Don't longer working hours decrease overall productivity?
Pretty much. If not allowed sufficient time to rest/relax, the general fatigue of the worker builds up and their productivity plummets.
There's a penalty system for business to discourage overworking their employees. For example, Texas has a 40 hour work week, with any logged hours greater than this equal to 1.5 times your normal pay. Not only does the business have to pay extra for you working, but they have to pay extra for you working at an increasingly poorer rate.
Also, management apparently has a crazy thing where their earnings are capped to 40 hours, meaning, they won't get paid for any more hours that week. Often times they still have to work 50 to 60 hours, depending on the state of the business.