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November 29 2019

Paid Leave: Is Government Making it Better or Worse?

featuring Beverly Hallberg and Carrie Lukas

On this episode of “She Thinks,” IWF president Carrie Lukas joins to talk about our policy focus on paid—leave. While most employers offer paid leave to full-time employees, many lack sufficient paid time off. The main question we’ll explore is whether policymakers can help employees earn more and save for time off without growing government or discouraging employers from offering their own benefits.

Carrie L. Lukas is president of Independent Women's Forum and Vice President for Policy and Economics at Independent Women's Voice. She is the author of Checking Progressive Privilege and The Politically Incorrect Guide to Women, Sex, and Feminism. Carrie’s writing has appeared in The Wall Street Journal, The Washington Post, USA Today, and The New York Post. She contributes to the National Review and Forbes.com.

Beverly H.:
And welcome to She Thinks, a podcast where you're allowed to think for yourself. I'm your host, Beverly Hallberg. And on this episode, Carrie Lukas joins us for our policy focus on paid leave. While most employers offer some type of paid leave to full-time workers, many workers still lack sufficient paid time off. So the question we'll explore today is whether policy makers can help workers earn money and save for time off, without of course, growing government or discouraging employers from offering their own benefits. Before we bring Carrie on, a little about her. Carrie Lukas is the president of Independent Women's Forum and vice president for policy and economics at Independent Women's Voice. She is the author of Checking Progressive Privilege and The Politically Incorrect Guide to Women, Sex, and Feminism. Her writing has appeared in The Wall Street Journal, The Washington Post, USA Today and The New York Post. And she contributes regularly to National Review and forbes.com. Carrie, thank you so much for joining us today.

Carrie Lukas:
Thanks so much for having me on, Beverly.

Beverly H.:
So you have a new policy focus, which is entitled Help Workers Prepare for Leave Time. For those listening, I want everyone to know you can read this if you go to iwf.org. It came out this month, so this is a new policy focus. So as we start, why don't you, Carrie, just define paid leave for us? What all does that encompass?

Carrie Lukas:
Thank you. That's such an important kind of place to begin because I do think there's some confusion about that. What we're really talking about is the time that people ... Everyone who works knows that sometimes something comes up, and you can't go to the office. And for some of us, if you're working at a salaried position, most people have something from their employers where they say, "Okay, you get 10 days a year that you can take off and paid sick time." That's an example of paid leave. People who are hourly workers, or work part-time, they are less likely to have those days. So if you take a day off from work because of you're sick, or for some other reason, that means that you're going without payment for those hours, which obviously can create some real hardship.

Carrie Lukas:
And then biggest kind of when you talk about paid sick leave is one issue, but then one of the issues that gets the most attention is this idea of paid time off after having a child. So this is for new moms and dads when they're welcoming a new baby, or for in the mom's case, recovering from giving birth, or adopting a child and transitioning into having a new family member. It makes it a real challenge. In some cases, obviously, a woman who's just had a baby can't return to work the next day. So the question is: Does she have time off from work where she still gets to keep receiving a paycheck or some kind of financial support? Or what can we do to make is so that she can make ends meet during those times. So that's this whole idea of time away from work, but still having the financial support you need to continue making ends meet.

Beverly H.:
So tell us a little bit about what employers are doing. It seems like a lot of employers are meeting the demands of employees. So I know as a small business owner, I want to do what I can to make my employees happy while the work's still being done. So do you find that employers are finding their own solutions on how to provide leave time, especially for pregnancy, or if there is a health issue in the family, and that they don't need government intervention?

Carrie Lukas:
Absolutely. The worst and I think most pernicious myth about the American economy is this idea that employers don't care about their workers and that they're just trying to race to the bottom and do as little as they can. And you'll see this sometimes. I know sometimes in my Facebook feed I'll see somebody who says, "United States is the worst place in the world for women to work. We're only one of two countries that doesn't have a paid leave plan." And while, okay, fair enough that the United States is kind of unique in the world for not having a government mandate that all workers must ... That all employers must provide paid leave to their employers, that doesn't mean that the United States, that women are all being forced back into the coal mines two days after giving birth, or that employers aren't often offering these benefits.

Carrie Lukas:
When you look at the data, when you look at full-time workers in the civilian workforce, well over 90% have some form of paid time off. And one of the things that gets tricky here is you'll hear, "Well, only 13% of those workers have paid maternity leave or paid paternity leave." And that number I think is already a little bit misleading. But more importantly, employers have for a long time been moving away from this idea of having different buckets of time off. Instead of having, you get five sick days, you get five personal days, you get five vacation days, having something that's just called your paid leave, that you can take off this much time for these qualifying events, and not kind of having these different accounting silos.

Carrie Lukas:
And so that's why it looks like so few people have paid time off or this paid maternity leave, when in fact, employers are much more generous. And what I think is particularly interesting and encouraging is that we've seen over the last few years as the economy is strengthened, and the employment numbers have improved, more and more employers are offering paid leave benefits. This includes places like Starbucks and Amazon and those kind of places that you would think of as having a lot of hourly workers and lower wage workers, who are the people who are least likely to have paid leave benefits. And the good news is that as they have to compete for workers, and as they have more, are doing better in this growing economy, they are offering those, so that is very encouraging that the market is ... It's not perfect. Obviously, there are a lot of folks out there who don't feel like they have sufficient time off. But the market is pushing this in the right direction.

Beverly H.:
And I think some would listen to this and say, "That's great for salaried workers who have a great employer that these benefits are offered." But what about individuals who work an hourly paid job, that don't receive the same type of benefits? What about, let's say, a single mom, who's pregnant, getting hourly pay, what does she do? And shouldn't government step in at that point?

Carrie Lukas:
Yeah. I think there's a few ways to kind of approach this question because you're absolutely right. Frankly, I think that's really what we all should be talking about when we're talking about the paid leave debate. That's who we're worrying about, and that's who deserves our time and attention. If you're somebody who are well above the median average, then you should be able to ... You can figure it out. You can obviously ... I've got a couple kids. You have a lot of time to prepare for paid time, for needing to take leave time, whether or not my employer offers it, I can plan ahead. I can figure out how to get through the time I need, or make a plan that makes sense for my family.

Carrie Lukas:
When you talk about when you have that example of, especially the single mom who's working, and so who needs time off from work, which is that's where we are talking about workers here, which is kind of an important emphasis, is that these are people who are trying to support themselves and be independent, not just depend on government handouts. So you do think that's the person that absolutely I think all of our attention should be focused on. But we have to be careful. That doesn't mean we can just say, "Okay, yeah. Let's go ahead and let's have a government program. Let's have a new payroll tax and have a new benefit stream. Yes, absolutely, every paid hourly worker, everybody who has a minimum wage worker also needs to have a big paid leave package."

Carrie Lukas:
Well, I feel like you've got to be real careful with that because as an employers, I'm sure you know this, Beverly, too. When you're looking at hiring somebody or engaging an employee, the way you look at it, it doesn't really matter what the actual wage is. You're looking at the overall cost of hiring that person. How much is it going to cost the business to employ any given employee, and what are you going to get for that payment? And once you start adding in a lot of benefits, the costs of hiring someone go up. That means that the amount of money you can allocate to actual wages, the money you see in your paycheck at the end of any given pay period, that's going to go down, so there is that trade off.

Carrie Lukas:
And then almost more importantly, for people who are just starting out, once the costs of employing someone start going up, that means you're going to start looking for people who can bring more to the table. This means that not everybody, if you're just starting out, if you're a teenager, it's hard for you to command, to provide $20 of value to an employer. But once you start having, you hire minimum wage and then adding on benefits costs, all of a sudden, they say, "You know what, nope, I'm not going to take a chance on an 18 year old, or somebody who's just coming out of a stint with unemployment. I'm going to play it safe and hire somebody with more experience. Instead of having a couple of kind of lower paid new workers, I'm going to get somebody with a lot of experience who can handle all these responsibilities."

Carrie Lukas:
It's people who are starting out who have lower incomes who are the most likely to end up losing workplace opportunities if we just go ahead and start imposing a new payroll tax or a new employment mandate on people to try to provide this one size fits all benefit package. I think that is the approach that we shouldn't follow that temptation to just have government go ahead and try to solve this problem because the problems that it will create are worse, are even worse and will hurt those people more.

Beverly H.:
And as far as what we see our policy makers suggesting right now, I mean, you're talking about mandating that employers provide this. What about just creating a new government entitlement program altogether? Meaning everybody in the country will be paying higher taxes for this bank that can pay out to people who need paid leave. Is that something that's being considered? And if you can, tell us what our current law is and whether or not there is a big push to make some drastic changes to the current law.

Carrie Lukas:
Oh, absolutely. There has been a ton of debate and a lot of conversations going on. It's interesting that President Trump during his campaign, he was really the first Republican to make paid leave a real focus. He's been talking from the beginning for better and for worse about the need for Republicans, and that he wants the government to step in and do something to provide more paid leave support for Americans, and particularly those who just had a baby. Then obviously, if people, there's a lot of consensus, you look at a polling, and most Americans, even more Republicans think that the government ought to do something to help those who need paid leave. The question is: What are you going to do? Because as I was just describing, this idea of having a new paid leave mandate, first it would be very expensive.

