Is the US about to abandon a cost-effective tool in containing COVID-19 — paid sick leave?
The $908 billion coronavirus relief bill gaining momentum in Congress would, according to early reports, renew benefits for the unemployed, temporarily shield firms from coronavirus-related lawsuits and provide more funding for the Paycheck Protection Program. But what appears to be left on the sidelines is an affordable tool that both helps businesses and fights the spread of COVID-19: paid sick leave.
The Families First Coronavirus Response Act (FFCRA), which passed in March with bipartisan support, contained two weeks of emergency sick leave for reasons related to the coronavirus. Firms with fewer than 500 employees can apply for tax credits to be reimbursed, dollar-for-dollar, for the cost of providing paid sick leave. But these provisions will expire on Dec. 31.
Even with the FFCRA in place, access to paid sick leave has been far from universal; firms with more than 500 employees are exempt and small firms can request exemptions. Still, if this law is allowed to expire and paid leave isn’t addressed in a new relief bill, millions of primarily low-income employees in service-sector jobs such as retail, childcare and food preparation will be unable to take paid days off in 2021 if they have COVID-19 symptoms, test positive or need to quarantine after exposure.
The Centers for Disease Control and Prevention (CDC) strongly recommends that anyone with any symptoms stay home — and workplaces around the country caution employees to do the same. But does paid sick leave actually make this happen?
We analyzed this question by investigating what occurred after cities and states mandated paid sick leave in years past, and after the FFCRA passed in the spring. To each data set we conducted what’s called “causal inference”— a state-of-the-art statistical method that triangulates evidence from multiple sources— to test whether giving workers access to paid sick leave in fact decreases the spread of contagious diseases.
The overarching findings from our three studies are very clear, but they shouldn’t be surprising.
First, employees without paid sick leave are generally those in low-wage jobs — and thus the least able to afford to lose a paycheck. Others are afraid of getting laid off, particularly in precarious economic times like now. When such workers gain access to sick leave coverage, we find that they become more likely to call in sick and stay home when they have symptoms of illness.
Second, paid sick leave makes workers less likely to spread viruses among coworkers, customers and even fellow commuters on trains and buses. Using seasonal flu data from the CDC, we find that in the first year after a state-mandated paid sick leave, rates of influenza-like illnesses decreased by a significant 11 percent. Likewise, using daily coronavirus test result data from every U.S. state, we find that the FFCRA’s emergency sick leave provisions reduced the number of new cases by about 400 per day per state in its first weeks after enactment.
If Congress does nothing, millions of people will lose paid sick leave right as the country is confronting unprecedented spread of the virus. Already, thousands have used up their 14 days of paid sick leave, out of precaution or because they were required to quarantine. Under the current FFCRA, they are not eligible to take it again even if they catch COVID-19.
To be sure, some will always see any type of paid leave mandate as a burdensome regulation. But it covers the costs of sick days and prevents outbreaks from spreading within a workplace. Further, research we did before the pandemic showed no evidence that sick pay mandates hurt job growth or wages.
Lawmakers need to extend paid sick leave provisions for another year and should also make larger firms eligible for its tax credits. The Congressional Budget Office estimated that its paid sick and family leave provisions would cost $95 billion; but as of October, the IRS had processed only about $300 million in tax credits. Meantime, the federal government has spent trillions of dollars on economic relief packages for consumers and companies in response to the coronavirus. Providing taxpayer funding for another two weeks of paid sick leave has not only proven effective in preventing infections, it is also very cheap in comparison.
Stefan Pichler is a labor and health economist and a research associate at KOF Swiss Economic Institute at ETH Zurich. Nicolas R. Ziebarth is a labor and health economist and an associate professor at Cornell University in the Department of Policy Analysis and Management. This article was produced in partnership with Knowable Magazine.
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