In the media, focusing on the presidential race is easy. It’s one or a few people, it’s easy to gauge in terms of who is ahead, it’s competitive, and there is a decisive winner.
It’s much easier to focus attention on a particular person or their personality traits than it is to talk about the complex, nuanced and difficult policy issues the candidates are trying to solve which may involve esoteric details that would quickly bore the majority of the population.
Currently, each side of the partisan divide is doggedly against whatever the other side proposes, and it seems the offers are getting more fanciful: a basic income, universal Medicare, no more illegals, more illegals, a job for everyone, banning fossil fuels, banning abortion etc.
However, I have yet to hear anyone discuss an easy fix which I think a majority of the population would agree with: state required leave.
The Laggard Americans
Originally I was going to write this post about unlimited vacation and how it was a sham and indicative of a very passive aggressive (and American) approach to people demanding more vacation.
The response from some employers when pressed on this was: you want vacation? Take all you want, we now have unlimited vacation. In practice, this was a bad idea because of how it could be abused by employers. The reality is you need to have your vacation approved by your manager and without the pressure of having to let employees tick the box of taking their vacation days, managers can abuse this to just work their employees as hard as they traditionally have.
Source: OECD
Americans tend to work more hours than workers in other rich countries. Compared to countries like Chile and Korea though, they put in overall about 10% less hours annually. Compare this with the required leave and holidays in other countries and you start to get the sense that maybe Americans are not working as efficiently as they could with the time they are using.
Source: Statista
Even the above is a bit deceiving because at private companies, they don’t always have their workers take federal holidays either. It’s completely up to the employer. The required holidays tend to follow social norms rather than laws. The sacred cows here are July 4th, Christmas, Thanksgiving and maybe some others like Memorial Day. The irony of this discretion granted to private employers is that many workers end up still working on Labor Day.
When something is not required, profit seeking companies tend to try to squeeze the margins of workers benefits, as long as the market lets them get away with it. Managers take advantage of this ambiguity to pressure employees to stay in the office more. Putting those that don’t take as much vacation against those who fully utilize it. This ends up being a race to the bottom in terms of vacation time and is a contributing factor I believe into why some studies have found that only 28% of American take their fully allotted vacation time.
The Economic Motivation
As noted in this piece from the Washington Post, it also makes sense for companies in terms of their bottom line to offer unlimited vacation because it saves money in 2 areas:
- unused vacation days which are paid out when an employee leaves;
- the accounting liability that is carried over to the next year for unused employee leave.
Admittedly, for a large company, these are minor costs. For a start up though, which is counting every penny and in a fierce battle for existence, it may make a difference. In addition, the unlimited vacation policy may hint at some virtue signaling by start ups to communicate to new hires, especially young ones, that they are cool, hip and with the times.
As I often point out about the mainstream media as well, there is a bit of hype around the unlimited vacation too, as noted here, in a million job listings only 1,300 or about 0.13% offered unlimited vacation. This means people may see through the ploy and a required vacation plan would likely affect the large majority of workers and would be more impactful, hence my focus in this post on a policy around it as opposed to employer talent marketing gimmicks which are hardly found in the real world.
Reading the Times
The counter argument to required leave is that it’s another state intervention into the private sector when US workers are in a dog fight competing unfairly already against low cost workers in other countries without such restrictive labor laws like China and Mexico.
The reality though, as we now well know, is that the jobs that we’re going to go to those places have already left. American workers today are relatively well educated and the economy is focused on the service sector. US workers are competing against places where the economy is structured similarly, places like Korea or Germany, not Mexico or China, which tend to produce lower value products for export.
However the workforce is nervous. Change has come fast, jobs are not as secure as they used to be. There is constant pressure to cut costs, raise profits and benefits in the US for unemployment and state assistance are skimpy in comparison to other rich countries. Workers want more protections but many are also seeking more security.
The Advantages
A national mandatory leave policy achieves the goals of both sides:
- it offers a protection for workers in terms of their vacation time and;
- It pressures employers to become more efficient.
On the first point, it would end the real life theory experiment that I described above between managers and their employees. It pushes that into the realm of working within the confines of the permissible work time and get the most out of employees while they are there.
On the second point, there is some evidence that this is what happens in the countries with required leave. Although the method of dividing the GDP per capital by hours worked is a bit of a crude method of comparison, it offers a baseline to argue that requiring a minimum vacation period doesn’t hurt a country’s competitiveness.
If we take the market view, it also aligns the US with other rich country benefits to be able to attract the high performing, highly educated immigrants and workers that we usually claim that we want. Rather than taking the view that this is big government, you can also argue the point, as was successfully done with the corporate tax rate, that the US is falling behind in terms of international competition for workers and this will help the US keep up with the rest.
Minimum Standards Already Exist in Other Areas
If the move towards a $15 minimum wage across the country teaches us anything, it’s that reasonable minimums in terms of standards of living for workers can be achieved without damaging that US worker competitiveness.
It also isn’t as extreme and polarizing (at least not yet) as Medicare for all or basic income. In essence it’s more John McCain or Joe Biden as opposed to Rand Paul or Bernie Sanders. That isn’t necessarily where either side of the political divide is right now, but it does affect the majority of workers and could help re-engage them in voting.
In that sense it could be a powerful tool for the candidate that takes up the cause as the majority of voters, even in presidential election years, don’t vote. Most people are trying to scrounge out a living and can’t be bothered with high minded policy debates, but if it directly affects their vacation days, it may actually push them to become involved. It’s a pessimistic view of voters but it’s an accurate one according to the data.
Conclusion
We tend to lose sight of the long view when debating so many contentious issues and in reality, presidential power is quite constrained and each president really only ends up accomplishing one or two major policy changes in their administrations. Required leave I believe is an easy win for either side of the aisle given the political climate and worker sentiment. It deserves a greater place in the public debate.
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