Policy Points: Bringing America’s Workforce into the 21st Century

By Zach Bernstein

What do the United States and Papua New Guinea have in common, aside from nice beaches?

Well, as it turns out, the two countries actually have one disappointing fact in common: They’re the only two countries that don’t guarantee paid time off for new mothers. Current U.S. law, the Family and Medical Leave Act, covers only part of the workforce.

The good news is that this could be changing. Some states are considering paid leave laws of their own. Those that have already passed them continue to reap the benefits. Most promisingly, paid leave has earned a strong defender in President Barack Obama.

“Since paid sick leave won where it was on the ballot last November, let’s put it to a vote right here in Washington,” he said in his recent State of the Union speech, where the theme of middle-class economics was prevalent. “Send me a bill that gives every worker in America the opportunity to earn seven days of paid sick leave. It’s the right thing to do.”

Last year, we wrote that paid leave was one of three signs of hope from 2014, mostly due to successful efforts on the local level. So far, there’s every indication that 2015 will be the year this issue really sees momentum pick up.

One big happy FAMILY (Act)

President Obama was likely referring to the proposed Healthy Families Act, which would guarantee up to seven paid sick days. That’s just one effort to better minimum paid leave standards for America’s workforce. Another prominent bill is the Family and Medical Insurance Leave, or FAMILY, Act. That bill was introduced in the last Congress by Sen. Kirsten Gillibrand (D-N.Y.) and Rep. Rosa DeLauro (D-Conn.), and it's expected to be reintroduced in this Congress soon. (There was also a recently introduced bill which would give all federal employees paid time off following childbirth.)

While these bills address the same basic concern, they do it a bit differently. The Healthy Families Act would allow workers to take time off to recover from their own illnesses, allowing them to earn one hour of paid sick time for every 30 hours worked.

The FAMILY Act, meanwhile, would guarantee 12 weeks of paid leave to care for family members or following childbirth, with workers earning benefits equal to 66 percent of their monthly wages. Similar to Social Security and Medicare, it would be funded by employee contributions of 0.20 percent of wages. Put another way, of every $10 earned, the contribution would be 2 cents.

Business groups like the American Sustainable Business Council (ASBC) support this kind of legislation because they, and so many businesses, recognize that having paid leave wouldn’t be a major burden on American entrepreneurs. Instead it would pay major dividends.

The evidence shows that productivity goes up when companies institute paid sick leave. Put simply, when workers know they can take time off for medical issues – and still get paid – they’re less stressed. That means they’re more productive. Also they are less likely to look for work elsewhere – which means less employee turnover, and lower costs for businesses.

Leave at the local level

As is often the case, it’s the states where progress is looking more likely, at least for the time being. Before this year, three states -- California, New Jersey and Rhode Island -- passed paid leave policies of their own. (A fourth, in Washington state, has been held up for years.) Then came election night 2014, when Massachusetts, along with two New Jersey towns and Oakland, California, all passed paid leave initiatives. As with issues like the minimum wage, the public is far ahead of its representatives – and that includes small business owners.

Of course, there’s still room to grow. Last year, ASBC led a campaign to show business support (PDF) for proposed paid family leave insurance legislation in New York state. That legislation did not make it through, but momentum remains strong heading into this year. Other states, like Maryland, are also pushing to get laws passed.

As always, it’s better to have a uniform system across the entire country than a patchwork of state laws, with some states offering different paid leave options and many states not doing so. But these state and local initiatives still represent the next best opportunity if Congress continues to stall. And progress at the state and local level proves to the rest of the county that paid leave isn’t going to break businesses -- and that doing right by workers can have broader economic benefits as well.

We have learned that the voice of business people speaking in support of these policies has been critical to their success. More business support will definitely be needed to keep the momentum up in the states – and build momentum in Washington. The ASBC Action Fund has business petitions for both earned sick leave and family medical leave insurance. Interested business owners can sign them as a first step in their advocacy.

In a weekly address not long after his State of the Union speech, President Obama expanded on his arguments in favor of paid leave: “We’ll help working families’ paychecks go farther by treating things like paid leave and child care like the economic priorities that they are.”

Paid leave’s progress in 2014 shows that he’s not the only policymaker who recognizes how important it is not just for families, but for businesses too. Let’s hope more will step up in 2015.

Image credit: Flickr/Colum O'Dwyer

Zach Bernstein is the Manager of Research and Social Media for the American Sustainable Business Council. Policy Points is produced by the American Sustainable Business Council. The editor is Richard Eidlin, Vice President – Public Policy and Business Engagement.