News Column

U.S. Falls Behind in Paid Time Off

May 24, 2013
busy workers

Memorial Day weekend kicks off the USA's summer travel season, but some workers won't be able to kick back on a vacation this year.

Nearly one in four Americans (23%) has no paid vacation days, says a report released today by the non-profit Center for Economic and Policy Research in Washington, D.C.

"Relying on businesses to voluntarily provide paid leave just hasn't worked," says John Schmitt, a senior economist at the center.

The report analyzed national and international data on 21 democracies in the Organisation for Economic Co-operation and Development. The group of 21 countries includes 16 in Europe, Australia, Canada, Japan, New Zealand and the USA.

The USA is the only advanced economy that does not require employers to provide paid vacation days, the report says. Many U.S. companies offer paid vacation days and holidays, but no law sets a minimum.

The 27-nation European Union requires at least 20 paid vacation days a year. Canada and Japan require 10.

U.S. law also does not make provisions for paid holidays, but many countries with a comparable standard of living do. For example, Austria guarantees 13 paid holidays; Canada, nine. France requires one.

U.S. private-sector workers have an average of 10 paid vacation days and six paid holidays a year, the report says; that doesn't meet the minimum requirement in 19 countries.

The report also finds a gap between the USA's lowest and highest earners. About 90% of higher-wage workers have paid vacations, vs. 49% of lower-wage workers. About 86% of employees in companies with 100 or more workers have paid vacations, vs. 69% in those with 99 or fewer.

The center first analyzed vacation and holiday data six years ago. "It is striking that six years after we first looked at this topic, absolutely nothing has changed," Schmitt says. "U.S law and U.S. employer behavior still lags far behind the rest of the rich countries in the world."

Rep. Alan Grayson, D-Fla., this week introduced a bill that would amend the Fair Labor Standards Act to require employers to provide paid annual leave. He first introduced the Paid Vacation Act in 2009.

"We need it for the health and well-being of our workers," he says. "We also need it for businesses, because people who are forced to work every single day lose productivity."

But some are skeptical about a mandate. James Sherk, a senior policy analyst in labor economics at the Heritage Foundation, says employers provide paid vacation to attract and retain a high-quality workforce. Employers take the cost of benefits out of workers' pay, he adds. "You might not want your pay cut."

Daniel Mitchell, a senior fellow at the Cato Institute, agrees. "When you make it more expensive to hire workers, fewer workers get hired."

Others stress the importance of ensuring vacation time for workers.

John de Graaf of Take Back Your Time, a Seattle-based non-profit, says it is "primitive" that the USA does not guarantee paid vacation. "We're paying the costs of health and stress as a society."

Vacation is important even if work is pleasurable, says Joshua Coleman, a San Francisco-area psychologist. "Work is inherently stressful. There are psychological demands of interacting with other people, meeting deadlines and performing. We need breaks ... to recover, reboot."

Source: Copyright USA TODAY 2013

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