The conservative case for paid family leave
The nature and course of the viral pandemic in this country continue to evolve, with significant regional surges in places like Texas and Arizona now driving the spread of COVID-19 in the United States. Most public health experts predict the late fall and winter will bring another surge of viral infections and with them the likelihood of government-mandated restrictions, suggesting a protracted cycle of relapse and recovery.
As policymakers consider how to shore up the labor force and support families during this uncertain time, an expanded paid leave policy should rise to the top of consideration, particularly for fiscal hawks hand-wringing over the nation’s ballooning debt.
A meaningful emergency paid leave program is an efficient use of taxpayer dollars and a plausible way to sustain our economy, keep Americans, and most significantly women, attached to the workforce, while protecting them from illness.
From a fiscal standpoint, paid family leave is comparably less expensive than unemployment insurance. Despite a smattering of other programmatic approaches like the PPP loans and direct subsidies, UI has been the mainstay of our workforce during this crisis, currently buttressing more than 30 million workers.
Using a back of the envelope calculation and average weekly wage data from June, the cost of supporting these workers for 12 weeks on the paid leave provisions authorized in the Families First Coronavirus Response Act would cost well over a trillion dollars less than to prop up the same workers on state and federal unemployment insurance benefits for 39 weeks, the current maximum duration.
And while many workers do not remain on UI for the term, and millions are already returning to work as local economies re-open, millions more remain on the sidelines. And research shows that UI durations are generally linked to the span of benefits. It’s worth recalling that the average benefit length of UI during the Great Recession was 40 weeks and that levels remained elevated for years thereafter, suggesting extended usage by most recipients.
Displacing workers even temporarily from the workforce decreases the likelihood of an efficient return to work, especially now when an estimated 68 percent of unemployed workers are receiving a higher pay-out from the expanded unemployment insurance and additional $600 in weekly benefits, than they have lost in wages, potentially discouraging them from returning to the labor force.
This would be less of a concern if the re-opening process wasn’t creating millions of job openings and prompting employers to usher back temporarily furloughed workers, particularly in the traditionally low-wage service sectors. According to a Bipartisan Policy Center Morning Consult survey, 70 percent of employers who furloughed workers intend to rehire them, though many have extended rehiring offers have yet to see their employees return. This presents significant obstacles for employers resuming business operations and to our nation’s economic recovery.
On top of these near-term frustrations, extended unemployment is also associated with a host of other social and health-related complications for unemployed persons, including higher mortality, divorce, and mental illness rates. Further, the disruption from the job market tends to permanently scar the earnings potential and lower the retirement savings for unemployed persons.
Throughout the viral pandemic, we need a system that can support the intermittent leave needs of all workers in a targeted way and that will allow more workers with caregiving responsibilities or illness-related disability to remain attached to the workforce rather than join the ranks of the unemployed.
On top of these considerations, sick leave can help to mitigate the risks of contagious illness from a public health standpoint and should diminish the need for one-size-fits-all shut-downs. During the H1N1 pandemic, an estimated 7 million new cases and 1500 deaths resulted from contagious workers that did not convalesce at home, exacerbating the spread of the virus. As a society, workers must be able to remain at home during their own illness or to care for others recovering.
And while there remain fiscal and regulatory concerns that could accompany a permanent paid leave program, particularly for Republicans, these issues are significantly less relevant during an emergency scenario that features a condensed time frame and spiking needs. The emergency paid sick and family leave provisions that were authorized in the Families First package are financed out of Treasury and are temporary, which should alleviate fears of a regressive taxation scheme or the potential for long run impairments to women’s jobs or private investment.
As lawmakers start to negotiate the next COVID package, they should set aside partisan differences and focus on the benefits of an efficient paid sick and family leave the program during this time.
We recommend extending the emergency paid leave program through June of 2021, ensuring that low-wage workers with large employers are eligible for leave and expanding the leave to cover more caregiving responsibilities. The emergency leave provisions are a lifeline to workers, not a business subsidy.
The ebb and flow of the virus have made it increasingly clear that workers and businesses need the flexibility of a temporary leave program to help Americans remain attached to the workforce even as they negotiate unprecedented health and caregiving responsibilities.
It’s time we all work together.
Maggie Cordish, MBA, was most recently the policy adviser to White House adviser Ivanka Trump on paid leave and family policy. She is a fellow at the Bipartisan Policy Center in Washington, DC.
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