
Why the Cure for a Sluggish Economy Is Actually Longer Vacations - lujim
http://www.cepr.net/publications/op-eds-columns/why-the-cure-for-a-sluggish-economy-is-actually-longer-vacations
======
sageabilly
"The story of secular stagnation is that we have too little demand to keep the
economy and the workforce fully employed."

The standing assumption here is that it is obviously Right and Good for
everyone to have a job and work and that the Government must, at all costs, do
everything in its power to create jobs so that everyone can work. However, not
everyone wants to do traditional work- some want to be caretakers to their
family, some want to pursue alternative lifestyles such as homesteading, and
yeah some just want to be supremely lazy. Assuming that it is always
ultimately Right and Good to have jobs for everyone regardless of inclination
and ability leads to crazy finagling to "create" jobs and to never even
consider eliminating jobs by any means (such as dismantling Government
agencies that have been shown to be completely useless _cough cough_ TSA
_cough cough_ ).

Personally, I think having a base income for everyone in the US would boost
the economy way more than job creation and assuming everyone should work.
Eliminating homelessness, poverty, and hunger would ensure that every person
in society lived at a high basic level of existence and would free up time,
effort, and money that is currently tied up in serving the poor, hungry, and
homeless. However, I cannot see that ever becoming a reality in the US so the
point is probably moot.

~~~
dibujante
A basic level of income is just cutting out the middleman. "Make work" jobs
are just a moral fig leaf that governments put on top of basic income because
an unconditional basic income inevitably causes an uproar. "Why, I got a
degree that interested me and am working a job I enjoy and making a lot of
money, but that guy? He gets a trifling amount of money a year just to sit on
his ass! Why, the indignity!"

Most economists agree that directly handing money to people is completely
effective economic policy. For cultural reasons, though, we have the fig leaf.

~~~
hodwik
Most things we need people to do are not enjoyable. There has to be a way to
get people to do the work that sucks.

The two methods we have found are physical coercion or financial coercion.

~~~
dibujante
Yep. I'm a software engineer and like it, but you could pay me enough money to
clean latrines instead. Minimum income probably will raise the price of shitty
jobs. This will probably just speed up automation, but no one wanted those
jobs anyways.

~~~
hodwik
I think you have it backwards.

If all jobs got roughly the same remuneration, most people would take the easy
fun job, as much as they claim otherwise.

People don't leave their jobs as parking lot attendants because they're not
challenged. They leave because they want to buy a new TV, a car, and some fly
threads.

If I could make as much reading all day in a little box, occasionally handing
people their change, as I do in tech, I'm going to that parking lot.

It's not the blue-collar jobs you'd have trouble filling. It's the lawyers,
doctors, accountants, and so forth.

Outside of the hobby careers (like tech, architect, etc.), most white-collar
jobs suck terribly.

~~~
JamesBarney
We have a glut of lawyers already. Many people who have a law degree currently
don't practices because there are more people who want to be lawyers then
positions.

Doctors we won't have a problem with because supply of doctors could drop
significantly and medical schools would still be full.

Most accountants I know like accounting, and would not quite their job in
order to make 10k to sit on their butt.

I also think your view of being a minimum wage worker is very idealized one.

Having worked many minimum wage jobs in college I can tell you I would require
a significant raise to work any of them again. Being constantly screamed and
cursed at by middle managers, standing for 8 hours straight without a break,
not knowing what your schedule looks like in a week, working until midnight,
occasionally working 12 hour shifts. No thank you. I would much rather write
software, do accounting, or be a doctor.

People don't work shitty jobs because it's easy they work shitty jobs because
they didn't hired for a better one.

------
rrggrr
This is maddeningly wrong. Case in point: The US Small Business Administration
approved $19b in loans to small business in 2014, or less than half what the
Obama Administration loaned just one company - General Motors.

This is less than 1% of the increase in US depository institution (Bank)
excess reserves since 2011.

The SBA 2014 amounts are only half what the US provides in foreign aid to
other countries.

It represents only .25% of the total value of QE2.

The US can only claim it is serious about economic recovery when it redirects
its misguided intervention into its economy, to the sector that creates the
most jobs and individual wealth - small business. Until then all the liquidity
the USGOV and Fed has and continues to manufacture will be sequestered in
large company balance sheets, in offshore tax havens, and on bank balance
sheets typically on deposit at the Fed.

Insanity.

------
pluckytree
I thought they were going to present a case that vacation increases overall
employee productivity over the long run, which would have been a lot more
interesting. I’d rather see more research into productivity and vacation as
well as more education so companies realize they can get more bang for the
buck just by changing how they treat employee downtime.

Having government come in and force companies to pay more in wages overall
doesn’t seem like the best idea. Many companies, especially young companies
struggle to keep their head above water and even small changes in wages can
push them into closing up shop. There is no discussion in this article about
any potential negative consquences. Magically, we’ll increase every company’s
expenses and they will hire more people and no company will fold because of
it. This is not a realistic scenario they are presenting.

~~~
briandear
The productivity aspect is most interesting to me. Otherwise it's a financial
loss as increased vacation raises costs; the work still has to be done. If the
productivity gain offsets the cost, then it's definitely an idea to explore.

~~~
guard-of-terra
Financial loss to whom?

Productivity is not just what people do. It's mostly about the economical
environment around them. Same number of similarly-capable people will have one
productivity in SV, other productivity in China, entirely third one in Kenya.

There all "kinds" of work around us. Maybe you get access to better work that
far outweights the tiny decrease of time you dedicate to it.

------
bunnymancer
Give people more time to invest in things they'll have to spend money on and
they will spend more money?

Who'd have thunk.

Not gonna buy a boat for 10 vacation days total per year.. Why would I?

25 days on the other hand.. That's a solid three extra weeks of boating. Might
buy a boat.

