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Thursday, November 16, 2017

Why One Company is Trading Smoke Breaks for Vacation Time

Rewarding those who don’t take smoking breaks is much more effective than punishing those who do.


Recent news out of Japan has proven, yet again, innovation and creativity stem from private individuals and businesses, not unions, and not forced government intervention.

Even under the heavy hand of the Australian government, smoking rates have begun increasing “despite plain packaging and the most expensive cigarette prices in the world.”

In Japan, a conflict between smokers and nonsmokers came to a decision point at the Japanese company Piala.

An Innovative Solution

Rather than anger one side by implementing a ban, the company made a value proposition to its employees.

Smokers faced a 29-story or 15-minute journey to smoke outside. Non-smoking employees began taking issue with the increased time smokers were on break. At Piala, smokers made up 35 percent of the company’s 120 employees, and management acknowledged these trips were not wastes of time but often used to discuss business.

Rather than anger one side by implementing a ban or punishment, the company made a value proposition to its employees. Those who smoke can continue with their breaks, but the other 65 percent who do not smoke were given an extra six days of holiday.

Looking to keep the talent they have acquired and balance customer needs, Piala found a creative solution ensuring talent was not going to leave, perhaps to a 1st-floor company.

Notably, this policy has a lot in common with the creation of shorter work weeks, eliminating child labor, and shorter work days. They are all products of a free voluntary market, not unions via government force.

Shortened work weeks are a result of increased productivity via voluntary markets. As production increased, an hour of labor began creating a considerable excess in value beyond basic sustenance. Factoring in training costs and turnover issues, skilled and even so-called “unskilled” workers acquired leverage for pay, safety, aesthetics, and leisure. Employees began valuing leisure time far more than income, resulting in time off and weekend benefits. Unions pushed legislation long after this became commonplace in the workforce.

Eliminating child labor is also a result of free voluntary markets.

It should be noted on the short work week debate, even as Australia began penalizing a seven day work week, employers began offering higher pay than the actual penalty rate, thereby incentivizing additional work. The government quickly shut that down in 1947, putting a cap on how much someone could be paid, forcing all employees to value time off the same.

The Same Thing Happened with Child Labor

Eliminating child labor is also a result of free voluntary markets. It wasn’t greedy parents that put children to work, it was the necessity of survival. Once regions industrialized and production began rising, unskilled children were pushed out of the workforce, replaced by machines and adults who were more valuable. Additional pressure grew as parents started making disposable income. The insignificant income raised from children became negligible in supporting a household.

In the United States, it wasn’t until most children were already out of the workforce, in 1930 (6.4 percent of 10-15 year-olds, with 74.5 percent of that number in agriculture), that child labor laws were passed, in 1938, in all reality only hurting the poorest in the community.

If weekend laws are the solution, I challenge a government to force a subsistence farmer to take two days off a week. After a few weeks, there won’t be any left to force.

Nearly 10 percent of Piala’s smokers decided to immediately quit smoking.

What a six-day holiday proposition shows is private business owners are finding unique ways to attract and keep talent in a competitive world that Australian businesses are competing with.

What is more striking is nearly 10 percent of Piala’s smokers decided to immediately quit smoking. Ten percent of Piala’s smokers suddenly valued six extra days of holiday rather than smoking breaks. As for the other 90 percent, smoking and the associated breaks were still considered more valuable than all their alternatives.

Government and unions could learn a thing or two from this moment. Creating a one size fits all proposal, or squelching all other values does nothing to resolve conflict and creates unintended consequences. Look no further than Australia’s prohibition for vaping. While the free market is finding solutions elsewhere, Australia has banned further innovation.

Allowing a more free and flexible environment where employers and employees can voluntarily negotiate their relationships will allow each Australian to prosper to their highest potential.

Even the unintended consequences can be more productive. If I could bet on it, it’s going to be the free market that eventually pushes the tobacco industry the way of the horse-drawn carriage industry.

Reprinted from Daily Telegraph.


  • Greg Pulscher is Development Director of the Centre for Independent Studies.