Did U.S. National Soccer Coach Jurgen Klinsmann Cost U.S. Economy $50.0 Billion?
June 26 was a big day in U.S. soccer. Not just because we faced the Germans in a World Cup match that determined (in a roundabout way) whether or not we made it to the knockout round, but because Jurgen Klinsmann, the head coach of the U.S. men’s national team, gave every single employed American permission to take the day off work!
Klinsmann shared a “get-out-of-work” note initially distributed through the official U.S. Soccer Twitter feed.1 It told employers to “excuse (insert your name here) from work on Thursday, June 26th.” Yes, he acknowledged that their absence would hurt productivity, but it was for the greater good: to support the nation!
Klinsmann’s generosity didn’t end there; he also suggested managers “should act like a good leader and take the day off as well.”
His pleas did not go unheard! New York State governor Andrew Cuomo sent out his own tweet, approving an extra hour of lunch for every single New York State public employee. “The State of New York stands strongly behind Team USA. Therefore, I am approving an extra hour of extended lunch…so they can root Team USA onto victory.”2
For starters, what would it look like if every American handed in that signed note, took the day off, and cheered on Team USA from the comfort of home? Quiet, empty streets patrolled by stray dogs?
The loss in productivity would put a significant dent in the U.S. economy, for starters. And it certainly wouldn’t help the U.S. claw any of the -2.9% hit the economy took in the first quarter—the 17th-worst GDP quarterly performance in U.S. history.
What if every working American took the day off to watch the U.S. play Germany? Admittedly, I’m going to err on the side of caution and simplify things, but you’ll get the idea.
Currently, 145.81 million Americans are employed.3 The average hourly wage for production and non-supervisory employees is $20.54; that’s a daily salary of $164.32, which translates into $30.0 billion in lost wages.4 Or, if we smooth out income and use the national average wage index of $44,321.67, we arrive at $25.0 billion in lost wages.5
We can break those numbers down. Roughly 15.31 million Americans work in retail and the average hourly wage is $16.96; that equals $2.07 billion in lost wages. What about the restaurant industry? 13.7 million Americans work in the restaurant industry, and if we agree that the majority of them make minimum wage ($7.25), that translates into $795 million in lost wages.6
There’s more to taking the day off than just lost wages; we also have to consider the loss in spending. A couple quick examples: in 2014, the U.S. restaurant industry is expected to generate $683.4 billion in annual sales—that’s $1.9 billion per day.
What about transportation? Each day, U.S. drivers consume 368.51 million gallons of gas; with the average price of a gallon hovering around $3.70; that means $1.3 billion in sales is being wiped off the books today.7
Clearly, we could go on and on and on figuring out how much a day off costs in lost wages, sales, and productivity. But from where I sit, at my desk at work, taking the day off to watch the U.S. take on Germany would cost the U.S. well in excess of $50.0 billion.
What would it look like if every New York State employee took Governor Cuomo’s generous offer to watch last Thursday’s game (and really, who would decline)? According to some of the most recent government data, around 195,500 public sector employees are under the financial control of the governor.8 In total, the salaries and benefits of state employees add up to roughly $18.5 billion, or one-fifth of New York’s operating budget.9
That breaks down to an average $45.50 per hour (remember, this is salary and benefits). And if we multiply $45.50 times 195,500 employees, we discover that New York State taxpayers subsidized public employees to the tune of $9.0 million to watch the soccer game.
That was a fun, but expensive soccer game.
Will U.S. soccer coach Jurgen Klinsmann give employed American’s a “get-out-of-work-free” note for their next game against Belgium? And will Governor Cuomo (and others) pick up the torch?
1. U.S. Soccer, Twitter post, June 24, 2014, 3:30 p.m.; https://twitter.com/ussoccer/status/481927467268313088/photo/1
2 Andrew Cuomo, Twitter post, June 25, 8:49 a.m.; https://twitter.com/NYGovCuomo/status/482189016385613824
3. “Civilian Employment,” Federal Reserve Bank of St. Louis web site; https://research.stlouisfed.org/fred2/series/CE16OV, last accessed June 26, 2014.
4. “Average Hourly Earnings of Production and Nonsupervisory Employees: Total Private,” Federal Reserve Bank of St. Louis web site; https://research.stlouisfed.org/fred2/series/AHETPI, last accessed June 26, 2014.
5. “National Average Wage Index,” U.S. Social Security web site; https://www.ssa.gov/oact/cola/AWI.html, last accessed June 26, 2014.
6. “2014 Facts at a Glance,” National Restaurant Association web site; https://www.restaurant.org/News-Research/Research/Facts-at-a-Glance, last accessed June 26, 2014.
7. “How much gasoline does the United States consume?” U.S. Energy Information Administration web site, May 13, 2014; https://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10.
8. “Frequently Asked Questions,” New York State web site, May 1, 2014; www.goer.ny.gov/GOER_Information/FAQs.cfm.
9. “State Workers and N.Y.’s Fiscal Crisis,” The New York Times, March 5, 2011; www.nytimes.com/2011/03/06/opinion/06sun1.html?pagewanted=all.
Tags: U.S. economy