New Study Reveals Just How Much Biden Paid Leave Plan Would Help Economy

Everyone across the board would see their wages go up, the economy would thrive, and parents would stay attached to the workforce, a new study confirms.

by Ethan Freedman
A mother working from home while her three kids are sitting next to her

The social infrastructure spending bill that just passed the House, dubbed the “Build Back Better” bill, currently includes a provision to finally create paid leave in the United States. This proposal, while slimmed down from its initial concept, could have far-ranging impacts on both families and the entire economy, according to calculations from the National Partnership for Women and Families, a non-profit organization.

Currently, the plan would offer four weeks of paid leave to employees with a new child, a medical issue of their own, or a medical issue affecting a family member that they need to care for, according to the Center for Law and Social Policy (CLASP). That’s down from the initially proposed 12 weeks, but would be higher than the current level of zero weeks.

And guaranteeing just those four weeks could still be very beneficial to families, according to the National Partnership for Women and Families. But the benefits are even more substantial for some groups of people, the non-profit reports. Black and Latinx men would see a 6.2% and 6.3% increase in annual wages compared to a year with four weeks of unpaid leave, they found, with white and Asian men seeing a 5.8% and 4.6% bump. For women, those bumps are even higher – Black and Latinx women would both see about a 6.5% increase in annual wages compared to a year when they had to take unpaid leave, the non-profit found, with white and Asian women seeing a 6.1% and 5.9% boost.

Overall, people across the board would see their wages go up compared to a year where they needed to take unpaid leave. This should go without saying; any time off paid is going to increase wages compared to unpaid time. But it’s important to remember that taking time off in these circumstances often isn’t optional – if you need to take care of a medical issue in the family or a new baby, there’s often no way you can keep working.

And the benefits of paid leave wouldn’t just benefit individuals and families, the National Partnership for Women and Families found.

In another report, they note that enacting four weeks of paid leave could actually boost the entire workforce. They calculate that if the current number of caregivers remains the same, they would expect over 6 million more people in the workforce by 2030. If the number of caregivers increases by 10% in that time, the number shoots up to over 9 million.

The United States is of just seven countries in the world that does not guarantee maternity leave, reports The New York Times. Some amount of paid maternity leave is standard everywhere from Brazil to China to India to the Democratic Republic of the Congo to Finland, according to the Times. According to the OECD, mothers in the UK can get 39 weeks (about nine months) of paid leave, plus an additional few months unpaid. And in Greece, mothers can get 43 weeks of paid maternity leave, according to the OECD.

Paid medical leave is pretty common too, the Times notes, with many countries offering at least six months. Paid paternity leave is a little rarer, according to the Times, but still exists in many countries. As of today, the United States guarantees zero paid time off for maternity, paternity, or medical leave. Individual employers may offer various benefits, but many either don’t or offer plans that are woefully inadequate.

The National Partnership for Women and Families notes that 77% of workers don’t have paid time off for a new baby and 60% lack paid time off for medical issues. For new parents or people with sudden medical issues in the family, that could mean they have to quit their jobs or at best forego a paycheck – right when they’re facing even more expenses from the high costs of medical and child care in America.

The current plan in Congress would attempt to rectify some of that, but still leave the United States far behind many other nations in terms of parental and medical benefits. According to CLASP, the bill as it’s written right now would offer four weeks of paid leave for a variety of reasons. And the Times notes that that’s one way the bill would rival or surpass some other nations – the bill has a wide definition of family members who might need care that could qualify. That includes grandchildren, grandparents, in-laws, and siblings, CLASP notes.

For a while, paid leave was out of the proposed bill – but Congressional Democrats recently re-added it. Yet it still faces potential opposition from lawmakers like Senator Joe Manchin when the passed House bill hits the Senate.

Some states – like New York and California – already offer some level of paid leave, and the federal program would expand that benefit to the rest of the country. But without serious investment in parents and healthcare, America will still be a difficult place for many families to raise kids or deal with illness.