- - Monday, February 4, 2019

ANALYSIS/OPINION:

Three of every four Americans support the idea of getting paid family leave from Uncle Sam.

But that support craters when they find out what it would cost.

At $450 in higher taxes every year — the minimum price for a small-scale federal program — fewer than half of Americans support paid family leave. Actual costs would likely run much higher.

The Heritage Foundation estimates that a 12-week leave program with benefits equal to 45 percent of pay would cost the typical household $570 in taxes per year. For full wage benefits, the cost soars to $1,300.

Since most Americans don’t want tax hikes of that magnitude, why not pay for the program by cutting spending elsewhere — say, in other entitlement programs such as Social Security and Medicare? The Cato Institute found even less support — only 21 percent — for that option.

When people aren’t willing to pay for a program — either through higher taxes or offsetting spending cuts — there’s only one way left for Washington to finance it: by borrowing.

A federal paid family leave program would almost certainly add to the federal debt — a prospect that is as financially irresponsible as it is ironic.

Federal borrowing shifts responsibility for today’s programs to tomorrow’s taxpayers. So a program meant to benefit children by paying parents to stay home with them instead would burden them with paying back the cost of their parents’ leave time, plus interest, once they start working.

Others pay, as well. Even with Uncle Sam paying for wage replacement, employers would still incur significant costs. Maintaining an employee’s family health insurance coverage, for example, would cost employers about $4,500 over a 12-week paid leave period.

And women are likely to find fewer job opportunities available to them. That’s certainly been the case with generous national paid leave programs across Europe.

Finally, unless Congress offsets the costs of this new program with immediate spending cuts, it would hasten the day when our nation’s ever-expanding debt reaches the point at which investors decide that buying it is just too risky. When that day comes, government spending could be axed indiscriminately — even for “sacred” entitlements such as Social Security. Alternatively, Congress might sharply hike taxes — thereby tanking economic growth.

The good news is that employers are responding to workers’ desire for paid family leave. Over the last four years, the percent of employers providing paid maternity leave has nearly tripled, to 35 percent.

This trajectory will likely continue — unless the government steps in to supersede private paid leave policies.

That is what has happened in states that provide paid family leave. Companies that were offering paid leave before the state’s involvement now have shifted much of their costs onto taxpayers, requiring workers to first get all they can from the taxpayer-financed program before their own policies kick in.

It’s been a windfall for those large employers, but the presence of the state program also has discouraged smaller companies from implementing paid leave programs of their own — ones that may have been more generous that the state programs.

Instead of enacting a one-size-fits-all government program that inevitably would not meet workers’ needs in the ways that employer-based programs can and that would quickly inflate in cost and scope, policymakers should consider solutions that would better target the needs of workers who currently lack access to paid family leave.

The Working Families Flexibility Act is one such approach. It would be particularly beneficial to lower-income earners. This bill would end the current restriction that prohibits employers from allowing employees to exchange their overtime hours for paid leave (at a rate of 1 hours leave for each hour of overtime), giving workers the option to accumulate significant paid leave.

Americans want paid family leave, but their unwillingness to pay for a federal program along with rapid expansion in employer-provided paid family leave suggests policymakers should not enact a costly new federal entitlement program.

Rachel Greszler is a research fellow in economics, budget and entitlements for The Heritage Foundation. The mother of six, she knows the value of paid family leave, and believes workers would benefit more from employer-provided programs than a one-size-fits-all federal program.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide