April 20 2016
featuring Sabrina Schaeffer
Fewer than half of the workers in the United States can take paid time off to care for a new baby. The rest either find a way to make it work — scale back at the office, drain savings, enlist relatives — or slip into poverty.
With no guaranteed income during one of life’s priciest events comes a flood of proposed solutions, mostly from the left. Democratic presidential candidate Hillary Clinton has called for 12 weeks of partly paid leave. Sen. Bernie Sanders of Vermont has proposed the same. San Francisco this month became the first U.S. city to require businesses to cover six weeks of parental leave at at full wages.
And a group of conservative thinkers in Washington wants to deviate from these concepts, promoting an alternative that shifts responsibility from taxpayers and companies to the individual.
Think of it as a 401(k) but for maternity leave.
Such a report is rare, because Democrats have traditionally focused on the struggles of working mothers and because Republicans have long argued that boosting the economy will boost everyone. (For context, Sen. Marco Rubio of Florida made history last year when he became the first Republican candidate to release a paid-leave plan.)
But liberals shouldn’t continue to dominate the discussion, said Sabrina Schaeffer, IWF’s executive director. Republican lawmakers ignore reality when they gloss over parents’ needs, she said, and it's also a political blunder to let one side own an increasingly hot issue.
“We’re responding to the progressive feminist and Democratic ideas about how to best help women in the workplace,” Schaeffer said. “We want to recognize that people's lives aren't static and give them flexibility.”
IWF proposes that states, which can move more nimbly than the federal government, create their own gender-neutral Personal Care Accounts (PCA) for potential parents to fill with tax-free savings, with as much as $30,000 during a lifetime.
Workers would be allowed to store the equivalent of 12 weeks pay per year, capped at a maximum of $5,000 annually. They could cash out only when they're eligible for extended leave under the Family Medical Leave Act, which provides most workers with 12 weeks of job-protected time off to care for a new child, tend to a sick relative or recover from an injury. The act, though, does not guarantee pay during that time.
Employers would also have the option to match contributions.
The approach resembles America’s most popular way to save for retirement (and similar models that encourage people to put away funds for education and medical care), although the period to accrue interest would be much shorter. If a worker never uses the money, the fund would essentially become an Individual Retirement Account.
The PCAs, of course, couldn’t help women who don’t have money to contribute or those who become pregnant before a reservoir of cash accumulates. The accounts mostly would lift people who already have resources to stash and grow.
“Not everything is going to help every person,” Schaeffer said. She and her colleagues also suggest giving tax breaks to small businesses that offer generous family-friendly benefits and simplifying the tax code to benefit families.
The IWF report argues that these strategies would take the burden off the employers — and shield women from the social consequences of one-size-fits-all policies.
The authors point to a 2015 study in Chile, which showed that, after the government told companies to provide childcare to working mothers, women’s wages dropped. They also cite research from Cornell University economists Francine Blau and Lawrence Kahn, who found that women in European countries offering lengthy maternity leaves were promoted much less often than their American counterparts.
Jeffrey Hayes, program director of job quality and income security at the Institute for Women’s Policy Research, questioned the effectiveness of IWF's proposal, saying more attention should be paid to young parents with the least financial security. Some work part time or for small firms that supply no benefits. Others carry thousands of dollars in student debt.
"Pregnancy tends to happen early in the life course," Hayes said. "You don't have time to build up much money."
About 88 percent of employees in the private sector have no access to paid family leave, leaving low-income workers with few options when a newborn arrives. Some women return to work a week after giving birth, he said. Some return before the incision from a Cesarian section heals.
Momentum to tackle the issue continues to grow nationwide. While California, Rhode Island, New Jersey and New York are so far the only states to offer new parents partial pay, advocates say lawmakers in at least 18 other states are considering implementing some form of the benefit.
The District could soon follow San Francisco's lead, with council members working on legislation that would provide new parents with 16 weeks of paid leave.