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 because our calendar year is not 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 ample debate around whether salaried employees are working “for free” that day. But before you hit “Like” on 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 do the math, 2020 is 0.27% longer than a regular year. The typical employee is compensated for an average of 261 days in a regular year. In a leap year the average increases to 262 days. For a salaried employee making $50,000 per year, that income translates to $191.57 per day in wages, or $190.84 in a leap year – $0.73 less per day. So that day you thought you were providing your employer with eight hours of indentured servitude, you’re actually just making a little less that day. 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. They get a “free” day of usage. Members of a fitness club get an extra day to burn off some calories. The drawbacks of an extra day include additional consumption of fuel and utilities, plus more eating (if you consider that a drawback!). However you spend your Leap Day, make good use of your bonus 24 hours.