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February 22 2018

Want paid family leave? Just borrow from your future self

Star Telegram
featuring Kristin A. Shapiro

We live in a time when some people like to refer to anything they would like to have, at no cost, as a right. Contraception. Health care.

These things aren't rights, they're benefits, and some of them add value to society. And someone has to pay for them.

But when society, writ large, determines that some benefits are worth the cost — like paid parental leave — it's time for policymakers to start innovating.

As a concept, paid parental leave enjoys overwhelming public support. That's for good reason.

Conservatives like it because it acknowledges certain biological truths about maternal-baby bonding that lead to better outcomes for moms and for kids as they grow.

Liberals like it because it expands gender and income equality in the workplace.

But despite its popularity, the U.S. is the only industrialized nation without a federal law that guarantees that maternity or paternity leave be paid.

There's good reason for that, too.

The most obvious is the business costs associated with mandated paid leave, which are particularly burdensome for small businesses.

Many economists agree that forcing employers to absorb the costs of child-rearing would lead to lower wages for women and hiring discrimination for women of child-bearing age. It has in other nations with far more socialized economies.

Raising the cost of payroll taxes isn't favorable either, since it essentially would amount to yet another wealth transfer from one segment of the population to another. And the last thing we need is another federal program siphoning money from our paychecks.

But the difficult realities of contemporary culture — including many single-parent households — make establishing a national paid-leave program a reasonable expectation.

We now have a policy solution worth considering.

Last month, Kristin Shapiro, a lawyer and visiting fellow with Independent Women's Forum, offered "a simple plan for parental leave" that would allow new parents to collect early their Social Security benefits for 12 weeks after the birth of a child.

As she and co-author Andrew G. Biggs explained in the Wall Street Journal, the plan would allow the average first-time mom to collect about 45 percent of her earnings, adding that Social Security’s progressive benefit formula would mean lower-income workers would receive a higher benefit relative to their earnings.

Accessing the benefits early would have minimal impact on retire since workers tend to earn higher wages the longer they remain in the workforce. Using 12 weeks for maternity leave, for example, would typically delay retirement with full benefits only 6 weeks.

The plan would be available to all mothers and fathers who have worked for four quarters regardless of the size of their employer, decreasing the likelihood of hiring discrimination associated with some employer mandate programs.

But the novelty of the plan lies in the fact that it does not require a new mandate, a new administrative body, a new tax or a new structure; it quite simply allows workers (both mothers and fathers) early access to the money the federal government is purportedly "saving" for their retirement, much like an IRA.

An added bonus, explains Ben Domenech of The Federalist, is that the concept encourages people to "think a little differently about Social Security."

If, as we're led to believe, the money is "ours" to spend how we choose, tapping into the benefits early in response to an event in our lives actually expands our freedom and control over those dollars.

There are reasonable criticisms of the proposal's decision to rely on Social Security benefits, which even now are an uncertainty for many in the millennial generation. Entitlement reform is a necessity and allowing another pool of recipients to rely on its funds is a calculated risk.

But the proposal has piqued the interests of pro-entitlement reform senators like Marco Rubio (R-Fla.) and Mike Lee (R-UT), which should reduce concerns about it causing Social Security to pre-emptively implode.

Paid family leave isn't a right; it's a benefit that adds value to those with access to it.

Shapiro's proposal would be one way of extending that benefit to everyone without creating another burdensome federal mandate.

 

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IIndependent 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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