Unused Paid Time Off Harms US Economy: Study

The United States may be the “Land of the Free,” but it’s the only nation in the developed world that does not guarantee its citizens paid vacation or holidays. If you’re a born-and-bred American, you might already know that. What you may not realize, however, is that your compatriots on the far side of the Atlantic enjoy, on average, one month of paid time off each year.

Those facts alone may be enough to spur some European envy, but here’s the (somewhat disparaging) kicker: Despite an intrinsic understanding that using the leave they’ve earned delivers considerable personal and professional benefits, Americans who do receive paid time off don’t even use all of it.

In fact, according to a study out this week conducted by Oxford Economics for the U.S. Travel Association, the average American worker left 3.2 days on the table last year, totaling a staggering 429 million days among U.S. workers.

"Despite the myriad benefits of taking time off, American workers succumb to various pressures -- some self-imposed and some from management -- to not take the time off to which they are entitled," explained Adam Sacks, president of the Tourism Economics division of Oxford Economics. "Leaving earned days on the table harms, not helps, employers by creating a less productive and less loyal employee.”

The new study revealed that most managers recognize the benefits of taking leave, namely higher productivity (taking time off helps employees to reboot, as it were, making them more productive when they return), stronger workplace morale and greater employee retention. Yet, what managers believe and employees perceive is not always in harmony.

More than one third of the 971 employees surveyed in the study indicated that their employer neither encouraged nor discouraged leave, while 40 percent said their employer supported time off, but their heavy workload kept them from using earned days. Nearly a fifth of all managers, meanwhile, said they considered employees who took all of their leave to be less dedicated.

“It is a misconception that employers are ahead of the game when workers don't use the time they've earned,” Sacks noted. “In fact, stockpiled time off creates considerable financial liability for companies and governments when employees ‘cash out' upon departure.”

The U.S. Travel Association believes that if American workers used all of their available paid time off, the economy would actually benefit to the tune of $160 billion in total business sales and $21 billion in tax revenues -- spending that would support 1.2 million jobs in industries ranging from retail to manufacturing and transport.

Even if employees took just one additional day of earned leave each year, U.S. Travel said the economy would benefit from more than $73 billion in total impact.

“Underutilized time off is a monstrous missed opportunity, not only for American workers and their families, but also for employers and the broader economy,” explained Roger Dow, president and CEO of the U.S. Travel Association. “Americans take great pride in their work ethic, and our country's prosperity is a testament to that. ... We seem to be wired to put the pedal to the metal, but there are also undeniable benefits to tapping the brakes.”

A separate study released last year by travel search engine Expedia.com found that Americans have a complicated view of taking time off, often thinking of it as a guilty pleasure rather than a worker’s right.

The Vacation Deprivation study revealed that Americans take much shorter vacations than their global counterparts, signaling further unease about staying away from the work desk too long. Thirty-two percent of those surveyed said they had never once taken a holiday of more than seven days, while 71 percent had never taken one more than 14 days.

Yet a full 85 percent reported that they “need a vacation right now.” John Morrey, vice president and general manager of Expedia, noted in the report that “no one retires wishing they'd spent more time at their desk.”