Summertime blues for some workers and businesses

August, the month best known for long hot days and summer vacations, starts tomorrow. For workers who can afford to take a week off to head to the beach or elsewhere, time away from work seems like a basic necessity. But access to paid time off, such as vacation days or paid sick days, isn’t available to all Americans. This is inequitable for many workers but it’s also bad for business.

Only 77 percent of U.S. workers have access to leave time of any sort, according to calculations by the Council of Economic Advisers, but this leave time can be unpaid. Employees have the right to take time off, but they often aren’t compensated, with only 59 percent having access to paid leave time. This means their employers will experience lower worker productivity because unpaid and especially paid leave increases worker retention, which improves long-term productivity as workers are more familiar with their jobs. And these sorts of benefits can also help increase employee morale, which also helps boost productivity.

The availability of unpaid leave is similar for employees in all occupations and earnings categories, but low-income workers have much less access to paid leave. About 70 percent of workers over the age of 25 with less than a high school education have access to unpaid leave. But only 35 percent of those workers have access to paid leave.

One kind of paid leave, vacation time, is quite unevenly distributed. As Christopher Ingraham points out at Wonkblog, how likely a worker is to get paid vacation time varies significantly depending on her occupation. Managers have very high rates of access (96 percent) while the rate for service workers is about 40 percentage points lower.

Sick days are another important source of paid leave. Paid sick days allow workers to take time off to recover from a short-term illness. While 61 percent of all workers have access to paid sick days, only 30 percent of workers in the lowest 25 percent by wages have access to this kind of leave. Because these low-income workers are disproportionately employed in service-sector jobs, a lack of paid sick days runs the risk of sick workers showing up to jobs in restaurants or care positions, infecting other employees and customers alike, resulting in lost productivity and over time poor business reputations

The federal government doesn’t require paid sick days, but about two dozen local governments have taken action on this front. San Francisco was the first locality to take action and New York City yesterday started allowing workers to use the paid sick days they earned under a new law. In San Francisco the verdict is in—one study finds increased employee morale after the bill was implemented and another found most employers reported no effect on profitability—and we can anticipate similar results in the Big Apple.

Time away from work is a given for many workers, but a significant portion of U.S. workers lack access to time off. Policies that allow for unpaid leave are a good start, but many low-income workers can’t afford to take time off without pay. Something for employers and policymakers to consider during an August vacation.