Let’s hear it for holidays

Ross Gittins says

Those who whinge about lost production on public holidays are misguided

, and readers won’t be surprised to learn that I agree. Here’s a piece I wrote before Christmas. It was planned as a leisurely holiday piece for the Fin, but the tsunami disaster gave us something more urgent to think about.

In many ways, the Christmas holidays represents the Australian economic problem in microcosm. On the one hand, we expect and look forward to a break from work. Even if we don’t take a holiday, Australians have traditionally taken it for granted that not too much will get done in December and January.

On the other hand, we spend a lot on Christmas presents and they seem to get more lavish every year. If we want to spend more, we need to work more to pay for it.

In the short run, we can bridge the gap with the trusty credit card, but that just means a lot more work to pay it off, some time in the future. It seems as if the only solution is to stop taking those long Christmas breaks and go back to work straight after New Year.

The bigger picture is that Australians collectively are consuming more, saving less and accumulating debt at an alarming rate. The full-time workers among us have managed to keep this process by working steadily longer hours, and by pushing ourselves harder. This process seems to have reached its limit, with full-time working hours stabilising or falling slightly in the last few years. On the other hand, there is an increasing chorus of calls for another round of ‘reform’, which is usually code for more and harder work.

In saying that there seems to be something going wrong here, I don’t want to launch into another sermon about crass materialism. I’m all for material abundance, and I’m confident that with improvements in technology we can, if we choose, have a higher material standard of living as well as doing more to preserve the natural environment. (Judging by Australia’s failure to ratify Kyoto, we’re not making the right collective choices at the moment, but that’s an issue for another day).

But for most of the 20th century, increasing material abundance went along with shorter working hours, longer holidays and generally improving working conditions. In the 1980s and 1990s, all of this went into reverse, with working hours getting longer and workplace stress increasing. By some measures, Australian full-time workers now work harder even than Americans, and much more than the Japanese.

At the same time, the trend towards early retirement (voluntary and involuntary) continued. One way out of this pattern is ‘downshifting’. In effect, this usually means withdrawing from the full-time workforce and getting by on a mixture of savings and odd-jobs. This is a reasonable choice for individuals, but not one that our current economic structure can make available to everybody.

As a result, the typical middle-class household lifecycle now has a couple of decades in which long hours of paid work are combined with peak responsibilities for child care, followed by a rapid winding down into an ‘empty nest’ retirement.

All of this doesn’t seem to make much sense, as Treasurer Costello and others have noticed. But calls for people to delay retirement aren’t going to have any impact in a society where career structures are predicated on pushing workers to the limit, and getting rid of those who don’t make the grade. And this structure is sustained by the fact that people’s perceived expenditure needs are such as to keep their noses to the grindstone. In this respect, the boom in housing prices, which has pushed repayments to record levels, has been at least as important a factor as growth in discretionary spending on consumer goods.

Only structural reform in the labour market is likely to produce the kinds of changes that are needed. But the reforms that are being pushed at present, such as Australian Workplace Agreements with provisions to cash out annual leave and overtime pay, are generally moving us in the wrong direction.

For most of us, especially those with school-age children, it would make a lot more sense if we could take a couple of weeks more leave each year and make it up by retiring a year or two later. There’s no easy way of organising this and until now, the bulge in the workforce produced by the baby boom has made it unnecessary.

We’re constantly being urged to aspire to ‘world’s best practice’. Australian holidays used to be the best in the world – at least it certainly seemed so. We should take a few more of them.

9 thoughts on “Let’s hear it for holidays

  1. I’m sitting here trying to think of a few high-quality exports that Australians can identify with, and be proud of. If there are some, we could afford to work away at them, flat-out, for 9 or 10 months, and then sit on the beach for six weeks. (Do the Mitsubishi Magna patrol cars in Iraq count?)
    Otherwise, if I owned a small factory in Guangdong, or was a stockbroker in London or New York, I’d be encouraging a loooong Aussie summer holiday, for the same reason the State Premiers are so keen on Kim Beazley.
    I guess my point is – the world is pretty much run from the North, so how well do we respond to service demands during our self-declared off-peak? And, do we do anything in a structural sense to pick up any slack created by the mid-year holiday season in the North? I think most Aussies do not have a clue what goes on in the rest of the world, and the trend is to care less and less, unless events intrude on our leisure, or on our glitterati.
    A listening device outside Our Nic’s domicile, for cryin’ out loud! The moans and groans would have come through loud and clear, unobscured by a background hum of industry.
    Don’t get me wrong, I wholeheartedly approve of our rampant consumerism, and I’m not in the building trade. The Australian Music Examinations Board awards Associate Diplomas. At the last ceremony, as has been typical for years, the Asian (mostly Chinese) names account for many more than their proportion in the general population would indicate. Industrious people know the value of recognisable extra-curricular qualifications. Every now and then I pay homage at a shopping mall, or a Bunnings, and reflect on how the queues at the registers translate into demand for piano teachers.
    Perhaps the solution to our obesity crisis is to encourage unionisation of the piece-workers in Bangalore and Shanghai.
    “Shanghai sharpens edge for overseas staff” at
    and you can get Xinhua in French, Russian, Spanish and Arabic. But not Hindi, Bahasa or Japanese. Isn’t that odd?

