FOREWORD The paid annual vacation that is taken for granted by millions of American workers today is a relatively modern development in the economic history of the United States. But its acceptance has spread so rapidly that now it is the exception rather than the rule that the paid annual vacation is not an integral condition of employment. Moreover, the tendency has been toward lengthening of the paid vacation period-from 1 week to 2 weeks to 3 weeks until, at present, the 4-week vacation is not at all unusual. In the same manner, the workweek and the workday have steadily shrunk from the 12- or 14-hour day of the last century to the 10-hour day to the 8-hour day, and so on downward. The pressure on the old standard 40-hour week grows steadily each year. This report, prepared for the Select Subcommittee on Labor during the 89th Congress, is a careful examination of a question being given increasing attention by individual employees, by the business community, by labor, and by Government economists and policy planners: Should our efforts be directed toward further shortening of the workday or workweek, or toward lengthening the paid annual vacation? The report is a valuable contribution to the literature of this field, and the information it contains will be useful to the Committee on Education and Labor and to the entire Congress as events continue to unfold. CARL D. PERKINS, Chairman, Committee on Education and Labor. V ANNUAL VACATIONS AND VACATION LAWS: RECENT DEVELOPMENTS IN THE UNITED STATES AND ABROAD SHORTER WORKING HOURS-THE OPTIONS AVAILABLE During 1963 the Select Subcommittee on Labor, under the chairmanship of Representative Elmer J. Holland, conducted lengthy hearings on the subject, "Hours of Work"-the most extensive, thorough congressional hearings on this specific subject since the passage of the Fair Labor Standards Act of 1938. In one of the many statements by experts contained in the two printed volumes of these hearings, Prof. A. J. Jaffe, of Columbia University, provocatively summed up for the subcommittee the opportunity before the American people and his view of the principal choices of methods for exploiting it. Professor Jaffe said: In the future we can count on labor productivity to con- Should we have a shorter workweek or a shorter work- ** I prefer the 40-hour week and longer vacations. What the cross section of the American working force may prefer, I do not know; to the best of my knowledge, no study has ever been made of a cross section of American workers on this question.1 The question proposed by Professor Jaffe was: "Should we have a shorter workweek or a shorter workyear?" Actually, the two are not mutually exclusive. The fundamental choice is of the extent to which Americans wish to take the benefits of rising productivity partly in the form of additional leisure time, rather than wholly in the form of increased output of goods and services. The secondary choice is of the manner in which such additional leisure time shall be distributed. Americans can decide to reduce the standard workday, or to reduce Hours of Work," hearings before the Select Subcommittee on Labor of the Committee on Education and Labor, House of Representatives, 88th Cong., 1st sess., 1963, pp. 728–729, 732. the number of workdays in the year or to reduce both. There is no necessity at all to choose one alternative and completely forego the other. The progressive reduction of working hours in the United States has, in fact, come through a combination of the shorter workday and the shorter workyear. In the latter part of the 19th century the 12-hour day and 72-hour week were common, while the paid annual vacation was virtually unknown. Now the 8-hour day and 40-hour week are standard, the 2-week paid annual vacation has been extended to most workers, and a growing minority of long-service workers receive 3 or more weeks of annual vacation. Though the continuing decrease in the annual number of workdays has been an important element in the long-term reduction in hours of work, it has not-in the United States to date-received much legislative attention. In the years since 1938, when Congress enacted the Fair Labor Standards Act, proposed legislation has repeatedly been introduced to lower the workweek below the standard 40 hours. Especially in recent years, a persistent debate has been carried on over the desirability of further reducing worktime by congressional enactment. This debate has focused almost entirely on the length of the workweek-on proposals to cut the FLSA standard to 37.5, 35, or 32 hours, and to deter the working of hours in excess of the standard workweek by raising the FLSA overtime premium rate from one and one-half to two times the regular hourly wage. Surprisingly few of the participants in this debate have given explicit consideration to the possibility of reducing working hours, on an annual basis, through Federal legislation to require substantial annual paid vacations for all employees covered under the Fair Labor Standards Act. By its lack of legislative action, so far, to establish an annual paid vacation standard, the United States is in a position quite in contrast to that of many other advanced, industrialized nations. Abroad, labor laws