Holidays
With the extra-long weekend approaching, you might be wishing there were more public holidays in your calendar. But would that be feasible?
For most of us, public holidays mean rest, recreation and travel. But governments and economists have to view them through a different lens. These breaks halt business activity, manufacturing and exporting – putting downward pressure on a country’s GDP due to lost productivity.
To illustrate, last year the UK and other countries like Australia had an extra public holiday to mourn Queen Elizabeth II; the productivity loss almost tipped the UK into a recession, and cost Australia close to A$2b. New Zealand’s new Matariki holiday last year was also estimated to reduce the country’s GDP by almost NZ$360m. In the U.S., federal holidays cost the country approximately US$325b a year in lost output.
While public holidays can increase tourism revenue and consumer spending, not all of them create enough activity to offset productivity loss. Easter and Christmas are known to rake in billions in income, but are considered to be the outliers rather than the norm. More commonly, it goes like the AFL Grand Final holiday added to Victoria's calendar in 2015 – estimated to cause a net loss for the Australian state’s economy every year.
A study has also laid out that the sectors that gain the most from public holiday income – retail, wholesale and hospitality – only make up about 14% of a country’s GDP. Meanwhile, offices, factories and construction, which are forced to shut down, contribute around 47% of the economy.
Does this mean we’ll never get more days off? Well, on the bright side, a statistical study did show that bigger corporations have started to practise shuffling work around to minimise productivity loss. The same study also found that holidays had non-quantifiable, beneficial effects in mental health which led to higher-than-usual productivity in the days following the holiday.
The U.S., UK and Australia have ten, eight, and seven nationwide public holidays respectively, compared to the average number of 11 public holidays across 195 countries. Interestingly, it’s been found that countries with higher average incomes tend to have fewer public holidays. If you had to choose, would you prefer a higher income or more public holidays?
