Why Cutting Paid Leave From Build Back Better Could Cost The U.S. $28.5 Billion
Almost everyone will need time away from work at some point in their lives to care for a new baby, an aging parent, a sick family member or their own medical diagnosis. The U.S. is the only industrialized nation without any national paid leave policy, yet 75% of U.S. voters across party lines support a national paid family and medical leave policy.
Here is a sampling of countries that offer paid leave, according to the Organization for Economic Cooperation and Development (OECD): 156 weeks in Hungary, 120 weeks in Austria, 104 weeks in Japan, 52 weeks in Germany, 41 weeks in the U.K., 32 weeks in Poland and 0 weeks in the U.S.
Paid leave, which was part of the Build Back Better spending and tax bill, was first cut from 12 weeks to four weeks, and now may be cut out of the bill entirely.
“We must be clear-eyed that this is a now-or-never moment for paid family and medical leave,” says Molly Day, executive director at PL+US. “As we think about Building Back Better and all that entails, we cannot do that without a cornerstone policy of paid family and medical leave. It is one of the only policies in this agenda that touches people at all stages of their life, from birth to illness and recovery to death. It’s something that the vast majority of American voters support. We have no excuse to not deliver for the American voters.”
Christina Townsend of Herndon, Virginia, is a new mom who discovered her own mother was dying of stage four lung cancer shortly before her baby’s birth. She had used her savings to take a three-month unpaid leave to care for her newborn. “Because my husband doesn’t have access to paid family or paternity leave to help take care of our newborn, I was only able to visit my mom twice before she died,” says Townsend. “We shouldn’t have to quit our jobs and make unimaginable sacrifices just to be there for the people we love. I am advocating for the parents who have no other choice but to leave their newborn baby and return to work...I am advocating for the moms who stay awake overnight to feed and soothe their baby, returning to work the next day despite their anxiety, depression, and exhaustion. These circumstances strike families every single day, which is why we need to pass a national paid family and medical leave policy now.”
Today only 20% of Americans have any access to paid leave through their employer, and statistically its women, people of color, low wage workers who are the least likely to have access to paid leave.
“What it means is that millions of people are going back to work every single day, while they're still recovering from a serious illness like cancer or recovering from childbirth,” says Day. “They're also missing the moments with their families when they really need to be there, because they're making these tough trade-offs between a paycheck or being at their loved one's bedside. If we were to pass paid leave, we'd see another 130 million working people have access to paid leave. It is something that we know benefits families in terms of their economic security, health and wellbeing.”
Paid leave is not only a social issue; it’s an economic imperative. In fact, a national paid leave program could add $28.5 billion annually to the economy, according to the TimesUp Impact Lab. One of the ways it could help economic recovery is by enabling recipients of paid leave to spend money on goods and services to help funnel money back into the economy. It would also enable people to stay in the workforce rather than have to quit their jobs.
“Paid leave will help the economy both directly and indirectly,” says Monifa Bandele, interim president and CEO of TIME’S UP. “It helps directly by putting much-needed income in workers’ pockets when they are on leave caring for loved ones so they aren’t chasing between financial security and their families. We estimate a 12-week paid leave program would contribute $19.1 billion annually in this way. In turn, these workers would put much of this money back into the economy, creating an estimated 162,000 new jobs and providing an additional $9.4 billion in income for these newly-employed workers. So it’s a win-win for families who need leave, as well as the overall economy.”
Offering paid leave can also help small businesses better compete in the war for talent. “Most small businesses want to provide paid leave to their employees, but can't afford to,” says Bandele. “They don't have big human resource or accounting departments. Paid leave policies help level the playing field between wealthy corporations that provide paid leave to their higher-salaried employees and small businesses. This helps small businesses recruit and retain dedicated employees.”
Studies show that companies that offer paid leave have higher rates of retention and engagement. The cost of replacing an employee can be one-half to two times the employees’ annual salary. “Building a care infrastructure overall significantly boosts the economy and the GDP,” says Kristin Rowe-Finkbeiner, co-founder and executive director of MomsRising. “Studies show states that have paid leave in place actually helps increase retention and productivity at businesses. In addition, studies show that taxpayer dollars are also saved, such as a 40% lower need for food stamps. We’re saving businesses money, taxpayer dollars, and we're also keeping parents from being pushed out of the labor force. One in four women are pushed back into the labor force within two weeks of having a new child.”
During the ongoing global pandemic, women’s labor force participation is the lowest it’s been since the 1980s, setting women back decades in terms of professional advancement and economic security. Women being equally represented in the workforce could have added almost $500 billion to the U.S. GDP in 2019, according to a Federal Reserve Bank of San Francisco report.
“While caregiving in the U.S. has historically been seen as an individual responsibility, mainly placed upon women to provide paid and unpaid care, investing in paid leave can begin to reverse generations of systemic sexism and structural racism and other barriers to economic mobility,” says Bandele.
A main argument against paid leave is that it could harm businesses if workers take time off for caregiving, but some research shows that is not the case and finds paid leave may make it easier for companies to deal with workers’ absences.
“We cannot afford not to advance this policy,” says Rowe-Finkbeiner. “Supporters should immediately call or write their member of Congress and say the time is now for paid family medical leave. The whole package is still very fluid, and we shouldn't count paid family medical leave out at this time. We need to activate to make sure that we build the care infrastructure that women, families, business and our economy needs.”
Article originally published in Forbes.
Photo by Michael Soledad on Unsplash.