Corey Johnson’s flimsy excuse for holding up paid vacation

Speaker Corey Johnson says he's concerned about the impact paid vacation will have on small businesses.
Speaker Corey Johnson says he's concerned about the impact paid vacation will have on small businesses.
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Speaker Corey Johnson says he's concerned about the impact paid vacation will have on small businesses.

Corey Johnson’s flimsy excuse for holding up paid vacation

Studies show small businesses can afford to give workers time off.
December 11, 2019

New York City Mayor Bill de Blasio made a bold promise earlier this year: he said his city was going to become the first in the nation to ensure that all workers can take paid time off for vacation and other personal reasons, not just for sickness or to care for family members. But despite the mayor’s insistence that it get done this year, the bill isn’t going to pass anytime soon. It’s yet to get a committee vote, let alone a vote in the full City Council.

Many have laid the blame at de Blasio’s feet, arguing that his neglect of the city during his short-lived presidential campaign was the measure’s downfall. But the blame also lies with someone else: Council Speaker Corey Johnson hasn’t gotten behind the bill, saying he’s concerned about the impact it will have on small businesses that have already had to absorb a higher minimum wage and guaranteed paid sick leave. His point of view may have been bolstered by a letter sent to him recently by 11 councilmembers who argued, “No one would be more devastated by this bill’s passage than our city’s small business owners.”

Certainly the legislation would make New York a first. No other city or state in the country mandates paid personal time off or vacation. But small businesses in the city have been doing just fine with a higher wage floor and paid sick time and they can handle this new benefit, too.

The city has been increasing its minimum wage since 2014 such that now workers at large businesses must make at least $15 an hour, and smaller ones will face the same requirement starting in January. And yet a New School University study found that the city’s restaurants, typically the hardest-hit by minimum wage increases, have been “thriving” since the pay hike and while the paid sick leave law has been in place. Employment in the city’s hospitality sector outpaced nationwide job growth from 2013 to 2018, and employment at our restaurants has beaten those in many other large cities that didn’t increase their wages.

A similar gradual increase in the minimum wage has been taking place in the rest of the state: fast food workers who don’t earn tips now have to be paid at least $13.75 an hour, while everyone else is guaranteed $11.10. Comparing counties on the New York/Pennsylvania border, a state that hasn’t increased its minimum wage to that level, researchers at the Federal Reserve Bank of New York found that businesses in retail and leisure and hospitality, which are usually most impacted by a higher wage, were unaffected. Employment in leisure and hospitality increased by 5% in both places; if anything, employment actually increased more in New York. The New York Times conducted a similar analysis comparing New York to Pennsylvania and found similar results: the wage hike didn’t destroy jobs, but it did raise pay.

Small businesses will be able to withstand paid vacation time, too. For one thing, not all employees will take it at once, nor will they necessarily use all of their personal time.

And when they do take time off, there are plenty of ways that businesses can cope. When minimum wages rise, employers have many ways to compensate. Some marginally increase prices. But they also increase the efficiency and productivity of the workers they already have. They see some savings through lower turnover, as replacing workers can be quite costly.

Those last two impacts are likely to be even larger if workers are able to step away from their jobs for some paid time off and then come back reenergized. A universe of research has found that taking vacation makes workers more productive when they return. Former NASA scientists found that employees experience an 82% increase in performance after taking vacations. Ernst & Young examined its own employees and found that for each 10 hours of vacation they took, their year-end performance ratings improved 8%, and those who took more vacation stayed in their jobs longer. Employees of an industrial plant in Israel were more likely to show up to work for the four weeks after they took a vacation. Some relaxation away from work clearly does people good.

The paid time off bill would make New York unique in this country. But by failing to require paid vacation time, the United States is an international outlier. Twenty other developed countries require employers to give employees paid vacation time, ranging from 10 days in Canada and Japan to 30 in France. All European countries guarantee at least 25 days. Many also mandate paid holidays on top of that. And these countries all clearly still have businesses large and small that are able to cope with the mandate.

In the United States, about one quarter of the workforce doesn’t get any paid vacation. That pain is spread unevenly: 90% of those who earn the most do in fact get vacation, while over half of those who earn the least are left out. Access to vacation is unequal in New York, too. Most of those who would directly benefit from the paid time off law are people who work in hotels, restaurants, stores, and as cleaners, making low wages.

Mandating paid personal and vacation time won’t solve the fact that New York City and New York state have the biggest gaps between rich and poor in the country. But for a Council speaker who came to office talking about tackling inequality, it’s a good place to start. Workers not only deserve time off from work – they need it. The City Council should do the right thing and make sure all New Yorkers can get a break.

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Bryce Covert
is an independent journalist writing about the economy and is a contributor to The New York Times opinion section and The Nation.
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