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December 17, 2006

Vacation Days Off - Who Is Our Economy FOR, Anyway?

-- by Dave Johnson

In the United States there is no legal minimum number of vacation days for workers. I guess we're all supposed to be thankful to the rich for "giving us jobs."

The rest of the world? Different. (As you read this, remember that 20 days means minimum four weeks vacation by law, not three.)

Here are a few examples:
Austria: 5 weeks, for elderly employees 6 weeks
Belgium: 20 days, premium pay
Brazil: 30 consecutive days, of which 10 can be sold back to the employer
Bulgaria: 20 business days
Croatia: 18 working days
European Union: 4 weeks, more in some countries
France: 7 weeks
Tunisia: 30 work days
Saudi Arabia: 15 days

Who else gets none? China...

So a question: Who is our economy FOR?

Posted by Dave Johnson at December 17, 2006 8:43 AM

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Comments

Excellent piece of research! Can you do the same for pay for working overtime, and requirements for how long the work day is?

Posted by: MJ [TypeKey Profile Page] at December 17, 2006 10:30 AM

For the convenience of all, I've taken this data and appended the most recent unemployment statistics. Clearly (except for the possible exception of Austria), these economies do not work well FOR WORKERS. They suffer high unemployment in these countries.

Austria: 5 weeks, for elderly employees 6 weeks5.20% Belgium: 20 days, premium pay8.40% Brazil: 30 consecutive days, of which 10 can be sold back to the employer11.50% Bulgaria: 20 business days10.6 Croatia: 18 working days16.70% European Union: 4 weeks, more in some countries9.40% France: 7 weeks10.10% Tunisia: 30 work days13.80% Saudi Arabia: 15 days30.00%

The U.S. rate is 5.5%. Perhaps policymakers in these countries could learn a thing or two from the good ol U.S.A.

Posted by: jaymuntz [TypeKey Profile Page] at December 17, 2006 10:31 AM

Jay - good point. Not only do they run their countries for the PEOPLE of the countries, they also report the HONEST unemployment numbers! I know LOTS of people here in Silicon Valley who haven't had work for so long that they are not counted...

P.S. What is the unemployment in China and the other countries where they get no vacation days?

Posted by: Dave Johnson [TypeKey Profile Page] at December 17, 2006 12:54 PM

Nobody lies like the Chinese:
http://english.peopledaily.com.cn/200304/30/eng20030430_116076.shtml

:)

Seriously, China isn't a developed country. They have something like 800 million peasants in China, which is astounding. I wouldn't compare China to the EU or to the US or any developed country.

I don't really buy the argument that the statistic is wrong in the US. If you don't think unemployment statistics among comparable, then what metric would you use? Medium income? Disposable income? I'm pretty sure the U.S. beats most of those countries in most metrics. That means that workers in the US get more of what they want (usually money) than workers do elsewhere.

Posted by: jaymuntz [TypeKey Profile Page] at December 17, 2006 3:19 PM

Does America really have a more efficient, prosperous economy than the vacation-loving people of Europe?
That seems to be the conventional wisdom in the U.S.
I maintain, though, that U.S. "prosperity" these days is an illusion.
1. For a country with such a supposedly strong economy, I find it interesting how Americans these days actually have a NEGATIVE savings rate as a nation. (The supposedly economically "weak" Europeans, by contrast, save anywhere from 10 to 20 percent of their incomes).
2. The unemployment rate in the U.S. is a joke. Jobless workers who are discouraged and no longer seeking work are no longer counted in the official stats.
3. America has by far the biggest prison population in the history of the world. An astonishing 2.2 million people are behind bars in the U.S. Nothing like this exists in Europe.
4. For a country with such a supposedly "strong" economy, I find it interesting how American doesn't really make anything these days that the rest of the world wants to buy. Hence our titantic trade deficits.
5. Interestingly enough, the U.S. has huge trade deficits with nations like Japan and Germany whose workers earn HIGHER average wages than American workers do. (Few Americans, though, are aware of this latter statistic, because the U.S. business press insists on reporting such numbers in the highly-misleading "purchasing power parity" rates, rather than simply reporting workers' wages in different nations in current market values).
6. Western economists would have us believe that workers are "more productive" if they have less vacation time. This is a crock. Well-rested, energetic workers are more productive than burned-out workers who are dragging themselves to work and just doing enough to get by.
7. I remember reading an interview with a BMW executive a few years ago. The interviewer asked him if he was worried about his company's competitiveness, since BMW workers enjoy a minimum of 6 week paid vacation---which is vastly more than Detroit autoworkers get. The executive replied that BMW doesn't want workers who are burned out. He said his company wants employees who are fresh, creative, well-rested and happy. He said a company simply doesn't make great products if everyone is burned out.
8. On this last point, I can definitely relate. I worked many years in corporate America, for a variety of companies. The vast majority of workers I saw were burned out from overwork. Many suffered from poor health as a result. I've also worked overseas for a number of years. From what I've seen, American workers are the most unhappy and burned-out and miserable workers in the First World.

