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August 24 2018

Eight Lame Arguments Against Paid Leave

Bloomberg View
featuring Carrie L. Lukas

By Ramesh Ponnuru

During the 2016 campaign, President Donald Trump broke with previous Republican nominees by pledging to make it easier for new mothers to take time off from work. Two Republicans, Senator Marco Rubio of Florida and Representative Ann Wagner of Missouri, are trying to make good on that pledge. They have introduced legislation to let parents finance leave by either delaying taking Social Security benefits when they retire or getting slightly reduced benefits.

The bill is taking predictable flak, with critics on the left saying it’s not generous enough and those on the right saying it’s too generous. The editors of the Wall Street Journal recently unloaded on the idea, making eight arguments against it. I’ll go through them one at a time and explain why I don’t think they’re persuasive.

First: The editors say the bill would create “a new entitlement.” Horrors! Except . . . what’s so horrifying? The proposal doesn’t raise federal spending over the long run, but only moves benefits forward in time from a person’s retirement to her working years.

It’s true that paid-leave spending would resemble Medicare in that it would continue each year even without the enactment of a new appropriations bill. But permanent authorization wouldn’t generate runaway spending: If more parents used Social Security to finance time off with new babies, their future retirement benefits would fall accordingly.

Carrie Lukas, president of the conservative Independent Women’s Forum, has rightly argued that the proposal is better seen as a way of adding flexibility into an existing entitlement than of creating one. It expands government involvement in paid leave only in the same sense that letting people invest some of their Social Security funds in stocks — a longtime dream of the Journal’s editors — would expand government involvement in capital markets.

Second: The Journal says there’s no way that the government would make people who took leave get lower benefits in the future. It’s true that the actions of future governments cannot be perfectly controlled or predicted, but this fear has not come to pass in parallel cases.

Since 1972 we have let disabled widows take their Social Security benefits early in return for making each month’s payment lower. They form about as politically sympathetic a group as can be imagined, but Congress has not moved to change this arrangement.

Third: Some young parents, the Journal points out, will stay at home after their leave is over. Some of them therefore won’t earn enough Social Security benefits from which to draw; so they won’t pay for their benefits. This point is true but trivial — just as it’s true that some parents will take leave and then die before hitting retirement.

The way to handle these rare cases is to nick benefits a little bit more for the vast majority of leave-takers who will reach retirement. Which the bill does.

Fourth: Social Security already has a big financing gap. That’s true, but it’s hardly a reason for refusing to make a useful change to it that leaves the gap unchanged.

Fifth: Letting people take Social Security benefits early to finance family leave will discourage employers from offering the leave on their own.

Again, why is this a problem? Letting people invest their Social Security funds, as the Journal has long advocated, would discourage employers from offering 401(k) plans, too.

In both cases, there’s no reason to expect total compensation to be affected: Employers would have to offer higher wages or increased benefits of other kinds to keep their position in the labor market.

Sixth: The new option would supposedly “push parents into a single leave formula — stay out of the workforce for a certain number of weeks.” Because it’s an option, it wouldn’t push parents into anything. Parents could take fewer weeks off in return for higher retirement benefits later.

They could also take off time beyond what the bill would finance: They would just have to do it without government help. The bill would also provide parents with multiple options for how leave would be structured, especially since one parent could transfer benefits to the other.

Seventh: Because Democrats will demand more generous leave policies, the Journal warns that the Rubio-Wagner proposal will backfire politically. But the bill is an attempt to satisfy a demand among voters for help with family leave. It’s not creating that demand. Republicans can choose whether to counter Democratic policies with nothing, or with an idea that gives families a new option at no net long-term cost to taxpayers. The political choice should be easy.

Eighth: Last we reach the slippery slope. The Journal conjures a scenario in which enacting this bill is followed by irresistible legislative proposals to let people take early Social Security benefits to pay for college or home down payments. Let disabled widows draw benefits at 50, and next thing you know people with sprained wrists will get them at 45.

Alternatively, we could support and oppose ideas based on their merits. If people could use Social Security money to buy mansions today in return for delaying their retirements, we’d face two problems: The numbers could not possibly add up, and even if they did the proposal would yield large numbers of destitute elderly people and thus defeat the point of having Social Security in the first place. So let’s not do that.

The family-leave idea, on the other hand, makes sense — which is why the Journal could take eight swings at it without any of them landing.

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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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