Every year, 70 countries around the world adjust their clocks to squeeze in an extra hour of sunshine. In today’s Finshots, we see if this practice has any economic value.


The Story

On Sunday, Americans woke up an hour later than usual. At 2 am, while everyone was asleep, clocks added an extra hour and reset to 1 am. That’s right, they’d just got a 25 hour day!

Wait, what just happened?

Well, winter is coming!!! Okay, Game of Thrones reference aside, this all boils down to one little detail—Daylight Saving Time.

You see, at the start of spring/summer in March every year, countries like America move the clocks ahead. Clocks jump from 2 am to 3 am and in the process, they forego an hour of sleep. They do this because it fundamentally alters the way each day works from that point onwards. For instance, if the sun were to rise at 6 am, right about when spring approaches, you’d be sleeping until 7 or 8 am and “wasting” sunlight. But imagine if it rose an hour later — at 7 am instead? Then you could wake up right around sunrise and feel like you did a lot more. And guess what? This jugglery would also mean the sun would set an hour later — 8 pm instead of 7 pm. So with this one move, you’d have felt like you put all that sunlight to good use.

However, by winter, you’d have to undo this change because by then, you’d see the sun rising at 8 am for instance — which is counterproductive. You’d be waking at 7 am and it would be pitch dark outside. So they add an extra hour at 2 am (in some places) — which is kind of what happened on Sunday.

To summarize, days are longer in the summer and shorter in the winter, and with daylight saving time, you can optimize your clocks for both seasons. And if you’re wondering where this all started, well then, you’d have to go back in time.

The idea is often credited to one of America’s founding fathers Benjamin Franklin . Way back in 1784, he wrote a satirical letter to the editor of the Journal de Paris saying he was astonished to see the sun rise at 6 am. He said that since no Parisian woke up at 6 am, that “sunlight” was being wasted. However by changing the time i.e. by moving the clock from 2 am to 3 am, the sun would begin rising at 7 am. This way, you could cut the dark nights shorter and save a bunch of money on candles — The sort of stuff we explained earlier.

And from an economic standpoint, it kind of made some sense.

By 1916, the Germans implemented it to save on energy costs during World War I. The US followed suit in 1918. However, some folks have been pushing back against this practice and they make a pretty good case.

It turns out that moving the clock doesn’t just affect  the economy, but it also affects health and wellbeing.

Studies show that this disruption to sleep increases the risk of stroke and heart attack. Heart attacks increase by 24% in the week after clocks move ahead in March. It even leads to more accidents. In the US, car crashes caused by “sleepy daylight-saving drivers” may have killed at least 30 extra people during 2002–2011. In the mining industry, there’s a 6% rise in injuries which leads to a 67% increase in workdays that are lost.

And this happens because moving the clock ahead affects our natural sleep cycle. It takes time for people to reacquaint themselves with this new order of business and it can be catastrophic in some cases.

And about that economic justification and energy savings?  Well, turns out that’s a dud in today’s world also. Take the state of Illinois for instance — They save on lighting and stuff when the daylight runs longer, but those savings are offset by the use of air conditioners for instance.

In fact, the American economy alone loses $434 million annually from this clock changing business. And there are no “extra” productivity gains either. People don't just go to sleep after dark. They can still work. But despite all this evidence, countries like the US still insist on changing the clock twice a year and if you’re wondering why —

Well, Michael Downing, the author of Spring Forward the Annual Madness of Day Light Saving Time has a theory. Americans have this ongoing romance with long summer evenings. They love having an evening barbeque when the sun is still out during summers. And that idea in turn is repeatedly reinforced by a retail lobby that includes people from the recreation industry, barbeque industry, and home & gardening industry. There’s also the fact that people spend more money while shopping and using gasoline.

And so, despite all evidence against this confusing practice, America and other countries may keep changing their clock for the foreseeable future.

Until then…

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