Unworked Pay (The Opposite of Unpaid Work)

I felt a little guilty accepting that first vacation paycheck, from Bear Stearns in 1989. I had never been paid for not working before. Should I have been working that week? Should I make up the time? Of course not; Bear Stearns wasn't looking at my hourly output as a financial analyst--they looked at my salary and benefits package as a fixed cost spread over the course of a year.

Hourly workers in union jobs enjoy this privilege of "unworked pay". Their employers pay holidays, vacations, sick days, and personal days so workers can enjoy themselves without feeling pressure to earn. Most hourly nonunion jobs do not offer all of these perks, and most part time jobs or sweatshops offer none. At a union shop, this privilege is sacred. Health contributions skyrocket, pensions disappear, wages and hours shrink--but not get paid for Christmas? Never.

The privilege is so sacred at union shops that its cost tends to disappear from all sorts of analyses:
• Engineers who calculate the labor cost of a product
• Employees who leave for "higher paying" jobs that don't offer unworked pay
• Labor activists who only look at "Gross Wage" when deciding if an employer pays a living wage
• Productivity consultants who determine "standard allowed minutes" with a stopwatch without considering paid breaks
Omitting unworked pay from these analyses can have unintended consequences. The employer paying less than a "living gross wage" but offering unworked pay can meet (and have met) living wage standards by raising their gross wages and eliminating unworked pay--penalizing only workers. A piece rate worker can never reach 100% efficiency without working through her breaks. When unworked pay is not factored into the labor cost of a product, these costs come out of the company's bottom line instead of being passed through to the customer.

How big a cost is it? BIG. To put it in perspective, in our Unite Here contract, a worker with two years experience gets ten paid holidays, two weeks paid vacation, and five paid sick and personal days. That's 25 days of unworked pay. That leaves 236 weekdays. On average, 12% of every dollar spent on direct labor results in an indirect payment for unworked pay. That's more than the employer load for social security, medicare, and unemployment insurance combined, and no consultant would ever dream of omitting those expenses from a labor cost analysis.

Put another way, my company, Unionwear spends more on unworked pay in every baseball cap than it does on cotton. However, it may be a big cost, but that doesn't mean it's a big problem. Our workers deserve unworked pay, our pricing reflects the expense, and our customers don't mind paying a small premium to ensure that that their products were sewn by people who don't have to work through Christmas.