Carrie Lukas:
If you start having a promised government payment of replacing someone's income for six weeks when they have a baby, or need time off from work, that's really expensive. That's a lot of money. And that money has to come from somewhere, of course. And so most proposals, the one that is the biggest out there is the most well known, is something called the Family Act, which as been introduced in numerous Congresses over the last several years by Senator Gillibrand, is to create a new payroll tax. So this would be a new tax on the first dollar that every American earns. And you'd be losing a little less than 1%. But this should be going into every single paycheck you have would be smaller because of this new tax and this new benefit program.

Carrie Lukas:
It's really important because we talk about wanting people, the people who can't afford time off from work, well, they also can't afford to have their paychecks reduced. And this is a tax they'd be paying not just for those six weeks, or the one year that they need this paid leave benefit. It's a tax that they'll be paying for the rest of their working lives. So the numbers can be quite big. And of course, once it becomes something that government is giving out, it becomes a benefit, your right to take this. It means a lot more people are going to be taking this. Right? So it could get very expensive very quickly.

Carrie Lukas:
So I think that the president and certainly most Republicans, but even a growing number of Democrats have recognized that, that kind of sweeping new mandate would be incredibly costly. Just as importantly, beyond the costs are what it would do to everybody out there who likes their current employment situation because, let's remember, as we kind of starting talking [inaudible 00:14:02] about what the private sector is already doing. Most Americans have benefit packages that they're satisfied with. Obviously, there's some people who have hardship and would have something different. But there's a lot of people out there who like what they have. And if all of a sudden, having a one size fits all government entitlement plan would rewrite the employment on the compensation package for every single working American. Suddenly, you would have a tax, this new tax that everyone would have to pay, and this new benefit.

Carrie Lukas:
As an employer, every employer would then have an incentive to say, "Hey, instead of providing you with the benefit package that I currently do, we have to pay for this new federal thing, so you're going to start getting this. This is your benefit package." Now that means that a lot of people might end up with reduced. Right now, if you're somebody, or have an employer who's generous, it very well likely may end up having your benefit packages go down, become instead of having 100% of your pay replaced for six weeks after giving birth, all of a sudden, you're going to have whatever the government is going to give you, which is closer to about 2/3 of what your salary is. So changes like that, and just as importantly, it also means that instead of having an employment situation where you can say, "You know what, I want to take off a couple of weeks, and I want to come back part-time," you can kind of figure out exactly.

Carrie Lukas:
I know that I have conversations like this with women at the Independent Women's Forum, where I'm the person that people have to talk to about their plans after maternity leave. Often, it isn't just a straight, hey, here's your time off, and you're going to take these days. And then you're going to come back full force. A lot of people want something a little different. They're willing to start working a day a week, but want some extra time. But all those conversation, all that nuance would be thrown out the door. And government would be saying, "Nope. This is what you get. You get exactly what we say, and you're going to have to pay for it every single day for the rest of your life. There's no choice."

Beverly H.:
Carrie, tell me a little bit about then: What are you suggesting? I know you're not saying the status quo is perfect. What type of policy suggestions is IWF Making?

Carrie Lukas:
Yeah. You're right. It's really important I think for us to kind of start with that because the status quo isn't perfect. First of all, the only law we have on the books on a federal level right now related to leave is the Family and Medical Leave Act. And FMLA, it entitles employees of covered employers, and these covered employers are larger employers, it's employers with more than 15 employees. So again, that exempts a whole lot of people who are working for really small benefits, aren't covered by this. But those who are, they are guaranteed 12 weeks of unpaid leave for a qualifying event. These are things like the birth of a child, an adopting a child. And then if you have a serious health condition, or one of your loved ones has a serious health condition, you can take up to 12 weeks off from your employer. And basically, they have to hold your job for you.

Carrie Lukas:
Again, for if you can't afford to have time off, that's still a little tough. But that's the only law we have on the books. And when we think about things we can do to help people, the Independent Women's Forum came out with an idea. This is the first paper on this was written by Kristin Shapiro, who is our senior fellow at the Independent Women's Forum. And she proposed the idea of giving people new, greater flexibility about the timing of benefits that they're already entitled to under current law.

Carrie Lukas:
So right now, every American, working American, is paying into our social security system. You are paying 12.4% of your payroll every single week is going into social security. And for that, you are entitled to a benefit payment at retirement. And for most of us, depending on your age, but for most people, younger people, you are entitled to retirement benefits starting at age 67 will be the normal retirement age. And so Kristin said, "Hey, why don't we let people decide?" If you just had a new baby, or you're adopting a child, you can say, "I want to take some of that social security benefit that I'm already accruing, that I'm supposed to take when I retire, I want to take that now. I need it more, and I'm willing to work a little longer instead of retiring at 67. I'll delay my eligibility so that I can work a little longer down the road in exchange for taking this benefit."

