“You will never find anybody who can give you a clear and compelling reason why we observe Daylight Saving Time.” – Dave Berry
If you live in the United States, this past weekend you had to endure the time honored tradition of losing an hour every spring for Daylight Saving Time (DST). Also if you are like us, your sleep patterns are still adjusting to the shift in time, which makes waking up in the morning even more unpleasant than usual! A Rasmussen Report from a couple years back found that only 37 percent of Americans surveyed thought daylight saving time was useful, while 45 percent said it was not (the remainder were “not sure”). This is why the internet is littered with funny memes complaining about DST. In this week’s Insight we explore where DST came from and why it is still practiced in the US today. Spoiler alert…like many things in this world, it all comes down to money.
In the late 1700’s, Benjamin Franklin was visiting Paris when he was woken by the sun at the brisk morning hour of 6:00. What he observed was that most Parisians were not up at this time so the valuable daylight was being wasted. A constant proponent of thrift (a man after my own heart), Franklin decided to write a satirical essay suggesting French officials fire cannons and ring church bells at sunrise to jolt the people out of bed. By doing so, people would have to shift their schedules by starting and ending their day at an earlier time. This practice would optimize the use of the natural light being provided by the sun and cut down on the use of candles to light the home at night.
Nothing ever came of Franklin’s amusing essay, but nonetheless the conceptual seed of saving daylight had been planted. It took a little over 100 years for two men on opposite ends of the globe to independently come up with the proposal to change clocks in order to save daylight. The first was an entomologist from New Zealand named George Hudson who enjoyed collecting insects during the couple of hours of daylight after his shift work ended. In 1895 he wrote a paper proposing a two hour daylight saving shift. The second was a Brit named William Willett who in 1905 came to a similar conclusion as Benjamin Franklin when he observed during a pre-breakfast ride how many Londoners slept through a large portion of the morning daylight. Also an avid golfer, Willett disliked having to cut his afternoon round short at dusk. His proposed solution was to advance the clock by one hour during the summer months; very similar to modern day DST practices. Although both Hudson and Willett received interest from various policy makers in their respective countries, neither was able to get much traction with their proposals.
It wasn’t until the First World War that countries began to embrace the idea of DST in order to alleviate some of the hardships from coal shortages during the war. Germany and its allies were the first countries to adopt the practice in April of 1916. Three weeks later the United Kingdom followed suit. The US entered the war in 1917 and established DST shortly thereafter in 1918.
After the end of the War in 1919 agrarian interests lobbied hard to have DST repealed. Unlike an industrial/urban society, farmer’s work schedules are dictated by the sun. As such, it became problematic to coordinate things which were run on “solar time,” such as a cow’s natural milking schedule or harvesting wheat an hour after the dew had evaporated, with things that were dictated by a clock based schedule, such as shipping/transportation and work hours for hired-hands. So contrary to popular belief, farmers were actually stringently opposed to Daylight Saving Time, rather than a proponent of the practice. Even though President Woodrow Wilson, who like Willett was also an avid golfer, twice vetoed the measure to repeal DST, Congress overrode the President’s veto and ended the nationwide practice (although DST was still used by some states and cities). In 1942, President Franklin D. Roosevelt instituted year-round Daylight Saving Time during the Second World War, but then again abandoned DST after the surrender of Japan in August of 1945.
From 1945 to 1966, the United States did not have a uniform, nationwide policy for Daylight Saving Time as states, counties, and even cities where free to independently choose whether or not they wanted to adjust their clocks, which caused widespread confusion for travelers or anyone trying to do business outside of their home town. As a couple examples, in 1965 there were 23 different start and end dates for DST in the state of Iowa alone. In the twin cities, Minneapolis started daylight saving time two weeks after its adjoining/twin city of St. Paul. To make matters worse, there was an office building in St. Paul which housed 9 floors of city employees who did observe DST and 9 floors of county employees who did not.
