President Donald Trump on Thursday called for fewer federal holidays, saying the days off cost America billions of dollars in losses.
“Too many non-working holidays in America. It is costing our Country $BILLIONS OF DOLLARS to keep all of these businesses closed,” Trump said in a Truth Social post on Juneteenth, a newly designated federal holiday commemorating the end of slavery in the United States. White House press secretary Karoline Leavitt acknowledged during a Thursday briefing with reporters that it was a federal holiday and thanked reporters for showing up, but declined to answer whether Trump was doing anything to mark it.
“The workers don’t want it either!” Trump said of federal holidays in his post. “Soon we’ll end up having a holiday for every once working day of the year. It must change if we are going to, MAKE AMERICA GREAT AGAIN!”
Is there any truth to his comments? Yes and no.
Most research around the economic impact of federal holidays deals with how worker productivity is impacted. Worker productivity measures how much workers are able to achieve over a given period of time.
A day off work, therefore, would put worker productivity at zero. But research suggests that it’s not just, say, July 4 itself that causes productivity to slump. It’s the days before and after, since workers tend to schedule time off around them, leaving employees who opted not to take those days off with heavier workloads, thus reducing their productivity.
A 2022 study by two economists found that when a federal holiday falls on a weekend and isn’t rescheduled for a weekday, the nation’s total output, or gross domestic product, increases by 0.08% to 0.2% relative to when it is rescheduled. Among the sectors that can take the biggest hit from federal holidays is manufacturing, the study found.
But that’s just in the short term. Over the longer term, paid time off, including over federal holidays, increases worker morale and can make them more productive over time.
That’s because people who work more aren’t necessarily more productive, since they are more likely to get burnt out.
Case in point: Fresh research from Microsoft found workers are struggling to cope with a “seemingly infinite workday,” involving an increasing load of meetings occurring outside traditional working hours.
One outcome is that one-third of workers feel it has been “impossible to keep up” with the pace of work over the past five years, according to a Microsoft-commissioned survey of 31,000 employees around the world, cited a Tuesday report.
Meanwhile, an older internal survey Ernst & Young conducted found that for every 10 additional hours of vacation employees took, their performance reviews increased by 8%. Furthermore, those who took time off more frequently were less likely to leave the firm.
Contrary to Trump’s comments, businesses across the economy don’t shut down entirely on federal holidays: Plenty of workers, including emergency responders, retail and transportation workers, continue to work on such days.
On the spending front, consumers tend to make more purchases on holidays, especially as businesses schedule sales around them.
Specifically, the tourism, hospitality and retail sectors tend to benefit the most.
But it’s not just big businesses — small businesses can benefit, too. A 2018 study found that bank holidays in the United Kingdom give small shops an average of an additional £253 (about $340) in profit.
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