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Comment by tptacek | Hacker News Reader

Time and money are fungible. When you "guarantee" workers 4-5 weeks of vacation, who's to say your comp isn't being adjusted downwards to compensate? What's the apples-apples comparison you could do between, say, Germany and the US to demonstrate how much better a deal the Germans are getting on this?

Meanwhile, if you're making near minimum wage, aren't you more likely to be fighting for additional hours rather than looking for reasons to give them up?

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I used to think that mandatory vacation laws were an undesirable restrictions on worker freedom. I figured workers should have the freedom to choose their own balance between compensation and vacation time.

I changed my mind on the issue. For a long version of my new thinking, I have a blog post: The Four Economic Classes and Their Respective Plights http://intellectual-detox.com/2013/01/20/economic-classes/ I'll try and give a shorter version here.

The problem is that an increasing percentage of jobs in the economy are either zero-sum or positive sum but very competitive or winner-takes-all in nature. In such a situation, unilaterally choosing to take a vacation can be a death sentence. But if everyone takes a vacation, everyone could be better off.

This is a classic prisoners dilemma problem. As a sales person at a software company, I might want more vacation time. But if I take off the time, I might lose the sale to a competing firm, who does not take time off (the I lose, they win quadrant of the game). So both might work the extra day, and we both lose because we are working more. But if there is a law mandating a national holiday, then we both can take the day off, without losing the sale to the competing firm.

For the minimum wage worker, yes, that particular worker might be fighting for more hours. But when all the low wage workers fight for more hours and give up benefits, it just drives down the wages for everyone. The U.S. is rich enough to both give all workers a living wage and enough vacation, so why not enact the policies to do so? (Just mandating more vacation alone, might not be a good idea, but mandating vacation plus giving some sort of wage subsidy either in the form of cash or in health benefits, might be a quite good idea).

It is always great to read your comments on subjects like these.

I'm left though wondering whether society's attentions should be focused on the plight of your "rat-racers" --- the doctors, lawyers, software salespeople. They may be caught in any number of collective action problems, but on the whole American productivity is high and the parts of society that rat-racers engage with are generally not dysfunctional. Rat-racers in the US are not generally working themselves to death, like they are in Asia. So I'm not sure how concerned I should be about the work-life balance of someone making $250,000/yr.

The median household income in the US is $44,000. Does mandatory vacation help a family of 4 making $44,000? Or would they be better off with higher wages?

Perhaps I have 'yummyfajitas to blame for this, but every time an issue like this comes up on HN, I can't help but think about the differing quality of life between the US middle class and the rural poor of Asia. Humanity's big problem is probably not improving the lot of Americans.

So I'm not sure how concerned I should be about the work-life balance of someone making $250,000/yr.

Well, most rat-racers are not making $250k. A more typical example of a rat-racer is a Dunder Mifflin sales reps in The Office, who would probably make between $40-$70k.

The median household income in the US is $44,000. Does mandatory vacation help a family of 4 making $44,000? Or would they be better off with higher wages?

I do not see any reason why the right policies could not both raise purchasing power and grant more vacation time. Keep in mind, as I say in the essay, that the output of most goods in the modern economy is not bound by labor. Most output is bound by natural resource production, land, regulation, and natural monopoly. So if you decrease total labor output by 5%, that does not necessarily mean a decrease in output of food or housing or fuel oil by 5%. So there could be ways of increasing vacation time without lowering people's income.

Humanity's big problem is probably not improving the lot of Americans.

Well yeah, but this article is about America, and I'm a lot more involved in the problems of America than the problems of India. I do not know what I can contribute to solving the problems of India.

I wouldn't be. I don't wanna trade money for vacation. I am young, immigrant, I wanna save up money, I don't wanna trade vacation time for my salary.

You can make your case if you want, but please avoid taking anonymous authority and say things like "if everyone takes a vacation, everyone could be better off, if we just used the government to force every employer to give everyone vacation time".

"I don't wanna trade money for vacation."

My point is that the tradeoff between money and vacation does not exist in the aggregate. You get the vacation for free simply from moving to the lose-lose quadrant of the prisoner's dilemma to the win-win quadrant.

Note that we are talking about paid vacation. You get both. Your paycheck still comes, but you don't go to work.

