Alone among Western industrialized democracies, the U.S. does not guarantee its workers paid vacations. Indeed, most of our peers guarantee 4 weeks off with pay per year. Economist Dean Baker not only thinks we can afford to match our peers, he also has a plausible explanation for why this is exactly the right time to do so:
If we remember the economy’s basic problem right now is a lack of demand, then this would be an excellent time to consider such policies. This is exactly the time when reduced hours actually are likely to translate fairly directly into more employment. It is when the economy is fully employed that reduced hours are likely to create issues with inflation.
And the idea of raising employer costs should hardly be a major matter of concern when profit margins are at record levels. We absolutely want to raise employer costs — shifting income from corporate profits to wage earners. We can debate how much impact paid leave would have in increasing workers’ compensation, but insofar as it does, that’s a positive and not a negative.
The comparison of unemployment rates with Europe is silly. The United States actually did not have a lower unemployment rate going into the downturn. And it certainly does not have a lower unemployment rate now than several of the slackard countries like Germany and Austria, which have unemployment rates of 5.3 percent 4.7 percent, respectively.
Anyone arguing that this change would interfere with our job creation need only look at Germany and Austria, as Baker points out. So maybe the ugly little secret here is that U.S. corporate leaders are just piss-poor managers. It’s only a hypothesis, but it would explain a lot.