New York City Mayor Bill de Blasio today proposed a plan requiring private employers to provide their workers with 10 days per year of paid vacation.
The proposal would benefit hundreds of thousands of full- and part-time employees who don't have access to paid time off (PTO), de Blasio's office claims. If the plan is approved by the New York City Council, all private businesses with five or more workers would need to offer their workers two weeks of vacation time.
"New Yorkers need a break," de Blasio said today from City Hall. "If you work hard and you don't get a break, that's not fair."
The proposal is the first of its kind in the United States, according to The New York Times. De Blasio's office specifically highlighted the 470,000 combined employees in the city's professional services, retail, hotel, and food industries who don't get paid vacation.
"It's bad for your physical health. It's bad for your mental health," the mayor said. "It's no way to live."
Under the plan, workers would be able to take time off for any reason once they've been employed for 120 days. Companies would be allowed to require that employees give two weeks' notice before taking time off, or deny PTO requests if too many workers are taking off at the same time.
It doesn't sound like employees could automatically take 10 days of PTO after 120 days of employment. According to The Washington Post, workers would accrue their PTO gradually over the course of their employment.
The proposal probably has a decent chance of passing. The city council is dominated by Democrats, and judging from some of their reactions in de Blasio's press statement, a good number already appear to support the proposal.
But support is far from universal. "Everyone wants employees to have a fair amount of vacation time, but one-size-fits-all government mandates tend to make it harder to hire, grow businesses and create jobs," Michael Steel, a Republican strategist who used to work for former House Speaker John Boehner (R–Ohio), told the Post. "This sounds like that's what this would do."
Kathryn Wylde, president and CEO of the Partnership for New York City, a local business group, agrees. She called the plan "another example of municipal overreach into the city's private sector economy."
"Most New York City employers are doing whatever they can to attract and keep good workers and do not need the government dictating their benefit policies," Wylde said in a statement. Many of the businesses that would be affected, she said, "are struggling retailers, who are facing rising rents and online competition."
Steel and Wylde bring up fair points. If private employers believe offering their workers paid vacation time will increase productivity, morale, or profits, then they will. Most businesses already do this, with the Bureau of Labor Statistics reporting that 76 percent of private industry workers had access to PTO as of March 2017.
The problem is that PTO doesn't make sense for every business.
"When policymakers like de Blasio mandate benefits, it results in a reduction in salary/wages, or other employee benefits for employees," says Vanessa Brown Calder, a policy analyst at the Cato Institute who specializes in social welfare, housing, and urban policy. "That is because employers are interested in limiting total costs (compensation) for a given productivity level," Calder told Reason in an email.
If private employers are forced by the government to offer those benefits, then they may decide to cut wages as a result. But let's say workers at any particular company make $15 an hour (which is the minimum wage for business in NYC with 11 or more employees): Their wages can't legally be cut any more. In order to make ends meet, the business may end up cutting hours or even laying off some employees.
Mandatory benefit proposals essentially tell workers and companies what kind of compensation packages are acceptable. In reality, some workers would gladly trade higher pay for more time off. "However, not all employees would," notes Calder. "When policymakers like De Blasio mandate benefits, it (counterintuitively) reduces employees choices."
There are other reasons why de Blasio's plan isn't a good idea. "Mandates that make employees more expensive offer less incentive for businesses to hire more and more highly skilled employees (that's bad news for lower-wage workers)," wrote Independent Women's Forum Carrie Lucas in a July 2017 piece for Reason. "A government one-size-fits-all paid leave program would also discourage voluntary alternative work arrangements like job-sharing and telecommuting that benefit employers and employees."
Lucas was specifically referring to proposals that provide new parents with paid leave. But it's the same idea. Paid family leave and paid vacation time are both great policies when employers decide to implement them. But forcing such policies on businesses and their workers can, often does, and likely will have unintended consequences.
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