commonly require employers to provide a minimum term of annual vacation to their workers. Public concern, as expressed through legislation, is not confined to the length of the workday and workweek, but extends to the worker's interest in being assured a substantial period of release each year from his regular work routine however long or short each individual workday may be. Since working hours in the United States will undoubtedly continue to be reduced in the future-and since other major nations have chosen to make the paid annual vacation a formal legal obligation-it is appropriate that American policymakers should give more serious attention than in the past to the extended annual vacation as an important means for distributing the benefits of reduced working time to our citizens. This report, therefore, will present the facts and issues which appear most relevant to the making of an informed decision on the merits of requiring employers, by Federal law, to give paid annual vacations to their employees. The report will examine the current status of vacations in American private industry and the problems involved in expanding the numbers of workers who actually receive vacations and in lengthening the average period of vacation received. It will also present an analysis of the policies now being followed by leading nations of Western Europe and the British Commonwealth with respect to requiring paid vacations by law. This analysis of vacation legislation abroad will highlight the importance that other nations have ascribed to guaranteeing vacations for their workers and will also provide insights concerning the ways in which these nations have dealt with the issues that must be considered when compulsory vacation laws are enacted. PAID ANNUAL VACATIONS CURRENT STATUS IN THE UNITED STATES No satisfactorily comprehensive information is available on the current status of paid annual vacations in the United States. A highly accurate estimate cannot be made of the number of American workers entitled to receive paid vacations upon meeting minimum length-of-employment requirements, or of the number of workers who actually do take such vacations in a given year. Nor can a precise tabulation be made of the numbers of workers entitled to vacations of specific lengths-1 week, 2 weeks, 3 or more weeks. Moreover, there is a wide range of variation among vacation plans with respect to minimum and maximum weeks of vacation provided and the periods of employment required to qualify for vacations of different lengths. This diversity defeats any effort to embrace current American vacation practices in a very brief capsule description. Despite the absence of comprehensive and precise data, however, there is no doubt that today paid annual vacation plans cover the great majority of nonagricultural workers, blue collar as well as white collar. The expansion of coverage-which began in the middle 1930's and accelerated sharply during World War II-has now proceeded so far that future additions to the total paid vacation time of American workers will come primarily from liberalization of existing vacation plans rather than from introduction of vacations into the relatively few industries where they are not yet customary. Indeed a strong trend of liberalization of vacation plans has been a pronounced feature of the postwar period. Both through collective bargaining and unilateral decisions by employers, paid annual vacations have been lengthened and qualifying periods of employment reduced for millions of workers in recent years. A rapid survey of the growth of vacations in the United States will help to place our current practices in perspective. It will also highlight the relative importance of the past three decades in the overall historical development of paid vacations. Growth of Coverage Originally, American employers viewed the paid annual vacation as a privilege appropriate only for the worker of white-collar status. A few business firms began to grant vacations to some of their salaried employees more than 100 years ago, and by 1900 a large minoritythough still a minority-of the white-collar workers in private industry were entitled to annual vacations. It was not until approximately 1910, however, that a few pioneering firms extended the vacation benefit to a handful of long-service blue collar workers.3 This statement is generally applicable throughout the private sector of the American economy. For Federal civil servants, however, the postwar movement was against the mainstream. Before 1951, classified employees of the Federal Government were entitled to a standard annual leave of 26 days. But in 1951 the Congress enacted legislation restricting annual leave to 13 days for employees with less than 3 years' service and 20 days for those with 3 but less than 15 years. Only those with 15 or more years of service were left entitled to the traditional 26-day vacation. This 1951 law, coupled with the rapid liberalization of vacation provisions in private industry, has greatly reduced the differential advantage of Federal employment with respect to the vacation fringe benefit. Allen, Donna, "Fringe Benefits: Wages or Social Obligation?" Cornell University Press, 1964, pp. 42, 75-202-67—2 |