I don't think I see a single negative comment here about long vacations, so allow me to play devil's advocate. (These questions don't necessarily reflect my own opinions.)
1. If this is such a free lunch (employees are both happier and more productive overall), then why isn't lots of vacation offered everywhere (in the US)? Can it really be the case that the vast majority of US companies are too short-sighted to make a policy change that would be in their own best interest?
2. If, alternatively, more vacation is really good for employees, but slightly bad for employers, why doesn't the labor market adjust? In this case, you would expect employees to offer to work for a lower salary in exchange for more vacation time.
> Can it really be the case that the vast majority of US companies are too short-sighted to make a policy change that would be in their own best interest?
You can ask that about anything. Are the U.S. banks really so short-sighted to offer absolutely crap person-to-person transfers and get undercut by any number of hacky startups? Were the U.S. car manufacturers really so stupid? Are California taxpayers really too short-sighted to realize how Prop 13 hurts the state? The entire federal administration in lead-up to the Iraq invasion? Etc, etc
I don't disagree that bad decisions are made all of the time, but the questions is how the same bad decision can be made everywhere in a competitive marketplace. You've given a couple of good examples where the answer is government: banking is highly regulated, so breaking into the industry is tough, and the big U.S. auto companies actually would have gone out of business and been replaced without a bailout.
But if increasing vacation time makes your employees happier and you also get more productive work out of them, why don't the companies that switch then get all of the best employees and eat the lunch of everyone else? I can't think of any regulations that make it more significantly more expensive to offer lots of vacation, so I don't think government is the answer in this case.
I think the biggest clue is given in the original post: people (Americans) won't take vacation even when you offer it to them! In that case, offering more vacation is doubly bad for the company: you still pay your employees for the vacation time, but they don't actually take it, and lose the productivity benefits. Either this is because Americans actually rationally prefer higher salaries to more vacation, and the system is working, or they systematically underestimate how much good a vacation would do them, in which case we need things like mandatory minimum vacation policies or laws.
> But if increasing vacation time makes your employees happier and you also get more productive work out of them, why don't the companies that switch then get all of the best employees and eat the lunch of everyone else?
Because marketplaces aren't as competitive as you think they are. An advantage in one factor isn't sufficient to decisively kill off a competitor.
To give an example: Do you think one could find ten people who could each do a better job than your local muffler shop? Do you think one could find ten people who could each create a company that would eventually do a better job than IBM? Than Yahoo? Than Facebook? Then why does IBM still exist?
How come, in a competitive marketplace, corporations still make decisions based on where the CEO lives and who the executives play golf with?
That's not really a rebuttal. Sure, maybe we can ask that question about those things too. Why not? Are you expecting everyone's political opinions to mesh with yours so closely that we'll all agree if a theory seems to contradict them, it must obviously invalidate the theory?
> That's not really a rebuttal. Sure, maybe we can ask that question about those things too. Why not?
I gave my questions as examples of large groups behaving unoptimally. That happens all the time everywhere, so using the "well why hasn't the market sorted it out then" argument against any one question (vacation policy in this case) is a little naive.
> Are you expecting everyone's political opinions to mesh with yours so closely that we'll all agree if a theory seems to contradict them, it must obviously invalidate the theory?
I don't see where politics come into this unless you think Prop 13 is good for Californians or that U.S.'s nation-building in Iraq went swimmingly.
1. Simply, yes. Read up on Deming. US companies are not a bastion of efficiency and never have been. They innovate when there is massive competition, that's it.
True. If you can't tell how "hard-working" someone is from an interview, you might end up using "willing to work with less vacation" as a crude filter.
This is probably part of the answer to the whole question. In a world where you could measure every employee's productivity accurately, there's no need to keep track of how much vacation someone takes. In the real world, people end up using "time spent in the office" as a proxy, however weakly that might be correlated with actual productivity.
1. If this is such a free lunch (employees are both happier and more productive overall), then why isn't lots of vacation offered everywhere (in the US)? Can it really be the case that the vast majority of US companies are too short-sighted to make a policy change that would be in their own best interest?
2. If, alternatively, more vacation is really good for employees, but slightly bad for employers, why doesn't the labor market adjust? In this case, you would expect employees to offer to work for a lower salary in exchange for more vacation time.