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Brooks Wilson's Economics Blog: Legislating Vacations

Thursday, May 21, 2009

Legislating Vacations

HT Drudge)  From Politico's Erika Lovely ("Alan Grayson to introduce Paid Vacation Act," May 21, 2009),
Rep. Alan Grayson was standing in the middle of Disney World when it hit him: What Americans really need is a week of paid vacation.

So on Thursday, the Florida [representative][1] will introduce the Paid Vacation Act — legislation that would be the first to make paid vacation time a requirement under federal law.
The bill would require companies with more than 100 employees to offer a week of paid vacation for both full-time and part-time employees after they’ve put in a year on the job. Three years after the effective date of the law, those same companies would be required to provide two weeks of paid vacation, and companies with 50 or more employees would have to provide one week.

The idea: More vacation will stimulate the economy through fewer sick days, better productivity and happier employees.
Oft sited on this blog are Bryan Caplan's four biases about economics held by Americans ("The Myth of the Rational Voter," Princeton University Press 2007).  The pertinent bias in this post is antimarket bias, the tendency to underestimate the value of the market mechanism.  In the case of vacations, perhaps the public believes that firms have an unfair advantage in negotiating employment contracts.  Caplan sagaciously observes, 
Merriam-Webster's Collegiate Dictionary defines a demagogue as "a leader who makes use of popular prejudices and false claims and promises in order to gain power."  Put bluntly, rule by demagogues is not an aberration.  It is the natural condition of democracy.  Demagoguery is the winning strategy as long as the electorate is prejudiced and credulous.
[1]  Reference to political parties changed to a neutral term.

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