taken together, these effects could cost the U.S. economy upward of one half billion dollars annually, according to data scientists at Chmura Economics.

Not to mention the time lost to the semiannual ritual of resetting the clocks. Assuming there are 115 million U.S. households that dedicate five minutes each time setting and resetting their timepieces, we waste nearly 20 million hours a year in our festival pursuit of delaying the sunset. These costs suggest the practice may have outlived its usefulness.

There are both winners and losers in permanently adopting either standard or daylight time. What is clear is that the real cost lies in the process of making the change each year, both in lives and in the related drag on the economy. Economically speaking, best to choose one time and stick to it year round.

Christopher A. Hopkins, CFA, is vice president of Barnett & Co. Investment Counsel.