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Thursday, August 28, 2014
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A paid vacation

Thursday, July 10, 2014 - Updated: 6:23 AM

Ah, summer is here. We all know what that means: The rights crowd will demand that our politicians pass new federal laws to make paid vacation mandatory.

It is true that the United States is the only advanced economy that does not require employers to provide paid vacation time.

It's also true, according to the Organization for Economic Cooperation and Development, that the United States is in last place when compared to the paid vacation time offered to workers in the top 21 industrialized countries.

And it's true, reports CNN, that "not only do American workers get less vacation time than workers in other industrialized countries, but they also opt to take fewer days off."

Consider: The average American worker gets about 18 paid vacation days a year and uses only 14 of them. Compare that to the French, who average 37 paid vacation days a year and use nearly every one of them.

So, the solution is to create new laws and mandates that would force private employers to give their employees paid vacation?

Not so fast, argues Welch Consulting senior economist Stephen Bronars, writing for Forbes.

For starters, 91 percent of full-time private-sector employees already receive paid vacations. Those who do not are typically low-tenure employees at small businesses -- and new mandates would hurt, rather than help, such employees.

Bronars says U.S. labor law is flexible enough to allow employees to negotiate fringe benefits that benefit them and their employers.

Perhaps an employee prefers higher pay and less vacation time, for instance. Maybe he or she prefers more flexible hours. The current flexibility allows employees to work out a range of win-win scenarios with their employers.

So long as the cost of the fringe benefits is lower than the value a particular employee brings to the company, lots of creative and mutually beneficial options are on the table.

Paid-vacation mandates would eliminate such flexibility, however. By forcing employers to give paid vacations to new or part-time workers, who may not currently be receiving them, labor costs will increase.

Private companies, which are in business to make a profit, will have to make up for the increased costs somewhere. They will have to lay off new or part-time workers and reduce the fringe benefits they provide to their most productive full-timers -- hindering their ability to reward productivity and performance.

Bronars writes that our current flexibility "is an advantage, not a weakness, of our system and leads to more employment growth and greater job security than we would have if we adopted European-style labor market regulations."

In other words, the freedom of an individual and his employer to work out the terms of employment themselves generally benefits everyone.

It incentivizes employees to demonstrate and improve their performance and value. And it incentivizes employers to reward employees with the fringe benefits they prefer -- thus increasing employee morale and productivity.

Happier, more productive employees make American companies more competitive and successful, which is key to helping the companies grow and hire more employees, which increases tax receipts for local, state and federal governments.

But none of these benefits matter to the rights crowd that is calling for new government mandates to force private employers to fund another "right" -- the right to a paid vacation. None of the detrimental consequences matter, either.

And we all know what that means: Summer has arrived and the rights crowd will demand that our politicians pass new federal laws to make paid vacation mandatory.

TOM PURCELL is a Pittsburgh Tribune-Review humor columnist who is also nationally syndicated.

     

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