Providing Paid Family Leave Through Social Security
I’ve done a couple of posts recently on the United States’ anomalous lack of a national system of paid parental leave. And as it happens, today CAP senior economist Heather Boushey has released a paper about creating a national system of paid family and medical leave, a slightly broader concept than parental leave. Of course you could try to do this by simply mandating that employers offer paid leave to their employees. But a proposal along those lines would generate substantial opposition and almost certainly get watered down with various kinds of exemptions for small employers and would likely do little for part timers, contract employees, the self-employed, etc. Boushey’s idea is to mandate the “leave” (as with the current Family and Medical Leave Act) but to finance the “paid” part through the Social Security system which already makes structurally similar payments via its disability provisions.
Watch her discuss the idea:
This is good stuff. Right now the health and energy debates are sucking up the oxygen on the Hill, but it’s necessary for folks to start talking about and building support for and understanding of further social policy innovations. The hope, after all, is to keep progressive policy flowing in 2010, 2011, and beyond.
12 Responses to “Providing Paid Family Leave Through Social Security”
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June 9th, 2009 at 2:18 pm
That’s how it’s done in Canada. Leave is mandated, and is paid through Employment Insurance (which represents about 2/3 of the normal pay) for 50 weeks. Larger (and/or unionized) employers tend to top up the pay, especially for the first 13 weeks.
June 9th, 2009 at 2:20 pm
“Of course you could try to do this by simply mandating that employers offer paid leave to their employees. But a proposal along those lines would generate substantial opposition and almost certainly get watered down with various kinds of exemptions for small employers and would likely do little for part timers, contract employees, the self-employed, etc.”
You know enough about economics to know why this wouldn’t work very well. If you force employers to give paid leave to pregnant employees, then they have to make cutbacks elsewhere. This would probably result in the women not receiving a raise for a long time after they return to work, employers being more reluctant to hire married women of childbearing age, or employers offering them less pay when they do offer them a job. So why complain about the opposition when you know the opposition is right? Although I do agree with your original thesis. Paid parental leave would probably work pretty well as a welfare system.
June 9th, 2009 at 3:23 pm
Well done. Nicely reasoned argument. And she is cute (cue excoriating comments from Feministing regulars).
June 9th, 2009 at 3:25 pm
If you force employers to give paid leave to pregnant employees, then they have to make cutbacks elsewhere. This would probably result in the women not receiving a raise for a long time after they return to work, employers being more reluctant to hire married women of childbearing age, or employers offering them less pay when they do offer them a job
I was going to write a post explaining how illegal all these measures would be, and in particular how strange it is to assume that any costs borne by the employer would necessarily be taken out of raises for women who’d returned to work (that seems like a case where they’d probably actually lose the discrimination lawsuit), but instead I’ll just say that pregnant or recently pregnant women aren’t the only people who might take “parental leave,” let alone family leave, which is the topic of the post. There are often two parents.
Now, I agree with your original point, which is that family leave sponsored by the government would be better than an employer mandate. But I think an employer mandate would be better than nothing, and I’d at least like to see some statistical support for the idea that it’d lead to the awful consequences you describe. Do companies that have paid maternity leave discriminate against married women in hiring more than companies that don’t? Do companies that have paid family leave discriminate more in hiring than companies that have comparable unpaid leave policies? It’d be hard to untangle the causes (companies with better policies are probably less sexist in the first place), but it’d be an interesting study.
June 9th, 2009 at 3:39 pm
This is already done through disability insurance.
June 9th, 2009 at 3:45 pm
Well, many countries already do this to some degree, so I don’t think it is all that problematic. However, at least the way her plan is structured, it seems to cannote that pregnancy as a disability. (Let me be clear, the author says no such thing, I’m just wondering if this would be a negative association). I also seriously question the non-child-birth provisions of her proposal. This is essentially an expansion of the disability program. I seriously, seriously doubt that the program would cost 30 basis points of payroll as it would be much harder to administer and manage (and would be open to some abuse–it is pretty hard to fake a child birth).