~~~
briandear
Who pays for that vacation? France has very generous vacation and their
economy is stagnant. They even have a 35 hour workweek established based in
the same premise. It hasn't worked. The economy is growing less than under
Sarkozy.

We could also make the argument that cutting taxes would spur more spending.
If you increase my disposable income, I'll buy some new studio monitors and an
Allen & Heath mixer.

Just increasing vacation time results in a higher labor cost and thus raises
prices, negating the benefit.

~~~
a_c_s
France's 'standard of living' (measured in material goods) is quite high
globally-speaking and not significantly lower than that of the USA.

If you include intangibles like quality healthcare and reasonable amounts of
vacation time, then I'd argue that France is far wealthier than the US.

------
keenerd
Offtopic, but what is the CSS trick they are using to handle zoom? I've got JS
disabled and when I zoom the page the spammy sidebars vanish. I am not
familiar with this and it references 18 CSS files, making it tedious to dig
through the source.

~~~
ThrustVectoring
Chrome's inspect element found a `.span2.hidden-phone.hidden-table` element,
which is styled with a media query from a CSS file called `bootstrap-
responsive.css`.

~~~
keenerd
Thanks, that made it much easier to drill down. Specifically there is

    
    
        @media (max-width: 701px) { ... }
        @media (min-width: 700px) and (max-width: 1100px) { ... }
    

And that toggles the visibility of some classes. I didn't realize CSS3
supported that sort of logic. Guess I shouldn't have been surprised given the
Turing Completeness proof...

------
roymurdock
This is wrong. Here is the author's main point:

 _Policies aimed at shortening work hours can have a dramatic impact on
imbalance of supply and demand. If the amount of vacation time is increased an
average of one week a year, this amounts to a two percent reduction in supply
of labor._

Government-mandated longer vacations are not actually reducing the supply of
labor. It doesn't make people disappear. It just makes them work harder for
the rest of the year to make up for the extra week of vacation. Combine that
with stagnant demand (no rises in income = less consumption and also less tax
money = less govt spending) and you haven't solved anything.

The real cure for a sluggish economy is a large-scale, man-fought war (barring
any kind of nuclear event). War simultaneously boosts demand as the government
ramps up spend across a bevy of sectors (industrial, aerospace, medical, food,
science, tech) and the labor force decreases for obvious reasons.

Longer vacation is a much nicer and more politically correct thesis though.

~~~
jpapon
This is obviously not true for the majority of jobs. You can't work harder to
make up for your vacation when the job requires your presence (eg waiter,
policeman, etc...).

Even for people who _could_ work harder to make up for lost time, I don't
agree with the assumption that they would. Remember, everyone has that
vacation time, and is required to take it. There's no need to work harder to
make up for it.

~~~
roymurdock
See my response to karlmdavis - my original comment was poorly phrased.

I'm assuming they would work harder not because they were happy and motivated
by getting a longer vacation, but because the firm might go out and hire
someone who _would_ put in the extra work due to the oversupply of labor and
the undersupply (and shrinking due to automation, mismatched skills) of jobs.

------
clock_tower
What about adjusting employee exempt status for inflation? At present, if
you're paid a salary of more than $23,660 per year, your employer isn't
required to pay overtime; raising this to a sane figure ($70,000?) would
create a lot of jobs and improve quality of life for employees; I think there
was a discussion of this on HN last year.

~~~
dragonwriter
> What about adjusting employee exempt status for inflation? At present, if
> you're paid a salary of more than $23,660 per year, your employer isn't
> required to pay overtime;

That's only true in certain exemptions, such as the computer-related
occupation exemption and the executive/administrative/professional exemption.
FLSA exemptions have either both a kind-of-work and pay qualification (as for
the computer occupations exemption), or just a kind-of-work qualification (as
in the motor carrier exemption), none have just a pay qualification.

> raising this to a sane figure ($70,000?) would create a lot of jobs and
> improve quality of life for employees

Alternatively, it would _eliminate_ a lot of the jobs in the covered areas
that are currently paid less than the new threshold. (I tend to think it would
be a net win overall, but it wouldn't be one sided in its effects.)

~~~
clock_tower
I hadn't known about the kind-of-work exemption -- although some things I've
read pointed out the "executive" issue relating to classifications of
managers.

As for whether it would eliminate or increase number of jobs of a given type,
that depends on how many companies could afford to pay their employees better
while still having sustainable business models; I'm not equipped to say how
many would.

------
shaftoe
So, instead of increasing demand we decrease supply by having people work and
thus produce less?

Simplifying that, we will gain more by producing less?

~~~
dibujante
No, this is basically just a way of increasing headcount without increasing
production.

They're basically arguing that e.g. instead of 10 workers producing 10
widgets, you have 12 workers produce 10 widgets with each of them taking more
vacation. Labour costs go up, some more wealth gets shifted back to labour,
and this increases aggregate demand without changing supply.

~~~
AnimalMuppet
But it _never_ works like that. If I have a company, I'll hire as many people
as can produce more for me than they cost me. If you reduce the amount they
can produce, that means that _I will hire fewer people_ \- not because I'm
evil and manipulative, but because that's the way the economics works out for
me, the employer.

~~~
maxxxxx
If they still produce more than they cost you, then you should hire more
people. There certainly is a threshold where people become too expensive but
the questions is when this is reached. looking at sky high corporate profits
these days I think people produce much more more value than they are being
paid.