  2. For most of us, especially those with school-age children, it would make a lot more sense if we could take a couple of weeks more leave each year and make it up by retiring a year or two later. There’s no easy way of organising this and until now, the bulge in the workforce produced by the baby boom has made it unnecessary.

    We’re constantly being urged to aspire to ‘world’s best practice’. Australian holidays used to be the best in the world – at least it certainly seemed so. We should take a few more of them.

    The solution to this is for people to change their perceptions about what level of consumption is necessary.

    If we can each individually get away from the idea that every family needs a forty square McMansion, two late model vehicles (with preferably one a 4WD) and all the junk that parents give kids to make up for a lack of quality time, then people will be able to make these choices for themselves. Downshifters are the trailblazers here, and it is not just something isolated to individuals without family responsibilities.

    My father works four days a week and supports a family of six, several of my colleagues in a very high pressure financial services workplace are supporting families on three days a week, and small business people who succeed at delegating responsibility in their businesses can enjoy extremely flexible hours.

    This all said, some people’s lives are so dysfunctional that work becomes the only place they are valued, and particularly an escape from a world where family life is hell. For these people, overwork and overconsumption are the symptom not the illness, symptoms of broken families and dysfunctional communities.

  3. Guy Fawkes’ Day doesn’t commemorate his birth but his execution. But I agree with the principle – there’s no point in fireworks you can’t handle. If they’re too dangerous there’s no point in just having a display, that’s as much fun as watching someone else having a good meal.

  4. Good points from Joel Parsons, he has reinforced my suspicion that a growing number of high fliers are cutting back on consumption and working hours. Of course they have established the foundation by previous efforts and they have enough control over these things to make their own decisions.
    Inflated expectations appear to be a large part of the problem, especially with regard to lifestyle and housing.

  5. I think Im going to do late retirement. By the time I reach 65 or so Im just going to want to keep on going, because really what else am i going to do? May as well take the holidays when Im younger and have more to do and am healthy enough to do them.

  6. I recently dropped back from 5 days a week, to 4 days. My decision being that I should enjoy myself, and potentially any children, while I am youngish (30). I already earnt enough that even on 4 days I could comfortably support a family. What was the point in working harder? – I certainly don’t aspire to a McMansion, boat and pair of 4WDs, although another room for my books would be nice.

  7. I don’t think that working less than full time is going to be an option for my generation (i’m 27) who are just starting to buy houses and start families.

    Its a nice to talk about having a smaller house and not owning two cars etc, but in reality its not that simple if you’re on average incomes and live in Sydney. A cheaper house is not an option as we cannot afford a house so we bought a flat instead. Two cars are a necessity because when you buy a cheaper place you are a long way from decent public transport. I can’t understand how anyone can afford to run a big 4WD. We are not struggling and are quite comfortable, but our income pays the bills and the mortgage and not much else.

    Lowering our level of consumption is not going to allow us to downshift now any time until our children have left home and we are empty nesters as well. There is just not enough fat in our budget to make a real difference.

    More importantly, if the option for extra money does come along and it requires sacrificing free time then we always take it because we know that either of us could be out of work for an extended period of time which would mean we could not afford the mortgage. Plus when we have children we need to be ahead in the mortgage repayments anyway.

    There are options, such as running a small business, or moving somewhere cheaper, but in practice downshifting on average incomes is problematic because of high mortgage repayments and too much uncertainty about future income.

  8. The inheritance factor is significant. A generation or two ago most people came from larger families where the parents had less assets than is the case today. (Smaller families has an effect on disposable income now and assets left later). In addition some parents are making the shift of assets earlier, like when the kids are buying their first place. This must be a major factor in the price of real estate. The late Colin Simkin ran some models using income data compared with house price data and the buying capacity was about 100K short. We guessed that was at least in part the parental assistance factor. He made alloweance for two income families, he must have had data on that.

Comments are closed.