Pros and Cons Of Family Leave

This fall the New Jersey Legislature is expected to consider a paid family leave mandate that would affect virtually all businesses in New Jersey. The bill, S-2249 (Sweeney, Buono), would require every employer in New Jersey to provide 10 weeks of paid time off each year for childbirth or to care for a family member with a serious health condition.

The bill would be funded through an increase in the employee’s share of Temporary Disability Insurance payroll taxes. Although proponents claim businesses will see no adverse impact, some employers have voiced concern. Herewith both sides:

In Favor

Why is it that many of the same elements of our society that talk so much about family values oppose those social arrangements that allow some family leave for major medical problems and child rearing responsibilities? The reason seems to be that no matter how much businesses and industries make in a given fiscal year, it never seems to be enough. Unlike in most advanced industrial nations, for example, we still do not have universal medical converge — a reform that Chancellor Bismarck enacted in Germany in the 19th century. In the most recent debate on the issue, it seems we do not wish to extend that particular benefit— except to members of Congress and governors running for president —most of whom call the very medical coverage they have “socialized medicine.”

The same is true with family leave. Several years ago the nation and the state of New Jersey enacted very modest changes in our policies with a meager policy of limited unpaid leave. Now in New Jersey there is a proposal that would give workers up to $480 per week for 10 weeks to support people who are taking care of others briefly.

But the coverage would be sponsored by a self insured trust fund like disability insurance, which the workers but not the employers would pay into. If so, how can the Chamber of Commerce and business and industry lobbyists oppose it? Well, it would take brief rearrangements of their operations to cover absences, and it is just not worth the effort in their view especially in smaller establishments. It is strange that we can cover closing early for going to football games or going hunting, but not to take care of infants or the very sick.

This attitude is increasingly prominent in companies of all sizes. Despite the fact that the productivity of American workers is the highest in the world, their benefits have been cut back, especially in pensions and in medical coverage. The only people who are befitting from productivity increases are the highest echelons of management, stock holders, and major corporations with off shore operations. Something is wrong with our national priorities.

Why can’t business and industries include in their cost of doing business medical coverage and also include in it monies for family leave? That is much bolder than the legislature and the governor have discussed. It is odd how so many businesses regard machinery as assets to be cared for, but see employees as simply disposable liabilities.

If that were not their view how can one explain the firing of 40 and 50-year-olds with many years of service, and the abandonment of America by so many who enrich themselves at our expense? It is odd that people are working at places like Cosco and Starbucks at ridiculously low salaries and yet have to be happy that they have at least modest medical benefits. Surely that is better than working for Wal-Mart, the highest profit maker in the nation, and one of the lousiest employers.

It is the philosophical backdrop of the neo-conservatives that the superior ethical values are in the marketplace, and woe betides those who engage in the curtailment of those operations. Of course people need freedom, but they also need security. While U.S. business does not wish to emulate Western European welfare states, they have no problem employing low wage workers to make our tires, or T-shirts, our toys.

It is worth noting that U.S. employees have the highest rate of productivity, and take fewer days of vacation than any other civilized society. Yet the benefits from that productivity do not drip down to these who make it possible. There is just simply a lack of respect for those who do the nation’s physical work, and increasingly that neglect can be seen in the attitudes of corporate leaders.

The opposition of business and industry to family leave is a part of those attitudes that really show little respect for workers.

Michael P. Riccards

Riccards is executive director of the Hall Institute of Public Policy in Trenton.

Against

Legislation that would require businesses to provide employees with 10 weeks per year of paid family leave is a massive new workplace mandate that would hurt the ability of small businesses to do their job. Businesses, particularly small businesses, cannot operate with employees out for almost three months at a time. Paid family leave would result in the need to hire temporary workers, provided a business could find them, or pay overtime to existing employees, who may already be overburdened. In some cases, work simply would not get done, hurting the business’s relationship with its customers.

Instead of allowing employers to work with employees, the legislation would impose a one-size-fits-all mandate on every business. Currently, businesses work with their employees to provide paid sick time, vacation, and other time off, flexible scheduling and work-from-home arrangements to help employees with family needs without severely damaging the business. Those policies vary from business to business because each has different needs. Paid family leave would put an end to such common sense arrangements by treating the family-owned bakery the same way as a large hospital.

Unlike existing state and federal unpaid leave laws, which recognize the burdens that such mandates put on small businesses, this bill has no exemption for businesses that employ 2 to 49 employees. Hundreds of thousands of small businesses that have never had to cope with unpaid leave mandates would suddenly face the prospect of having key workers out for almost three months at a time.

Additionally, the Temporary Disability Insurance Fund (TDI), which would fund the program, does not have adequate funding to cover the costs that would follow from thousands of new claims. Like the state’s beleaguered Unemployment Insurance Trust Fund, the state has raided the TDI fund repeatedly over the last decade to pay for other state operations. Since 1993 nearly $500 million has been taken from TDI for general operating expenses, including $75 million in this year alone. Given our state’s current fiscal situation, it is unrealistic to expect the state to run a paid leave program efficiently or for employers to believe that the costs will not eventually be shifted onto them.

Aside from these shortcomings, the bill would have a profoundly negative impact on the state economy. New Jersey’s rate of private-sector job creation has been half of that of the rest of the nation for the last three years. Additionally, New Jersey ranks last for policies that support small businesses. It ranks 48th for business taxes. It ranks 43rd in the overall cost of doing business. In response to the New Jersey Business & Industry Association’s 2007 Business Outlook Survey, only 17 percent of employers said the state is a good place for business expansion, a 22-year low.

The proposed paid-family-leave legislation would not do anything to reverse these facts. It would only add to the state’s poor business-climate reputation and further discourage businesses from creating new jobs.

— John Rogers

Rogers is vice president for HR affairs at the NJ Business & Industry Association.

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