The Exchange

If You Want More Paid Vacation, Consider a Move Here

Nearly one of four Americans (23%) has no paid vacation and 23% have no paid holidays, while most of the world’s developed countries offer workers at least six paid holidays a year. These statistics come from a new report by the Center for Economic and Policy Research (CEPR), “No-Vacation Nation Revisited,” which could cause Americans to lament their too-much-work, not-enough-play lives.

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The report revisits an analysis originally done by CEPR six years ago. Since the 2007 CEPR study, the U.S. has made up none of the gap with the rest of the major economies that are members of the Organization for Economic Cooperation and Development.

John Schmitt, senior economist and co-author of the CEPR report, said: “It is striking that, six years after we first looked at this topic, absolutely nothing has changed. U.S. law and U.S. employer behavior still lags far behind the rest of the rich countries in the world.”

While the U.S. is the only advanced economy that does not guarantee its workers paid vacation, all European Union member countries set a vacation minimum of four weeks or 20 days per year. Several countries require even more than that. France is the most generous, mandating 30 days of paid annual leave, followed by the UK with 28 days, Denmark, Norway, Sweden and Finland with 25, and Germany with 24. Austria and Portugal also both require a combined 35 days (paid vacation and holidays). After the U.S., Japan and Canada require the fewest number of paid vacation days, with 10.

Lower-wage workers

A main focus of the CEPR report was to highlight the inequity of paid time off for certain types of workers in the U.S. Though they’re not required by law, many U.S. employers of course do offer some or all of their workers both paid vacation and paid holidays. Using data from the Bureau of Labor Statistics’ National Compensation Survey, about 77% of private-sector employees are in jobs where their employer offers paid vacation. The average private-sector worker gets about 10 days of paid vacation a year, plus about six paid holidays – still fewer than the EU minimum.

But low-wage workers are less likely than higher-wage workers to have paid vacation, and the same is true for part-timers vs. full-timers. Just 49% of low earners have paid vacation, compared with 90% of high earners. The average low-wage worker with a vacation benefit got just nine days of paid vacation per year, compared with 16 days for high-wage workers, according the CEPR report.

Rep. Alan Grayson (D., Fla.) introduced a bill last week that would require employers with more than 100 workers to provide workers with one week of paid leave annually, in an attempt to “bring the U.S. in line with other industrialized nations,” the press release said.

The euro area’s seasonally-adjusted unemployment rate was 12.1% in March, up from 12.0 % in February, compared with 7.5% for the U.S. in April. But attempts to tie Europe’s generous vacation policies to its current economic woes are tempting but somewhat dubious. Among EU members, Austria had the lowest unemployment rate (4.7%), followed by Germany (5.4%), and Greece had the highest rate (27.2% in January), followed by Spain (26.7%) and Portugal (17.5%).

Even more vacation, more pay for some

As if those 30 days off required by law weren’t enough, the CEPR report notes that, of the 21 countries it reviewed, several mandate even more paid leave for younger and older workers. Austria, Germany, Italy and Switzerland mandate more vacation days for young workers (Italy offers an extra 10 days).

Civic engagement is rewarded in European countries. Workers under the age of 30 in Switzerland who do volunteer work with young people are entitled to an additional five days of leave. Employees in Spain get paid leave for acts of civic duty including jury service, for moving, getting married or acts related to union work.

But wait – there’s yet more reason to envy our friends across the pond (in fact, you might want to sign up for German lessons right about now). Some European countries require employers to pay workers at a premium rate while they’re on vacation. Austria is the most generous, the CEPR authors write – companies there pay workers taking a month-long vacation a “13th month” salary, which is paid at the same time as the usual monthly salary but taxed at a lower rate. Similarly, Belgian employees get their regular salary plus an additional one-twelfth of 92% of their gross salary during the month they take their leave. And workers in Denmark receive a “holiday supplement” equal to 1% of their annual salary.

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