The momentum around paid family and medical leave continues to grow across the United States. Local and state campaigns have pushed the debate around this issue in statehouses across the country. At the federal level, the Democratic Party recently moved to include paid sick and family leave as part of its “Better Deal” agenda of policy priorities. And in a sign of the times, some Republicans have also joined the fray, eschewing the questions of whether we should enact paid leave in order to focus on what an ideal policy looks like.
The push comes in response to the mounting realization that today’s workplaces do not address the fact that most of us at some point in our lives must take time off work because of our own physical health or to care for somebody else. The Family and Medical Leave Act guarantees 12 weeks of unpaid leave for qualified medical and family reasons, but only 60 percent of workers qualify under current guidelines. Only 12 percent of private sector workers have access to paid leave through their employers. And while some Americans are covered by state programs, the vast majority of U.S. workers face the impossible choice between the loss of wages—or even their job—during the birth of a child, a medical emergency, or the need to care for a sick family member.
The good news is that many states have taken matters into their own hands, which also gives policymakers examples of how a successful paid leave program might work on the national level. The success of programs in California, New Jersey, and Rhode Island has moved Washington state, New York, and Washington, DC, to pass their own policies—all within the past year. And for good reason: Mothers who take leave are more likely to breastfeed and ensure that their kids receive regular checkups and immunizations. Research on California’s program found that new mothers were more likely to remain in the labor force and worked more hours for more money one to three years after the birth of a child. This is good news considering that women’s labor force participation has stagnated, partially due to a lack of work-family supports. Paid leave also is associated with a decline in public assistance usage, which lessens the burden on taxpayers.
These programs also are good for men. Giving birth is an experience obviously unique to women, but medical ailments and the need to care for an infant or sick family member affects everyone, men and women alike. Well-designed paternity leave policies reduce discrimination against women and also encourage a more equitable division of childcare and housework, which can free up time for women to play a larger role in the labor market.
While all these things sound good, many policymakers are rightfully concerned about the costs for businesses, which could take a substantial financial hit if forced to shoulder the entire cost of workers’ wages when they take leave. That’s why any paid leave program should be financed through a social insurance program, as states with existing programs have done. Workers’ wage replacement while on paid leave is funded through small premiums collected into a trust fund, and in most states is paid for entirely by a small payroll tax on employees. New York’s new policy, for example, has employees paying around $1 per week. To date, there is no evidence that firms with higher rates of paid family leave usage are burdened by higher turnover or wage costs. According to a recent Pew Research Center study, paid leave also makes it substantially more likely that workers return to their original employer compared with those who take unpaid leave.
As wages have stagnated over the past three decades, quitting one’s job or taking unpaid time out of work for any reason—whether for the birth of a child, a personal medical issue, or to take care of a sick family member—can torpedo a family’s economic security, even among dual-earning households. The examples of existing state policies show that paid family leave based on a social insurance model can provide a critical benefit for everyone in the U.S. workforce that far outweighs the costs.