I agree with point 1 - sad but true. Not only in America as well.
I like that you say "perceived loss of 20%". I wonder how substantial the actual difference in productivity is. I wouldn't want to compare at this day to 16 hours, but rather something like 30 hours.
Why is it so unusual that employers compete with less hours rather than with larger wages? Is it because granting someone with less work would probably make other employees require the same?
I feel that after a certain amount it would be much more enjoyable to get less hours rather than a raise. However the latter seems to be much easier, if not the only one, to get.