Compulsory Vacation: Reducing the Human Ecological Footprint Through More Annual Leave

Compulsory Vacation: Reducing the Human Ecological Footprint Through More Annual Leave

Compulsory Vacation: Reducing the Human Ecological Footprint Through More Annual Leave

by Jorgen Randers

Jørgen Randers (Norwegian, born 1945) is Norwegian and a professor of climate strategy at BI Norwegian Business School. He has divided his long professional career evenly among the research, NGO, and corporate worlds, always with a focus on sustainable development. He coauthored The Limits to Growth in 1972.

 Many environmentalists worry about continuing growth in the rich world. More specifically, they worry about the continuing growth in the production of goods and services – because of the concomitant increase in the ecological footprint. They worry that growth in GDP will increase the amount of resources used – and the amount of pollution generated – beyond what the world can handle in a sustainable manner. Their dream is to reduce the ‘ecological footprint’ per person – ideally without lowering general wellbeing.

Most voters do not agree; they argue that continued growth is necessary and desirable for many reasons: to increase income, to avoid unemployment, and to fund pensions for the rising number of old. These objectives, they argue, are more important than lowering the ecological footprint. For the time being the pro-growth group carries the floor, even in the rich world.

But what if a rich nation, contrary to expectation, did decide to reduce its ecological footprint? Could it be done? I believe it could, and that the simplest method would be to increase the amount of annual vacation: adding several extra vacation days every year, for all citizens, and through legislation that requires people to take more time off. Let me explain.

The total annual production of a nation (GDP) can be seen as its number of workers multiplied with the output per worker per year. The output per worker per year can be seen as the number of hours worked per year multiplied with his/her output per hour. So, by reducing the average number of hours worked per person per year, one can achieve a reduction in the GDP (relative to what it would otherwise have been) – and, ultimately, a reduction in the footprint. In summary: more vacation, less time at work, lower production, less footprint.

Would it really work? Yes, if voters really supported the idea. The simplest proof is that many rich countries did already systematically shorten the work year – with success. From 1970 to 2005, labor productivity in Norway increased by around 3 % per year on average. During the same period, incomes rose by around 2 % per year. The rest – about 1 % per year – was taken as increased leisure. The number of hours per year in a ‘full time’ job decreased from around 1,800 to 1,400 hours per year (see Figure appended). If Norwegians as an alternative had followed the US model, and kept hours long and annual leave at the traditional minimum, their annual incomes would have been 1.3 times higher than they are. But Norway chose differently, and Norwegians do not believe they would have been happier with more money and less leisure.

Similarly, labour unions in Denmark were once asked to choose between a) 3% increase in the annual wage for the ensuing year, and b) 0% increase in the annual wage, but 3% fewer workdays. They overwhelmingly voted for the latter. Rather than asking for more money, the Danes asked for more leisure. Which makes a lot of sense in a rich country (but does not make sense in a poor country where the prime need is for more production – goods and services). Notice that the wage per hour worked stayed the same in the Danish case.

Note that more ‘compulsory vacation’ might not lower the ecological footprint even if adopted as national legislation. Employers might choose to compensate for the reduction in hours worked per person by hiring more persons. This would work as long as there was a pool of unemployed to draw from. In this case more ‘compulsory vacation’ simply would distribute the available work among more people. More people would have a job, but on average working fewer hours per year. This would be good for employment, for distributional equity, and (probably) for wellbeing. But it would not have the intended effect of lowering the GDP and the ecological footprint.

Increasing the amount of ‘compulsory vacation’ is equivalent to reducing the maximum allowable hours of paid work per person per year. Thus another way to introduce more ‘compulsory vacation’ would be to pass legislation that limits the number of hours of paid work that anyone can have during a year. But this may be less realistic, since the voter may perceive a limit on the number of hours of paid work per year as an unwelcome restriction of freedom. The voter is more likely to accept legislation that provides more time off while maintaining his/her annual salary. I believe legislation that increases the number of vacation days has a fair chance of being passed in the rich world.

Longer annual leave means that more shifts will be needed to fill a 24/7 job – or in other words more irregular work patterns. But these are administrative problems that could be solved if one really wanted to increase the amount of leisure. And there could be control problems – people working even if they were supposed to be vacationing – in countries with imperfect systems for tracking worker income (normally for taxation purposes).

If the ambition were to keep the GDP constant, the length of the work year would have to be reduced at the same pace as the rate of productivity growth. And if the work force was growing, the work year would need to be cut even faster. A numerical example is useful. If productivity growth in the rich world stays around 1% per year, and population growth around the same, the length of the work year would have to be lowered by 2% per year to keep the GDP constant. This would amount to some 32 hours per year or 4 days of increased vacation every year. That is quite a bit!

If the GDP were held constant in real terms, the ecological footprint would most likely decline, due to continued technological advance (for example continued reduction in the use of energy and resources per unit of GDP). If the footprint were to be cut faster, one would simply increase the amount of ‘compulsory vacation’ given per year.

What would people do if they were forced to reduce the amount of paid work? What would people in the rich world do if they had to spend more time away from the office? I believe they would be doing all those things they currently dream about doing: more time with the family, more hobbies, more pleasure. And when the amount of leisure got even longer, they would start doing themselves what they currently pay other people to do: cooking food, maintaining their home, and providing care. And if this structural shift got so far as to generate unemployment in the restaurant, maintenance and care sectors, this could be handled by further increases in the amount of compulsory vacation. The limited amount of available (paid) work would be split evenly among the citizens. Instead of having some people unemployed, all would be having longer vacations.

I doubt that compulsory vacation will ever be introduced in order to reduce the ecological footprint. But the policy of more compulsory vacation might be adopted in the rich world for a completely different reason. Shortening the work year serves to split the available work among more workers. Hence compulsory vacation may be seen as the best solution to another problem that is going to bother the industrialized world over the next several decades: namely rising unemployment caused by slow GDP growth.

Figure 1: Hours of paid work per employee per year in US (top), Germany (middle) and Norway (bottom): 1970-2005

jorgengraph

Source: OECD; via Norges Bank 2006