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June 25 2014

New York Daily News: Paid Family Leave: Nice, But Costly

New York Daily News

By S.E. Cupp

Find a way to encourage it without a top-down mandate

Wouldn't it be great if you could leave your job for months at a time and still get paid as if you were showing up?

Of course it would. And in many countries, this is already the standard. In countries where businesses are mandated to cover family leave, including maternity leave, employees receive paid leave to care for infants or sick family members. In some countries, families get as much as one year of paid leave, divided between mothers and fathers.

Who doesn't think that this is a generous and productive policy that will make for a happier workforce and stronger families? No one who's being honest.

But anyone who's being honest must also admit that mandating generous leave across the economy will have some negative consequences on some of the very people it's designed to help.

Paid maternity and family leave are great - but the question is how we get there.

As an expectant mother, the issue takes on new meaning for me. I will be fortunate. I'll take a healthy amount of time off to care for my newborn and not have to worry about losing my job or my pay being docked. My husband will take far less time, but we are prepared for that. I'm incredibly grateful that my company's leave policies are so generous.

But not every American company has been as resilient as mine during the recent economic crisis. And by calling for yet another government mandate that will choke the most vulnerable businesses at the very worst time, President Obama is playing politics with peoples' livelihoods. Again.

In a perfect economy, every employer in this country would, as Obama wants, raise the minimum wage to $10.10 (or $50!) an hour, pay for their employees' health care and cover extended family leave. If freed from unintended consequences, these are well-meaning ideas that would give every American working family more flexibility, choice, dignity and income.

But unfortunately, we aren't freed from unintended consequences, and saddling businesses with more unaffordable government mandates will have plenty, as business leaders at local chambers of commerce, the National Federation of Independent Business and the Society for Human Resource Management, to name a few, have argued.

In fact, the NFIB Research Foundation examined multiple proposals to mandate paid leave and concluded it could cost between 12,000 and 16,000 jobs over several years, and cost billions in lost economic output. "There is no way to force employers to provide an expensive benefit without forcing some of them to make cuts elsewhere," said NFIB State Director Bill Vernon. "The result will be some combination of fewer hours for employers, weaker productivity for businesses and fewer opportunities for job seekers."

The President's response? He likes to make two arguments. One, he boasts that the average Fortune 500 company practices all of this benevolence voluntarily, because they know it's the only way to retain the best talent.

Well, sure. But that's like saying the millionaire down the street voluntarily puts $25,000 away every year for his kids' college tuition, and therefore you are mandated to do so as well.

Sure, you'd be smart to do so, but if you only make $50,000 and it means selling the family car and taking the kids out of after-school programs, is it really practical? Especially if the mandate comes just as your wife has lost her job and you've already adjusted your finances to accommodate another mandate forcing you to pay higher community lawn fees?

Obama's second favorite argument is that we're behind the rest of the world. As he glibly put it at the Working Families Summit on Monday, "If France can figure this out, we can figure it out."

Well, France hasn't figured this out. While Europe's generous family leave policies certainly outmatch ours, "women there are far less likely to hold private-sector leadership positions than are American women," as Carrie Lukas, managing director of the Independent Women's Forum, writes in Forbes. "That's because there's a cost associated with extensive leave time."

Something always has to give. And here in America, something will if companies are mandated to pay for family leave when they can't afford it. Smaller companies may hire fewer people or, worse, lay current employees off. They may likely decide to alter their benefit packages or stop offering them altogether (so be warned now - if you like your benefits, you might not be able to keep them).

The sad truth is that as great as all these entitlement programs sound, we don't have the economy yet to support them.

There are solutions, however, to help expand family leave in the meantime, like tax incentives for businesses that provide paid leave or promote creative and flexible at-home or part-time accommodations.

Of course, it's an election year, so that's probably wishful thinking. After all, who needs reality when you can just play politics?

 

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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