By the mid 60’s, the United States had moved away from its agricultural roots to a much more industrialized society. As such, the voice (e.g. money paid to lobbyist) of the farmer didn’t carry as much weight as it had in the past. To bring order to the confusion that was DST, President Lyndon Johnson signed a bill called the Uniform Time Act in 1966 which standardized daylight saving time to begin on the last Sunday of April and end on the last Sunday in October with the option for states to opt out of DST completely and remain on standard time year round (an option Arizona and Hawaii currently exercise). Then twenty and forty years later Presidents Ronald Regan and George W. Bush each extended the DST window by several weeks so that it now starts the second weekend of March and doesn’t end until first weekend of November.
Although common here in the States, daylight saving time is not commonly practiced by the majority of countries. The graphic below from Wikipedia shows that most African and Asian countries do not currently practice daylight saving time. Some have in the past but have since stopped. One of such countries is Russia, who oddly enough under command of Stalin implemented DST in the spring of 1930 only to forget to “fall back” later that same year, so the clocks in every Russian time zone were off by an hour for the next 61 years. For other countries closer to the equator, DST doesn’t make sense because the daylight stays fairly constant throughout the year. Still others may not pursue daylight saving time because they don’t see the efficacy of the practice, which is a question we haven’t really addressed yet.
When DST was first proposed, the idea was to save candles or coal or some other fuel source typically used to light or heat homes. The energy needs of today’s society have changed dramatically with the introduction of new technologies such as air conditioners, computers, phones, etc. There have been a couple studies/tests including one in Indiana and another in Australia, which showed that the adoption of DST increases energy use rather than reduces it because the savings from reduced lighting demand is more than offset by the pickup in air conditioning demand. In addition some studies have even shows that car crashes and work related accidents increase the week after daylight saving as referenced in this funny video (“What you lose in sleep, you gain in mortal danger.”) on the topic from Last Week Tonight with John Oliver.
So if the efficacy of DST is little to none if not negative, why do we still practice it? As the spoiler alert indicated, it all comes down to money. For most people, DST is simply an inconvenient ritual that happens every spring and fall, but for others it can be a real cost or benefit. We’ve already mentioned that most farmers see DST as a net negative cost to their business. Joining them would be PTA groups who dislike the idea of children walking to school in the dark or the entertainment industry (movies and TV shows) which makes most of their money when the sun is down. In fact, Nielsen ratings for most TV shows will drop 10-15 points during the first week of DST because people chose to be active outside the house with the extra hour of daylight. As such, the winners of DST is most industries that benefit from people being out of the house and spending money (movie theaters being the potential exception). As such, the voice (again, lobby money) of those that benefit tends to be louder than the one of those that are harmed. According to Wikipedia:
In the mid-1980s, Clorox (parent of Kingsford Charcoal) and 7-Eleven provided the primary funding for the Daylight Saving Time Coalition behind the 1987 extension to US DST, and both Idaho senators voted for it based on the premise that during DST fast-food restaurants sell more French fries, which are made from Idaho potatoes.
Hopefully today’s post was insightful if not a bit entertaining. We realize there are plenty of issues facing our country and the world as a whole that are much more important than the continuance or potential repeal of daylight saving time. We are not going to start a coalition to repeal DST or donate money to some fringe organization with the mission to do so (although, we may sign this petition if we don’t adjust to this time change anytime soon!), but we did want to take the time to explain the history of this nuanced ritual, clear up some misconceptions about its origins, and give some explanation as to why “it’s still a thing”.
Author Elliott Orsillo, CFA is a founding member of Season Investments and serves on the investment committee overseeing the management of client assets. He spent nearly ten years as a financial analyst and portfolio manager working primarily with institutional clients prior to co-founding Season Investments. Elliott earned a bachelor's degree in Engineering from Oral Roberts University and a master's degree from Stanford University in Management Science & Engineering with an emphasis in Finance. Elliott and his wife Gigi have three children and like to spend their time outdoors enjoying everything the great state of Colorado has to offer.
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