Posted by: WobblyVictory [TypeKey Profile Page] at December 17, 2006 8:51 PM

Wow. Ok. I'll just take them in order

#1 - Americans' negative savings rate can be interpreted as a statement of optimism about their economic futures. They believe economic growth will make up for their lack of savings. Pessimistic Europeans save because they are worried about the future.

#2 - Workers "dropping out." I've always thought if a worker's "discouragement" outweighed his need to put bread on the table, then he must have other sources of wealth. In other words, if a person isn't looking for work, he's living off his existing wealth, so he isn't really unemployed any more than a retired person is unemployed.

#3 - Prison Population - True - not really relevant

#4 - Trade Deficit - This concerns me too. However, mandatory vacation days will can only make the situation worse.

#5 - Japan and Germany's supposedly higher wages. PPP is a completely valid way to compare incomes. Incomes are important for the goods and services they buy. PPP captures that, while straight comparisons based on currency exchange rates don't capture the fact that a $12 beer in a Tokyo bar is a lot more expensive for an American tourist than for a Japanese worker.

#6 - Productivity - Workers who work fewer hours do have a higher hourly productivity. However, economies where the workers work more hours have a higher total productivity. If you measure productivity by the hour, then Europe wins. If you measure it by the worker, the US wins hands down. Since the number of workers is less flexible than the number of hours they work, the US is in a better position vis-a-vie overall productivity.

#7 - A BMW executive says that BMW is great and has advantages over it's American competitors. Tony Snow says Bush's Iraq policy is succeeding. Need I elaborate?

#8 - This is economic science we're discussing here. Everybody can come up with anecdotal evidence to support their own position, but it doesn't help to clarify the issue.

Posted by: jaymuntz [TypeKey Profile Page] at December 17, 2006 9:28 PM

Wow. You're one of these people who can talk for a couple of minutes and then it takes 5 hours to sort out the misinformation:

1. U.S. negative savings rates are a sign of Americans' "optimism"???? This is so laughably wrong that I could write a book on it. The fact is, Americans these days are a deeply pessimistic people these days and feel gloomy about our nation's economy. U.S. economists are constantly scratching their heads and wondering why Bush doesn't get credit for America's "strong economy." If these economists ever bothered to get out of their ivory towers and take a look at the real world, they'd realize that Americans are quite rightly gloomy in an era of job instability and mass layoffs.
2. "In other words, if a person isn't looking for work, he's living off his existing wealth." This is an absurd statement. You clearly must come from a pampered, upper middle class background and you've lived a sheltered life. Where I come from, a lot of these jobless people are either on the streets or in prison.
3. America's gigantic, biggest-in-the-world prison population is not relevant to this discussion???? Fact: people who face bleak economic prospects are more likely to get into trouble with the law, sooner or later. I'm not excusing it, this is just a fact.
4. Mandatory vacation days "can only make the situation worse." You clearly didn't read what I had to say; otherwise you wouldn't be trotting out this clearly discredited line of argument. Fact: Germany, which gives its workers a minimum of 6 weeks vacation has the world's LARGEST trade surplus.
5. "Japan and Germany's supposedly higher wages." No, this is not "supposedly." It's a fact. Go ahead and believe the PPP figures if you want. But these figures have nothing to do with real-world wages. It's interesting how supporters of "free markets" and "capitalism" such as yourself suddenly don't trust the markets themselves when you're talking about world currency values.
6. If U.S. workers are indeed so "productive," why, exactly, is it that we as a nation produce so little that the rest of the world wants to buy?
7. You're twisting around and misrepresenting my words here. I never said that a BMW executive said that "BMW is great." But by any conceivable measure, BMW is doing a trillion times better than the two U.S. automakers. BMW has vastly higher sales growth, growing market share, rising share price, etc. Meanwhile, Detroit is faring so poorly these days that GM and Ford have junk bond status and could well cease to exist in a few years.

Posted by: WobblyVictory [TypeKey Profile Page] at December 18, 2006 5:44 AM

Well. I think you are cherry picking your economic statistics. If I tout the U.S.'s low unemplolyment rate, high per-worker productivity or higher rate of GDP growth, it seems that you will tell me that these statistics are all flawed. Meanwhile, you treat the trade deficit like it's gospel. I don't dispute you on the trade deficit (I actually think all of the statistics are useful). I just think it's convenient for you that all of the cheery statistics are flawed, but the pessimistic ones are accurate. Seems unlikly to me.

Posted by: jaymuntz [TypeKey Profile Page] at December 18, 2006 6:09 AM

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