Would You Take A 20% Pay Cut For 20% Of The Year Off?

My favorite question to people is this: Would you take a 20% pay cut to have 20% of the year off?  It’s a great question to see where someone’s priorities are, how they are thinking, and just how trapped in the job culture they are.

I’m strongly against our job culture.  We sell this way of life that is unsustainable and turns everyone into a cog in the machine to constantly be busy selling our time for money that we then spend on distractions from working the jobs we hate.  We spend 13 to 17 years in further education followed by 40 to 50 years in the workforce with an average of 3 weeks off each year, and this is across 2 people in a dual earner household.  With the average person retiring at 63 and living until 78, we only have 15 years of time to enjoy.   At this point children are all grown, heck the grandchildren might be grown, and we can’t do as much as we could before.

I strongly believe that having more time off is necessary.  The basis of my argument is actually that most of us are doing Capitalism wrong.  We are selling our time for money, then spending the money on stuff and lifestyle.  The goal of capitalism should be to transition from selling our time for money into having our money buy us time.  We get so busy in the work of our job and in the comfort of our entertainment that we don’t question this system and build an alternative life.


The Deal 20% Pay Cut For 20% of The Year Off:

For the average person working in corporate America, they get paid a salary, or set hourly rate and have an average of 3 weeks of vacation.  1 week is roughly 2% of the year.  20% of the year is around 10 weeks. We will use an example of someone who earns $50,000 a year.

  • Now: Earns $50,000 per year 3 weeks off.
  • With Offer: Earns $40,000 per year 13 weeks off.

For this person this could be a difficult ask.  Most people in this earning bracket are living pay check to paycheck, or close to it.  It’s not easy to live off of $50,000 per year, it is certainly not easy to live off of $40,000 per year.  Likely this would require tighter budgeting, getting a room mate, and possibly moving down in vehicle.


What about for a high earner?

  • Now Earns $240,000 per year with 3 weeks off
  • With Offer: Earns $200,000 per year with 13 weeks off

For high earners this is a much easier deal to make.  Their base expenses shouldn’t be a factor, because $200K is fairly easy for most to live off of.  They are in a higher tax bracket so even though it’s a 20% pay cut, rather than being a 20% net pay cut its a 10% net pay cut.

Someone who earns $240,000 a year and nets $180,000 a year who would earn $200,000 a year and net $170,000 a year, and wouldn’t take the deal for an extra 10 weeks off per year is absolutely insane.


Or Let’s Reverse The Situation:  

Would you rather have a 20% pay increase, or 20% of the year off?  This offer may be easier for people to accept.  We fear losing something.  For those living paycheck to paycheck its difficult to adjust to a 20% budget reduction.  In this scenario there is no loss, just an equal tradeoff.

Rather than going down from $60,000 to $48,000, this guy would be turning down a $12,000 raise to $72,000 a year to get the extra 10 weeks off.

Often career advancement works the opposite way.  In Ernie Zelinski’s book “The Joy Of Not Working” There is a quote to the effect of “If you work really hard for 8 hours a day, eventually you will become a boss and be able to work hard for 12 hours a day”

Rather than looking to earn more money, we should be looking to gain more efficiency in the hours we sell by seeking to reduce the number of hours we sell.

What Could You Do With 13 Weeks Off?

Take the summer off with your kids: I’ve personally had every summer off since 2007.  This year I had to start my job early, so I worked the month of August, but by and large the last 15 years I have had every summer off. During this time I’ve built a playground in our backyard, gone to a variety of museums and zoos, taken 3 trips to Florida, and had dozens of beach days.  I had dozens of days just walking around with the kids playing Pokemon Go downtown.

Start A Business, or several: 10 weeks is plenty of time to launch a business!  10 weeks is about the time it took from when we started our Amazon FBA business until we started seeing positive cash flow from it.  During that time frame we iterated and set up systems to allow the business to continue regardless of my work schedule.

Rehab A House: A 10 to 13 week chunk of time off would be perfect for buying a house and rehabbing it, preferably into a short term rental.  Get the numbers to work where the house nets $20,000 per year.  After just the first one you are money ahead.  Repeat every year and by year 4 your total job income is replaced.

Take Skills Training: With 10 focused weeks you could: Earn a google certificate in IT or Data Analytics,  Go to truck driving school and land a six figure job hauling freight,  or earn a quarter of an MBA.