June 9th, 2009 at 4:02 pm
I’m all for this, but I’d prioritize it somewhere behind mandated paid vacation and sick leave, neither of which we Americans have yet.
June 9th, 2009 at 4:11 pm
RE: Matt W
- Discrimination is difficult to prove in court.
- Even if they don’t discriminate, employers still have to find a way to make cutbacks to manage costs.
- I recognize that pregnant and recently pregnant women might not be the only ones affected depending on how the law is phrased, but certainly you can agree that they would be the ones most affected by such a law.
- You are correct that empirical evidence is difficult to come by, but I was drawing most of my arguments from similar arguments against minimum wage. There have been empirical studies on that issue.
http://en.wikipedia.org/wiki/Minimum_Wage
- As it so happens, I agree with all of Alan Blinder’s points and the monopsonistic competition arguments in favor of minimum wages, but you can’t easily apply those arguments when discussing individuals making substantially more than minimum wage.
- Arguments on labor unions can also be applied here, but to a lesser degree.
http://en.wikipedia.org/wiki/Opposition_to_trade_unions
- Unfortunately, Wikipedia doesn’t have a very good section on arguments in favor of unionization. Some of those arguments also wouldn’t apply to a government mandate on paid leave.
June 9th, 2009 at 4:23 pm
I feel compelled to point out that:
1) Social security is already going broke.
2) Unless the social security tax is increased, this would accelerate the day of eventual financial reckoning.
3) There’s not enough political will to increase the social security tax.
June 9th, 2009 at 4:45 pm
- Discrimination is difficult to prove in court.
Agreed, and the biggest factor here. Though again, refusing to give raises to women who take maternity leave seems like the easiest thing to prove.
- Even if they don’t discriminate, employers still have to find a way to make cutbacks to manage costs.
Right, but there’s no reason to think that cutbacks come right back out of the pregnant women’s hide.
- I recognize that pregnant and recently pregnant women might not be the only ones affected depending on how the law is phrased, but certainly you can agree that they would be the ones most affected by such a law.
If your point is that sexism will lead to women taking a disproportionate amount of parental leave, compared to men, you’re probably right.
I was drawing most of my arguments from similar arguments against minimum wage.
Well, we’ll just have to agree to disagree until there’s an actual study of parental leave; I think the reaction to the Card and Krueger study basically shows that economic work in this area is ideological rather than empirical (witness Buchanan’s a priori refusal to admit that Card and Krueger might be right), so I’m wary of applying those results elsewhere.
Peter: Social Security is not going broke in any reasonable sense of the term.
June 9th, 2009 at 4:46 pm
This is already done through disability insurance.
Not all employers carry policies that cover pregnancy leave, and often when they do, the benefit is very skimpy (IIRC sometimes just 5-6 weeks or so).
I feel compelled to point out that:
1) Social security is already going broke.
I feel compelled to point out you’re flatly wrong. Social Security is not “going broke.” It’s a transfer program that takes a certain percentage of GDP and gives it to old people lest they outlive their savings. The intergovernmental IOUs stashed away as a means to trigger the necessary transfers from general revenue may run out in another 40 years. But they may not.
Unless the social security tax is increased, this would accelerate the day of eventual financial reckoning.
The tax may well be increased. Or we may see a modest nudge up of the retirement age. Or perhaps (as seems likely) some combination of both.
There’s not enough political will to increase the social security tax
Meaningless statement. There doesn’t have to be enough political will to increase the payroll tax at this moment.
June 10th, 2009 at 1:04 pm
Two questions:
1) When you talk about keeping progressivism moving forward and adding “policy innovations” does this mean the federal government taking an ever large share of the economy for itself?
2) If so, at what point would you consider it a good idea to stop? At 30%? 40%? At what point do taxpayers need aid mainly because their tax bills are too high?