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January 25 2018

In Today's WSJ: A Simple Plan for Parental Leave

by Hadley Heath

In today's Wall Street Journal, Kristin Shapiro and Andrew Biggs write about a refreshingly innovative approach to the problem of paid family leave, an approach that is likely to draw support from both sides of the aisle. It has our support at Independent Women's Forum because: 

  • It’s budget-neutral, gender-neutral, and completely voluntary.
  • It requires no new taxes and depends strongly on the principle of personal responsibility.
  • It works within the framework of other existing programs and laws.

How does it work? Here's how Shapiro and Biggs summarize it in today's WSJ article:

Our proposal is simple: Offer new parents the opportunity to collect early Social Security benefits for a period—say, 12 weeks—after the arrival of their child. To offset the cost, parents would agree to delay collecting Social Security retirement benefits, probably for only about six weeks.

The authors then walk through an example of a woman who starts working at age 21 and has a child at 26. You should read the whole article here. Or, for even more information, check out the IWF Policy Focus that Kristin Shapiro wrote for us this month. It details the plan, explains how it is self-financing, and addresses a few other common concerns people have when they first hear about it. Worth the read! 

We should put this new proposal (and our support for it) in context: At IWF, we have often criticized government-centric attempts to mandate or fund universal paid family leave because we understand that many of these proposals come with significant downsides for workers, especially women. We've written time and time again that mandates (on employers, requiring that they offer paid time off) would raise the cost of employing potential dads and especially moms. And we've argued that expansions of government like the FAMILY Act would hurt workers through increased payroll taxes and would likely displace the variety of customized paid leave options that many employers currently offer. 

We are often the sole voice among women's groups to raise objections to these flawed plans. But data back us up: Other countries with more generous government-guaranteed paid leave have wider wage gaps and fewer women in managerial positions. Women in the U.S. have incredible opportunities to advance, in part because Uncle Sam has stayed out of our way in negotiating our jobs, our compensation, and our benefits. 

But when Kristin Shapiro came to us with her idea to give workers a choice -- the choice to get parental benefits sooner in exchange for delaying their retirement benefits later -- we were excited to consider this truly creative solution. It should appeal to those on the left who want to expand access to paid family leave. But it should also appeal to many on the right. Granted, many social conservatives favor paid family leave policies because of the way paid leave time can strengthen families.

But even libertarians and small-government types should appreciate that in this proposal, no one is asked to bear responsibility for another person's choices or leave time. It's the working parent who decides to make a tradeoff that affects him or her alone. The government is already collecting Social Security payroll taxes from every worker; this plan would simply offer workers another option for how to get some of their hard-earned dollars back. And because of how it's designed, this plan is not likely to disrupt the paid leave arrangements that many employers offer on their own, but it targets the most relief to those who currently lack on-the-job benefits. 

While there is no perfect solution to the problem of paid family leave, this plan -- Social Security Parental Benefits -- is the best we've ever seen, and it could significantly improve the status quo with far fewer downsides than any other plan advanced so far. 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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