May 18 2011

Paid-Sick-Leave Mandates Miss the Point

Hadley Heath

As Carrie wrote in an oped for Townhall today, Connecticut Governor Dannel P. Malloy favors a mandate that would require employers to offer paid sick leave to their workers.  This sounds great.  It sounds like the government ("we the people!") is stepping in on the side of the little wage earner and standing up to the big, oppressive employer.

But as Carrie pointed out in her piece, there are unintended consequences to this mandate. 

It's the same way with many government workplace regulations.  Usually, rules like this start because government sees a problem that it wants to correct.  Sometimes the problem is real (and it's debatable whether or not government should try to provide a solution), but many times in the first place the "problem" is just a misinterpretation - or exaggeration - of reality (as in the male-female wage gap).

Workplace regulations like the paid-sick-leave mandate in Connecticut miss the point.  If workers really value paid sick leave, they should be free to negotiate an individualized compensation package with their employer that offers them the amount of sick leave they need, or seek a job with a company that offers a lot of paid sick leave.

Imagine if Worker A wanted 10 sick days a year and Worker B didn't want any.  An employer could offer the average number of days (5) to both workers, or, in a more individualized system, the employer could offer Worker A the 10 days he wants, but with a slightly smaller salary than Worker B, who will work for more days.  This would satisfy both workers.  The government solution of a one-size-fits-all mandate, on the other hand, wouldn't allow for this. 

We see the same principle at work in the Affordable Care Act ("ObamaCare").  Not only do the minimum essential coverage requirements (the "individual mandate") of the law require that everyone buy health insurance, but they dictate exactly what pieces of policy coverage must be included.  There are more than 300 million people living in the United States.  Wouldn't a better solution allow us all to work with insurance companies to find the right policy coverage for us?

Maybe government officials like Dannel P. Malloy sincerely want to help workers.  (Or maybe he just wants to get their political support by advocating attractive-sounding regulations.)  Even so, government regulations can't be judged by their intention, but by their outcome.  And the outcome of this regulation would be increased employment costs, and limited flexibility for workers. 

If the point is to help workers, this mandate misses the point.

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