If you're making near minimum wage, the absolutely last thing you want to do is work more than 40 hours a week. A low-income individual needs more time and energy than somebody with above average income. If you don't earn much, you will have to do a lot of things yourself and spend more time doing it; you'll take the bus instead of the car, you'll spend more time shopping around to save money, you may have to spend more time preparing your own food. If, say, you're taking on a second job, you're not increasing your standard of living; you're mostly just increasing your stress; you're increasing your income, but also your cost of living (generally dramatically more so if you have children).

You mention Germany: Germany does not have a statutory minimum wage; however, it guarantees you certain minimum living standards as long as you are working or actively looking for work (or, of course, if you're disabled, too young, too old, etc.). This includes a roof over your head, comprehensive health insurance, and enough money to get by (if you earn too little, the government will top it off). It's a frugal life (even if it's technically above the subsistence level), but one that can be managed and one that you're not improving on by working extra hours.

If you want to improve upon that situation, your best chance to accomplish that is to acquire extra skills, not to commit yourself to becoming a wage slave. If you're fine with that standard of living, your quality of life will be better by only working 40 hours a week and having 4-5 weeks of guaranteed annual vacation time rather than working 60 hours and not having any vacation time.

They're not completely. Try negotiating more vacation and less pay. This is very difficult in practice. The employer will be concerned about other employees seeing you're getting more vacation (they can't see your pay).

In my experience, the opposite has been true: companies have hard caps (bands) on salary, but not on vacation days, so you can usually negotiate for the latter more easily than the former.

If time and money aren't fungible, shouldn't there be a comparison we could do between Germany and the US to show that? Maybe there is one. I haven't looked hard.

It's expected that money is negotiated. Companies that have bands usually have pretty wide bands and then the band you're in is also negotiable. Most companies will have a vacation policy of some sort which is hard to negotiate against.

Vacation is more visible which can make it a problem. This also creates a "negative vacation" problem- people working on weekends, holidays, long hours and during their "vacation".

What would you compare between Germany and the US? Perhaps a more adequate comparison is US salary level vs. vacation days across different companies. Also a very hard/noisy compare.

We should do an HN survey... (I'd be interested in how much vacation people are getting/taking).

American Expat in Germany here...My salary would absolutely be higher in the U.S. In Germany I get 6 weeks of vacation. I make more than enough money to live comfortably, though. I definitely prefer a liveable salary and time to spend that money, rather than lots of money but no life.

Yeah but mandatory vacation laws takes away that choice from others. Sure you would like to have vacation time in lieu of your salary, but I don't, I am saving up for the future, and I can work harder now when I am young, forcing me to take vacation when I'd rather have more salary, is wrong.

My mother (in France) ended up with 8 weeks off, while the normal stuff is 5 weeks, because with time you're rewarded more days off. The other trick is that it is paid time off, you can still do overtime if you want to (there was even a tax break on overtime for a few years here). But as I said on another topic, since you're paid to work 218 days in the year as a software engineer (and not by the hour), overtime would mean working during the week-end. You can also do a good job and ask for a bigger salary.

You can also do a good job and ask for a bigger salary.

I am sorry but if I do a good job, and ask for a bigger salary, that means without mandatory vacation laws I would get an even bigger salary.

I don't understand how you think that's actually an equal solution?

It's all relative, it's the feeling of having more, not the actual amont of money that counts. the relative feeling of increase, having more than the Jones and stuff like that.

Because the actual trick to have an absolute lot of money is not linked to the hours worked. It's about working in Wall Street, or in some criminal activities, or in some investment. It's never about time spent at the desk, the whole point of earning loads of money is to decouple the revenue from the time worked. You have to earn money while you sleep. Then, why not earning while you tan?

That's the whole discussion between J.Schwartz and B.Gates on the java patents. And I think Gates knows a little bit about having loads of money (I can't say the same about Schwartz).

The mandatory vacation is there to make sure the employee is well rested, efficient at his job and not incurring extra expenses by becoming prone to illness through overwork. You assume that if there were no mandatory vacation laws your salary would be higher but that is highly unlikely - your taxes would be just as high (and in the long term probably even higher because of the side effects), paying to support social measures that improve the life of all citizens (e.g. - guaranteed healthcare).

No I am pretty sure with a mandatory vacation law my salary WOULD be lower.

Sure, because your average US company has the plantation mentality - "the more time the employee spends on the job, the more productive he is", which is obviously not true for software development. The US company sees vacation as wasted time, not an investment into the employee's productivity and well-being.

First of all no one can be sure about such a thing. Secondly why would you not just get a second temporary job on your vacation days. In fact if you're so desperate for money do you have a second job already?

"Forcing me to take vacation when I'd rather have more salary, is wrong."

You have a weird idea of what's "wrong."

What's wrong is American companies that have created this environment where employees feel guilty to stay home when they have the fucking flu or take a week or two off to spend time with their families on vacation. These are the companies that ostensibly offer paid time off benefits.

Then there's the vast majority of the working poor who don't even get this option, so they're screwed when they or their kids get sick or they're at the end of the rope and just need a break. It's not even just pay either -- unpaid sick time can result in getting fired.

No, fight for other, better paid jobs.

From a European perspective, social welfare is supposed to be there to ensure crisis does not turn into disaster, that illness does not bankrupt you, that workers are as free as possible to move to better jobs. See above.

We are probably on the same page politically, more than you might think. But the emphasis on securing mandatory vacation days for employees might be misguided.

Germans are less bitter[1], they have a far less violent society, and live longer? oh, and they are better appreciated in the world. All that with a smaller country. Nothing fungible with money, it's true. That's the trick with Maslow's analysis (not an economist, sorry): past a certain level of income your values drift from simply earning more to more immaterial needs.

[1] They didn't militarily invade any country recently, also there are waves of Germans swarming sunny European beaches during the holidays, they eventually recess in the fall.

Time and money are not fungible; no amount of money can create time. Even money and time off are not fungible, and, given the empirically demonstrated diminishing marginal effect on experienced utilit of additional income, it's highly unlikely that money could even compensate for the lost utility of less time off for most in the upper ranges of the middle class.

If time and money are really fungible try asking your employer for more holiday. I suspect many will not even enter into this kind of discussion.

Just want to clarify my point: in theory I agree that there is likely to be some substituability between the two, but in practice I haven't seen employers do this.

The high costs of hiring and nature of specialization in certain industries makes it impractical to let employees determine how much time they will work each year. Now, if a new position opens up at a company and the fixed costs of bringing on new employees turns out to be low, and there are two equally qualified candidates who would like to split time with each other, then there's little reason why the employer shouldn't take them both on. But getting back to the point, doesn't it make sense for the employer to pay these two employees the full amount for the time they are actually working, rather than paying them half for when they work, and half for vacation/time off?

> who's to say your comp isn't being adjusted downwards to compensate?

Who's to say everyone wants to go to work more to earn more money?

> Meanwhile, if you're making near minimum wage, aren't you more likely to be fighting for additional hours rather than looking for reasons to give them up?

Not when it's paid time off.

Its rare that anyone on minimum wage is on a salary.

Minimum wage jobs tend to be hourly mcJobs. In the UK thats 6.31 an hour, or 9700 a year (~14,500 USD). I struggle to think of salaried jobs that low (apprentice positions maybe but they are highly protected)

Service sector jobs like bank admin are only £1000 or so higher than that per annum.

If you're working an hourly job in the UK, you're still entitled to paid statutory leave (as a fraction of actual time worked) [1].

[1] https://www.gov.uk/holiday-entitlement-rights/entitlement

Can you really use this as an argument against the government protecting workers by ensuring they get a guaranteed amount of holiday a year? I don't think its valid to say EU workers have their pay downsized to compensate for enforced holidays, what about things like minimum wage? (After all, we are talking about people on the bottom end of the scale here, who have minimal protection from employers already)

Here's the definition of fungibility, so the readership at large can decide for themselves whether they think time and money are indeed fungible.

http://en.wikipedia.org/wiki/Fungibility

If you're making minimum wage then adding more paid vacation days is only going to increase your total compensation.

The point is minimum wage workers are often not working 40 hours at any one job to begin with.

Paid vacation days are accumulated by time worked.

If they work only 20 hours a week they will be entitled to half of the yearly paid vacations that a full-time worker is entitled to.

It's a little bit more complex than that because local laws in Europe differ about how many hours each person needs to work continually to accumulate a portion of a day off, but the principal is generally correct.

Always interesting to read your comments on subjects where something like morality meets a business decision.

I don't think this is a tradeoff between morality and business. If I believed it was, I'd opt for morality every time. I'm not certain mandatory vacation day policies actually leave employees better off.

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