Return to No-Vacation Nation

The United States is the only rich country in the world that does not require employers to provide paid vacations. The chart below, from a new CEPR report (pdf) released the Friday before the Memorial Day Weekend, shows the legally guaranteed number of days of paid vacation and paid holidays in each of 21 of the world’s rich, democratic countries.

Bar chart showing vacation and holidays, OECD countriesOf course, most employers do provide paid vacations and paid holidays. But, the lack of a legal requirement leaves many workers –about one-in-four– without any paid time off. Not surprisingly, low-wage workers, part-timers, and those employed in small businesses are most likely to the ones going without:

Table showing paid vacation, paid holidays by worker type

Source: CEPR analysis of BLS data.

The report clearly struck a nerve in the run-up to the unofficial start of the summer vacation season. USA Today ran a big story in their business section. The HuffingtonPost’s Dave Jamieson wrote it up. Salon had a short note. The Washington Post covered it twice: once on Ezra Klein’s blog (over 1,200 comments and counting) and again in the business section today. CBS News and NBC’s also ran great online pieces. We even got some excellent Canadian coverage, including this piece in the Toronto Star.

In discussions about the report, the two most common objections to mandating vacation seem to be: first, that vacations somehow clash with America’s “culture” of hard work, and, second, that requiring vacations would turn the United States into some kind of “European-style basket case.”

On the question of culture, I find it hard to believe that we Americans value time with our families and friends less than people in France or Germany (or anywhere else) do. I think that the main reason we work so many hours here is because of high and rising levels of economic inequality and job insecurity. We don’t ask for or take vacation because we are afraid we’ll be signalling a lack of commitment that could cost us our job or a promotion down the line. And employers can pile on the work because they know we’ll use evenings and weekends to get it done, not because it is our “culture” but because we have few options if we lose our jobs.

On the connection between vacations and macroeconomic performance, I think it is safe to say that over the ranges on offer in the chart above, minimum guarantees have no impact whatsoever on macroeconomic outcomes. Sure, unemployment is high in Spain and Greece, which have generous guarantees of paid time off. But, unemployment is currently lower in Australia (5.5 percent), Austria (4.8 percent), Canada (7.1 percent), Denmark (7.3 percent), Germany (5.4 percent), Japan (4.2 percent), Netherlands (6.2 percent), New Zealand (6.2 percent), Norway (3.5 percent), and Switzerland (4.4 percent) than it is in the United States (7.8 percent).

Paid vacations are a relatively inexpensive benefit (two weeks of paid vacation is less than 4 percent of total compensation costs) and many employers will provide it no matter what the law is. Making vacation mandatory, though, ensures that everyone gets it. A mandate would also contribute in an important way to establishing a social norm that everyone who gets vacation should actually take it.

UPDATE 09/24/13: The chart was updated to reflect a correction to the data for Germany.

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