What Paid Family Leave Would Do for Families and Businesses

Paid family leave isn't just a morally good thing to do — it makes economic sense.

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More than a few Democratic 2020 candidates have signaled support for federal paid family or medical leave to varying degrees. According to Politico, every candidate who serves in Congress supported Kristen Gillibrand’s FAMILY Act — a paid family leave plan that would give every worker in the United States up to 12 weeks of paid leave for pregnancy, illness, or caring for a loved one. About 17 candidates have signaled support for these policies but seven haven’t said anything at all, including Joe Biden, Bill de Blasio, and Steve Bullock, among others. Andrew Yang thinks that a paid leave policy should only apply to new parents — despite the fact that more and more women are leaving the workplace to care for their children or their parents or both at the same time, known as the “sandwich generation.”

While there are no federal leave programs in the U.S. as of yet, several states, including Washington, California, New Jersey, Connecticut, and Washington, D.C, have implemented a family leave policy that has either gone into effect or soon will. Still, the concept hasn’t received much airtime in the 2020 debates or during much of the press surrounding the nominee’s campaigns in general. This needs to change. It’s abundantly clear that paid leave is an essential service to families, and it shouldn’t be the sole province of nice-guy companies like Deloitte, which gives parents, regardless of gender, up to 16 weeks of paid time off.

“Often, these issues are framed in this dogmatic, iconic left-right divide,” says Dr. Jennifer Glass, the Centennial Commission Professor of Liberal Arts in the Department of Sociology at the University of Texas Austin and Research Associate in the Population Research Center. “The right wants moms to stay home all the time and provide child care for free, and the left wants to empower women and give them the opportunity to go back to work at six weeks when they might still be bleeding and they haven’t figured out breastfeeding and their kid has no way of telling them what happens when they aren’t around.”

While affordable child care is important, infant care is prohibitively expensive. It’s also a tough gig, per Glass. “This is a really critical period when attachment is formed and there’s rapid brain development. It just makes no sense to turn a baby over to complete strangers and say: ‘Please be empathetic enough to develop this other’s child brain.’ ”

The bottom line is that family leave should be on the table — and the government should pay for it. When the government doesn’t, and it’s left to the goodwill of companies, families suffer — especially the poorest workers at the smallest, poorest companies.

“People who make less money work at companies that make less money,” says Glass. “To have a corporate or employer provision rewards rich companies that can do these kinds of things. It penalizes poor companies that could reasonably go under [if they do provide those benefits].”

To that end, benefits packages make it harder for small companies to compete with massive ones when trying to hire talent. Dr. Eileen Appelbaum, economist and co-director of the Center for Economic and Policy Research, points to New Jersey, a state filled to the brim with headquarters of major pharmaceutical and insurance companies, as an example. Those companies tend to have extremely generous benefits packages, and the start-up next door — of which there are many in New Jersey — can’t compete.

That’s why the state-wide paid family and medical leave program that lasts up to 26 weeks in New Jersey is so important for small companies. Through the state, these companies can offer benefits that one might only traditionally get at, say, Johnson & Johnson. As a result, small companies can attract better talent, which is better for business.

Leaving the issue of paid family leave up to private employers — and trying to get them to swallow the cost of the benefits — just gives employers a license to discriminate, as well, says Glass.

“Employers should provide benefits, but I don’t think they should be the primary providers of this kind of payment,” she says. “[Making employers pay for leave] is an open invitation to gender discrimination to say, ‘If you hire women, you will have to pay for all these things that don’t come when you hire men.’ ” (Research does show that when paid family leave is offered to men, they do take it.)

Studies also associate paid family leave benefits with a higher workplace morale and less employee turnover. Many paid leave plans match up to a certain percentage of an employee’s salary. Companies can, with a benefits package, fill the gap. A paid family leave plan means that people can expect a reasonable standard of living if they have to take off work for any reason, such as a long illness.

“You don’t have to go on any kind of public welfare [when you take leave],” says Appelbaum. “That’s a savings to taxpayers — but it also means that you can maintain some semblance of the way that you’ve been living without relying on food stamps. It also means that you don’t have to run through all of your savings. You don’t fall into poverty. You stay attached to the workforce. Most people who take these leaves come back to work for the same employer. That’s good for the employer, because it reduces turnover, and it’s good for the worker, because they can continue with their lives.”

While most proposed paid family leave plans don’t offer full coverage of an employee’s wages, many offer a certain percentage point demarcated by months taken off work. The FAMILY Act, introduced by Senator Gillibrand, would, for example, give families up to 12 weeks of federally paid leave, providing up to 66 percent of a worker’s paid leave, or up to $4,000 a month.

Under this plan, employers can choose to pay out the rest of that benefit or employees can save up money for times they might know they need to take weeks, or months, off. Still, for many new moms, 12 weeks is not enough to recover from giving birth and bonding with the baby and figuring out the whole breastfeeding thing.

Glass prefers plans that go further — six months or more of leave for moms and dads. “There’s pretty wide consensus that parental leave is a good idea, and that breastfeeding for at least six months is a good public health approach to keeping babies healthy and improving their cognitive development,” she says.

Not only are extended leaves healthy for breastfeeding and cognitive development of babies, but they also help mothers recover from the strenuous and physically draining process of childbirth. Research shows that moms who take paid leave are associated with lower rates of Postpartum Depression. They also promote happy, healthy dads with a stronger bond with their babies.

Critics of policies that incentivize employees to take leave argue that it harms business. But, given that it helps small businesses attract talent who might go to companies with better benefits packages, that messaging might be disingenuous — and is often peddled by pro-business lobbying groups like the National Federation for Independent Business.

Appelbaum, who has studied the success of paid family and medical leave rollouts in states like California, says that companies largely see no difference in profits when people take leaves. And from a management perspective, it’s a net positive.

“Employers are well able to manage these absences, which are very important in the worker’s life, but come up relatively rarely in the course of the business,” she says. Meanwhile, employees who feel they can take time off to welcome their baby or care for an ailing parent report being happier at work and are more likely to stay at their job for longer.

Moms with paid family leave are also less subject to the wage gap, which is in part worsened when women leave the workforce to have kids. Paid leave programs keep moms attached to the workforce, ensures they don’t have to go on public assistance to have a baby, and incentivizes parenthood.

In other words, paid family and medical leave is great for business. It’s good for moms and dads, it’s good for grandma and grandpa. And it’s good politics.

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