Aug 07, 2020

How Our Collective Health Impacts the Economy

You can’t achieve The American Dream without a little bit of hustle. Built into the very foundation of our country is the idea that if you work hard, harder than everyone else, you’ll be successful. More recently, that’s translated into empty-sounding platitudes plastered on walls of WeWorks or embroidered into office couch pillows, like “Hustle harder” or “No days off.” 

Hustle Culture Leaves Americans Burned Out

American workers take less time off than workers in other countries, leaving collectively 768 million vacation days on the table in 2019. 55% of American workers don’t take all of their vacation days, and when they do, they’re still plugged in. 54% of employed adults check work messages when they’re home sick, and 44% do so on vacation. 

There’s a sense of guilt for skipping a day of work, even if you’re so sick you can barely stand. Glassdoor reported that the people who stay connected on weekends, sick days, and vacations were primarily afraid of falling behind (34%), feel they’re the only one who can get the work done (30%), or feel they can never truly disconnect (21%). 

“We are seeing a push and pull situation when it comes to employees taking vacation and paid time off, in which people attempt to step away from the office for a break from work, but technology is keeping them connected with the swipe of a finger,” said Carmel Galvin, Glassdoor Chief Human Resources Officer, in a press release. “Taking a vacation [makes] employees feel behind.”

That’s probably because the average American only receives 7 sick days per year—and only 10 vacation days. 

Average number of paid vacation days by length of service or establishment size

Source: US Bureau of Labor Statistics, 2018

But the less time off Americans use, the less likely they are to fully recover, rest, and recharge, especially if they’re sick. Taking off 1 day to recharge is much better for the business and the economy than needing 2 weeks off because your body shuts down.

It’s not just impacting each individual on a microeconomic level—23% of employees report feeling burned out often or always, while 44% say they’re burned out sometimes—it impacts the health of businesses and the economy.

“Our research shows that when employees feel cared for, there is a chain reaction of positive outcomes both for employees and for companies,” Dr. Reetu Sandhu of the Limeade Institute, an employee well-being and engagement organization, told Forbes. When employees can take time off, feel supported in doing so, and have their emotional needs met, they’re more likely to be productive, do their best work, and recommend the company to other high-performers.

Poor Health Costs Employers $530B a Year

Experts estimate that the pandemic will cost the global economy up to 8% of real GDP in 2020. And businesses around the world are feeling the effects as the economy contracts, people continue to stay home, and at least in the US, the disease itself is far from under control.

But poor health impacts GDP significantly more each year, at a loss of 15% of global real GDP for premature deaths and lost productive potential. McKinsey estimates better health (meaning an increased working-age population that takes fewer longer absences and has fewer distractions) could add up to $12 trillion to global GDP in 2040. The impact of ill health isn’t necessarily just in sick days but in lost productivity, which costs companies an average of $530 billion each year

“There’s not a CEO or CFO that can placidly accept their business expending almost two-thirds of their healthcare dollars on lost productivity…we can no longer ignore the health of our workforce. These results demonstrate a need for a more holistic, integrated strategy,” said Thomas Parry, president of Integrated Benefits Institute, a think tank dedicated to understanding employee health and well-being.

Health insurance makes up 26% of nonwage compensation for employees today, and healthcare is one of the largest categories for consumer spending (8.1%) due to skyrocketing costs of care. (At least in the US, where even a basic primary care doctor’s visit can cost hundreds of dollars on some insurance plans and where healthcare prices can vary widely in the same city, at the same hospital, and for the same doctor, depending on insurance.) 

“The United States spends more than other countries without obtaining better health outcomes,” writes Ryan Nunn, Jana Parsons, and Jay Shambaugh for Brookings Institute. “60 years ago, healthcare was 5% of the US economy. At 17.7% in 2018, it was more than 3 times that.”

Investing in employee health and wellness is no longer a nice-to-have option, especially in a global pandemic. COVID-19 showed business leaders around the world that your business is only as viable as a healthy workforce—and a healthy consumer population to sell to. 

An Opportunity to Invest in Our Collective Health

The pandemic gives employers an opportunity to consider how they’re investing in the health of their employees, both by fostering a culture where it’s OK to take days off, preventing burnout and stress spiraling into longer absences, but also how to build better healthcare policies into their company investments.

Investing in wellness on a company level can really work. Johnson and Johnson proved that wellness programs saved the company $250 million on healthcare costs between 2000 and 2010, with a $2.71 return for every dollar spent from 2002 and 2008. Texas supermarket chain HEB showed that annual healthcare claims were $1,500 higher for employees who opted out of their wellness program than those who participated. And for every dollar software firm SAS Institute spent to operate an on-site health center in 2009, it generated $1.41 in health plan savings, for a total of $6.6 million in savings. 

Taken all together, it’s clear that our health and well-being translate directly to economic health. Without investing in employee healthcare—and government policies to decrease the costs of quality healthcare for all—our public health will continue to drag down GDP and economic vitality in the short term. 

About the author

Kayla Voigt
Kayla Voigt
Always in search of adventure, Kayla hails from Hopkinton, MA, the start of the Boston Marathon. You can find her at the summit of a mountain or digging in to a big bowl of pasta when she's not writing. Say hi on Instagram @klvoigt.

Comments

Quickly Compare Loan Offers from Multiple Lenders

Compare Offers
from 300+ Lenders

Applying is free and won't impact your credit
Talk to a rep at (855) 853-6346

Mon–Fri | 9am–9pm ET

Phone Icon

Give us a call
(855) 853-6346

Monday - Friday | 9am - 9pm Eastern Time