The Economic Impact of Leap Year
Your chance of being born on February 29 is 1 in 1,461. The chance is 1 in 4 that any given year will be a Leap Year. Every four years we get an extra 24 hours to account for our calendar year not being perfectly 365 days long. It takes the earth 365 days (plus six hours) to travel around the sun. Therefore, the purpose of February 29 is to keep our calendar aligned with the Earth’s revolutions around the sun. But what does this mean for our economy?
The answer – not much. There is much debate around whether salaried employees are working “for free” that day. Now, before you go out and “Like” the “No Work on Leap Day Revolution” Facebook page, look at it this way – you are not working for free, you are just working for less. If you look at the math, 2012 is 0.27% longer than a normal year. The typical employee is compensated for an average of 261 days in a normal year. In a leap year the average increases to 262 days. When you take a salaried employee that makes $50,000 per year, which translates into $191.57 per day in wages compared to only $190.84 in a leap year – $0.73 less per day. So that day you thought you were providing your employer with one day of indentured servitude, you actually are just making a little less that day on average. If you are an hourly worker, congratulations, you just got a little extra cash in your paycheck this year!
Winners of Leap Day include renters and anyone with a parking or public transportation pass who get a “free” day of usage. Also, for example, members of fitness clubs get an extra day to burn off some excess calories. The drawbacks of an extra day include additional fuel and utilities consumption, plus more eating (if you consider that a drawback!). However you spent your Leap Day, I hope you made good use of your bonus day in 2012!