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Paid Leave Is Good for Economy

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Hot off the presses – a new report finds access to paid leave following the birth or adoption of a child reduces the likelihood that a family will be forced to resort to public support or food stamps.  Rutgers University and the National Partnership for Women & Families have analyzed data in the  five U.S. states with paid family leave to examine the results when public policy, and not the whim of individual employers,  promotes family economic security, better health for parents and babies and maintains parents’ earning potential.  In today’s economic turbulence, such a program also bolsters demand, increases employment and strengthens the recovery.  These relationships are set forth in Policy Matters:  Paid Leave for New Parents and Economic Security for U.S. Workers.

Historically, high-income earners were often offered paid leave by their employers, but the lack of a national paid family leave program meant middle and lower income families made do without.  For these households, “flexibility” meant an immediate return to work, or terminating employment until the mother recovered, the parent-child bonding had been established, or child care was located.  Income interruptions naturally stressed the family budget, and negatively impacted the local and larger economy. It also impaired the health of both mother and child.  The Family Medical Leave Act, passed two decades ago, was intended to address these problems. But since it only offers unpaid leave, millions of workers who are eligible simply don’t take it because they can’t afford to.

The executive summary to the report states in part:

A rich and growing literature attests to the benefits that accrue to workers, families, businesses and the public when workers have access to paid leave to care for a new child. Such benefits include lower likelihood of premature birth, improvements in breastfeeding establishment and duration, and higher likelihood of obtaining wellbaby care.  Additional studies have connected these shortterm benefits to longerterm impacts, including improved health and well‐being for both mothers and children and decreased health care costs.  Access to paid leave has also been linked to families’ economic security and independence. Thus, paid leave policies can be viewed as proactive public investments in the health and well being of children and families.

However, paid leave remains inaccessible to many. In March 2011, only 11% of private sector workers and 17% of public sector workers reported having access to paid family leave through their employer; those percentages dropped to 5% and 14% respectively for those earning in the bottom quarter of wages.  Among firsttime mothers, just half are able to take paid leave in connection with the birth of a child.  Although access to unpaid leave is far more widespread, many U.S. workers and their families are unable to afford time off without pay. In the absence of public policy, workers’ access to wages during a care-related period of time off is variable and unreliable, and it is largely confined to those with the highest earnings and job status.

  •  In states with Temporary Disability Insurance (TDI) and Paid Family Leave (PFL) policies, women are twice as likely to take paid leave following the birth of a child than are women in states without these policies;
  • The effect is even larger for lower-income women, those who are least likely to have access to paid leave through employers;
  •  In California, which has a longstanding TDI program and the first PFL program in the nation, both women and men are more likely to take paid leave than are women and men in other states; and
  •  Women in states with TDI and PFL programs are less likely than women in other states to receive public assistance or SNAP income following a child’s birth, particularly when they also take paid leave.

So, paid leave when a baby comes is good for the mother and the child.  It keeps the family financially stable, grows the economy and decreases health care costs.  It means better health for all concerned, and lowers the risk that public assistance will be needed for food, rent or utilities.  It’s no wonder every other modern nation, and others far less robust than the U.S., have found a way to turn such a practical and cost-effective public policy into reality.  The only mystery that remains is why we don’t.

“Til next time,

Your (Wo)Man in Washington

 

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