Carrie Lukas:
So this is the great news on this for taxpayers is that this isn't new benefits. This isn't something where we're all going to have to pay more in taxes. If you're a worker that doesn't want this, if you don't want to take that option, then you can be totally unaffected by it. It's just changing the timing of benefits that are already promised and expected under current law. This has been turned into legislation. This concept has been turned into legislation by Senators Rubio and Lee and Senator Ernst. And then interestingly, another really kind of big proposal that is coming out is a bipartisan bill that kind of changes it. It's a slight difference from the social security proposal. But this would allow people to borrow against their tax credits.

Carrie Lukas:
So everybody under current law, you're allowed to take child tax credits. And this would say, "In the year that you give birth, or welcoming a child, that first year, you can front load some of those benefits, so then you have reduced eligibility over time." I think it's a really important concept because not only is this budget, are these ideas budget neutral, they just change the timing of when benefits are owed, and therefore don't create new burdens for taxpayers. They also wouldn't do anything to change how employers are providing benefits for their employees. As somebody who's running this small organization, I wouldn't change. I wouldn't say, "Oh, no." I wouldn't change anything. I wouldn't say, "We're no longer going to offer the benefits we have because you could borrow against social security."

Carrie Lukas:
I think most employers would ... There's no new costs for you, so you would just continue doing what you're doing. You'd still be competing to provide benefits to your employees because that's how you can attract and retain good workers. So that's another one, and a way that I think that's a much better approach than that huge new entitlement program that we were describing earlier.

Beverly H.:
Yeah. Real quick as we're kind of wrapping up, one of the things I think is so important as you're saying this is the idea of flexibility and allowing flexibility within all of this, that every person's life is a little bit different, and so allowing that opportunity. So final question for you on this is: First of all, with lawmakers trying to find solutions and try to put forward legislation, do you think that any of those bills will pass? Second of all, I know you have some additional ideas on how you think we can make some smaller changes to help paid leave as it currently is.

Carrie Lukas:
Absolutely. And the policy focus I just wrote for IWF, I kind of pushed past, I give a brief overview of that state of the paid leave debate and some of these bigger issues, but really focused in and set on a few things that I feel like were common sense. And these are things that we should be able to, there should be bipartisan support for and we should pass this year. Right now, one of those is called the Working Families Act. This is this basic idea of allowing people who are eligible for overtime, so these are people who are working, hourly workers, relatively lower income workers, to say, instead of receiving time and a half right now under the Fair Labor Standards Act, every worker who works in excess of 40 hours in a given week, has to receive pay and a half for that extra hour they worked.

Carrie Lukas:
But instead, this is a government employees who are being compensated can say, "You know what, instead of pay and a half, I want to have an hour and a half off for that extra hour." This is a way to accrue paid leave time just by working overtime and by banking your overtime. That's something that the government employees can do. Private sector workers should have the option of doing that too. I feel like that's one that should be an absolute no brainer.

Carrie Lukas:
And then the other one that I think is worth mentioning is this idea of allowing people to use, to save, in anticipation of their own times of family leave. Right now there's savings accounts for healthcare expenses, for retirement, for education. It would be perfectly sensible to include paid leave among those very important expenses that deserve to have this tax advantage savings. With health savings accounts, people are allowed to put away money tax free, before paying taxes, that they can use for qualifying health expenses. Well, why can't they also use that money for time away from work when they are dealing, have a new baby, or are facing their own illnesses? There's a bill out there called the Freedom for Families Act that would allow people to use money that they accrue in their health savings accounts to replace income lost during these qualifying times when they're taking time off from work.

Carrie Lukas:
That's another very sensible. Let's expand it, make it easier for people to save on their own for time away from work. And then give them the opportunity to bank some overtime. Those are ways that we could help people help themselves without changing everything for every American worker, without imposing tremendous new costs on everybody else. We can make this a system that helps people and just gives people more freedom and better options.

Beverly H.:
And honestly, it's in a policy area that touches everybody. Everybody at a certain point and time is going to need paid time or paid leave in order to, whether it's pregnancy, or dealing with the health of a family member, so really great work done on this. And we so appreciate you joining us, Carrie, to talk about the solutions that you think are feasible and will benefit people's lives, so thank you.

Carrie Lukas:
Great. Thanks so much for having me on.

Beverly H.:
And thank you all for listening. Before you go, I do want to let you know of a great podcast you should subscribe to in addition to She Thinks. It's called Problematic Women and it's hosted by Kelsey Bolar and Lauren Evans, where they both sort through the news to bring stories and interviews that are of particular interest to conservative leaning of problematic women, that is women whose views and opinions are often excluded or mocked by those on the so-called feminist left. Every Thursday, hear them talk about everything from pop culture to policy and politics by searching for Problematic Women wherever you get your podcasts.

Beverly H.:
Last, if you enjoyed this episode of She Thinks, leave us a rating or review on iTunes. It does help, and we'd love it if you shared this episode. And let your friends know where they can find more She Thinks episodes. From all of us here at Independent Women's Forum, thanks for listening. 


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Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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