Both are beneficial to the worker.
For me, I would prefer to have higher pay (benefit exempt from tax) because with the extra money, I can invest it and make it work or me and pay for my vacation and retirement

I believe vacation is a better option. As the saying goes" Life cant be value by money". A higher wages job means you need to bear a higher responsibility to the company which brings more stress and it will cause you more sickness! In the end, you lose more than you gain and it bring impact to your family and health.

Both will depends on the life cost on the area of working and the position of the worker. Usually, both, increase in sallary and vacation time is needed!

Sereina, as we know anyone say both are needed and actually we all need it. However, see the disruption all around the industries and the competition. Do you think companies are ready for higher wages unless someone is with very niche skill-set. I doubt..
What has to be done in today's enviornment of volatility is art of saving the money and manage it with various things as you said vacation. People I feel need to look for freelance work too with regular job to sustain.
For work life balance, we need time and money management.

I agree millenials are looking for more in terms of life balance. We have instituted a reward program for performance where employees, after hitting assigned weekly targets get bonus time off. In most cases, it's an extended lunch or in stellar cases, Friday afternoons off to enjoy the afternoon and have some "me" time. It doesn't affect the overall operations to any extent as the targets are already hit for the week. All of the employees love the time off and the challenge of exceeding their day to day performances. Additionally they earn higher quarterly commissions which is incentive enough to keep striving for the company goals.

The allocation of extra holidays was something offered years ago in the Netherlands in an attempt to hold wages during periods of high inflation. People were allowed to 'carry over' days into the following years and ended up with a huge holiday backlog (which they took near to retirement!).

It is experience in company that everyone does their part to see business to grow and keep expenses down.