Sept. 27 (Bloomberg) -- Democrats are about to try, and almost certainly fail, to secure paid parental and family leave for most American workers. That could still be an achievement, if it starts a conversation about how to provide American workers with the flexibility they need to manage family needs.
California and New Jersey, the two states with paid family leave programs, have shown how it can benefit not only mothers and children but also employers. In California, which has offered paid parental leave since 2004, mothers who have taken paid time off have worked more hours later on than those who have not. Most companies have reported no additional costs, and some have even saved money by experiencing less turnover.
It would be nice to see the same benefits extended to all U.S. workers and employers. And presumably that’s what Representative Rosa DeLauro of Connecticut and Senator Kirsten Gillibrand of New York aim to accomplish with the legislation they’re introducing next week. Their bill would offer most U.S. workers as much as 12 weeks of paid leave when they need to care for a new baby or a sick relative, or become sick themselves.
What’s puzzling is why DeLauro and Gillibrand didn’t make their proposal as business-friendly -- and therefore palatable -- as the California and New Jersey laws. Such a law would bring the U.S. in line with other major developed countries, each of which offers some form of guaranteed paid parental leave.
As things stand, U.S. employees are entitled only to as much as 12 weeks of unpaid leave without losing their jobs or their benefits -- and even then, it’s mostly those who have worked for at least a year at a company with 50 or more workers. About half of all workers qualify. Only 11 percent of workers get paid family leave through their employers.
The DeLauro-Gillibrand plan would make paid leave available to anyone who qualifies for Social Security disability benefits -- about three-quarters of all working-age adults. The program, which would be run through the Social Security Administration, would pay 66 percent of a beneficiary’s earnings, up to a cap of $4,000 a month, according to a draft circulating among advocacy organizations.
That’s all fairly similar to what California and New Jersey provide. To pay for it, though, DeLauro and Gillibrand propose to levy a tax amounting to 0.2 percent of wages on both workers and employers.
When supporters tried that in California and New Jersey, business opposition was so great they had to pull back and tax only the workers. This may have frustrated proponents, but it ultimately demonstrated that paid family leave can function without a tax on employers. In any case, any tax paid by employers would probably be passed on to workers in the form of reduced wages.
DeLauro and Gillibrand’s proposal also fails to adjust annual payroll-tax levels based on what the fund is likely to pay out in the coming year, as California and New Jersey have -- mitigating concerns that their programs could turn into expensive new entitlements draining state budgets. Any federal plan should include the same safeguard.
And the DeLauro-Gillibrand bill offers twice as much leave as California and New Jersey. That seems overly ambitious. When proposing a significant new federal program, there’s virtue in striving for modest progress.
If the bill can at least open this subject for debate in Congress, lawmakers will have a chance to address the value of having a national family leave program. The apparent disinterest among most states in following the lead of California and New Jersey suggests that a federal program is what it will take to provide most American workers the leeway to care for infants and other family members in need.
This legislation should be an opportunity to build support for a good idea. It should also push proponents of paid leave to become more realistic about what they -- and American businesses -- can live with.
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