Dedicated Search For A Higher Paying Job: This is especially true for the guy making under 60K/year.  Most people spend 0 hours per year actively searching for a better job.  What would happen if you spent 50 hours in a week looking for a better job?   We have seen that with the current “labor shortage”  new hires are walking in the door making far more money than people who have stuck with their employer for years.  There are people who are earning $15/hr that could switch to another employer in the same field, in the same city and double their pay.

Write A Book or Start A Blog: Writing is great for your mental health and could eventually become a source of income as well.  Writing challenges the author to research and think deeper on a subject that can ultimately lead to other improvements in their lives beyond publishing a book or gaining income.  I know what I have learned from writing this blog and my book has been far more beneficial to me than any direct monetary benefits.

Improve Your Health: With 10 weeks off you could start an eating and exercise program and not be tempted by fast food and vending machines since you have an ample amount of time.  You could even do the majority of an extreme workout program like P90X.

Work a nuclear plant outage:  We recently finished recruiting for our outage.  New folks will have roughly 5 to 6 weeks of work at $28/hr with 20 weeks of overtime for 4 of those weeks.  While this income replacement is great, the development of the new career is far more important than what they can make this outage.

Anyone with leadership ability and a strong work ethic will move up to a lead spot earning $33/hour,  and get 2 extra weeks of 72 hours a week.  Then there are opportunities to move to a crew that gets 12 hours shifts all outage.  People who stick with it for multiple years can eventually earn a spot in supervision earning $45/hr.  There will also be doors open to other contracting positions at other plants.


Unemployment Benefits:

For most Americans that end up in a situation like this, where they have several weeks off, it is generally due a work that is seasonal in nature.  The employer either furloughs the employee or lays them off, with the full intention of bringing them back at the start of the next season.  Sure, you received the pay cut for not working those weeks, but in many cases you would be eligible for unemployment benefits, provided you perform a work search and are willing and available to go back to work.  Some states waive this requirement with a return to work date of less than 90 days out.

Unemployment benefits are not available for people choosing to take an unpaid leave of absence, this is only for if the decision is employer based, not employee based.

For Michigan, if you are in an approved training program or have a return to work date within 45 days the work search requirement is waived.

For Connecticut, the work search requirement is waived if you are in approved training, have a definite return to work date from the employer laying you off that is within 13 weeks, OR have secured employment that will start within 13 weeks.

How much money are we talking about? In Michigan the maximum unemployment benefit is $362 per week.  This benefit amount has been unchanged for 20 years.  In Connecticut, the benefit amount has risen steadily with inflation and has a maximum of $649 per week.


Working Nuclear Plant Outages:

I started working nuclear plant refueling outages in 2006.  I started out making $14 per hour and earned just over $5,000 my first outage.  Now I typically earn around $40,000 to $50,000 in an outage season, roughly 13 weeks twice a year.  Earning $80,000 to $90,000 working half the year…yes please.  It hasn’t always been easy. There have been times where jobs have gotten cancelled and I earned way less than would be desired.  There have been other times (like now) where I have more work than I can shake a stick at.  What’s really interesting to me is when a husband and wife team, preferably pre-kids or post-kids in the house works outages together, AND both are able to secure leadership positions. Although Mrs. C would be more than capable, having young kids has prevented us from going this route.

In addition to both spouses earning $40+/hr and working 72 hours a week, they also both qualify for per diem,  tax free money that is paid for people travelling greater than 50 miles from their home.  This couple rents a hotel room or Airbnb for the 2 month duration of the job at $1,200 a month, for $2,400 total.  They receive $110/day per diem EACH.  That’s $13,200.  After accounting for their rent this is over $10,000 in TAX FREE money.

With 1 week of 40s and the rest 72s at $45/hr they would earn $60,000 in gross income, plus pocket the $10,000 in tax free income IN 8 WEEKS.

Now this isn’t an instant route.  It takes years to get to these pay rates.  So let’s put a fudge factor in there are say it takes 12 weeks for the couple to earn this amount of money, so what!  With 24 total weeks of work, they earn $120,000 in gross income, plus around $18,000 of tax free per diem.

Scaling Into Retirement:

You know what the biggest problem is for retirees?  They don’t know what to do!  They get bored.  They sit on their butts and watch TV…then they get more bored.  They have no friends because their social life was based around their work. Then they get sick and die.  Our work culture is largely to blame for this. We work 45 years for 50 weeks a year and then suddenly stop and call it retirement.  It would be much healthier to have several large breaks from work throughout the career, then transition over time to working fewer and fewer weeks per year until we get to ZERO.

What do you think?  Would you give up 20% of your income for a 20% pay cut?



John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John is the author of the book For My Children's Children: A Practical Guide For Building Generational Wealth.

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