Monday, January 27, 2014

The business of paid family leave

Interesting post by Nancy Falbre on the NYT Economix blog. Note the unchanging criticism that any paid leave would make the economy collapse (when it never does). This same day another Economix post confirms the stagnation/regression of wages vs profits: Profits up, wages down.

“Never in the history of the world has any measure been brought in here so insidiously designed so as to prevent business recovery, to enslave workers, and to prevent any possibility of the employers providing work for the people".
Thus did Representative John Taber, Republican of New York, condemn the Social Security Act of 1935.
Rhetorical attacks on paid family leave proposals have been less grandiloquent. But in 2007, Randel Johnson, a vice president of the U.S. Chamber of Commerce, proclaimed that the business community would wage “all-out war” against it.
The recently proposed federal legislation that aims to provide paid family leave to most American workers would be financed like Social Security, with a small payroll tax (less than half of 1 percent, or average of about $2 a week). It would be administered by the Social Security Administration.
“Family leave insurance” would be a more accurate description than “paid family leave,” because employees would be paying much of the cost themselves.
Like state-level programs currently operating in California, New Jersey and Delaware, the federal program would extend the existing disability insurance model to help defray the costs of family care for children, elderly and sick family members.

The United States is one of the few countries in the world that fails to provide such insurance, and strong opposition to it is still voiced by many influential members of the business community.
As with the Social Security Act, this opposition seems, in retrospect, misplaced.
The Family and Medical Leave Act of 1993, which guarantees unpaid family leave for a significant portion of American workers, initially aroused fears of malingering. These fears proved exaggerated. Relatively few companies reported any adverse consequences. Many enjoyed the benefits of reduced worker turnover.
When California’s paid family leave was signed into law in 2002, the state Chamber of Commerce labeled it a “job-killer.” But there is no evidence that it reduced employment or discouraged companies from locating in the state.
The California experience holds significant consequences for the national debate. A new book by Ruth Milkman and Eileen Appelbaum, “Unfinished Business: Paid Family Leave in California and the Future of U.S. Work-Family Policy.” summarizes many positive effects on children’s health, fathers’ involvement and maternal earnings.
Their research also offers strong evidence of minimal impact on businesses – even on the small companies considered especially vulnerable to regulatory burden.
The authors’ research incorporated two telephone surveys of a representative sample of California employers before and after the legislation was implemented (each including more than 250 establishments), several surveys of workers between 2003 and 2011, and interviews with human resource managers at about 20 different workplaces to learn how they adjusted to new procedures.
Nine of 10 employers reported either positive or no effects on their establishments, perhaps because the majority compensated for paid leaves by temporarily assigning the work to other employees. In other words, workers themselves bore much of the burden.
Yet only 10 percent of workers in 2004 and 6 percent in 2010 reported a negative impact, and the biggest positive effect that employers reported was improved employee morale.
Perhaps this is because both women and men know that, over their life on the job, they face a high probability of taking time off from paid employment to care for themselves or their aging parents, even if they don’t have young children. In other words, they appreciate the benefits of social insurance.
As do most intelligent people. Which is why, as a prescient article in Forbes explained two years ago, even card-carrying capitalists should support paid family leave.

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