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July 13 2017

Libertarians' Lost Voice in the Paid Leave Debate

via Reason
by Carrie L. Lukas

Policy leaders are pressing the government to ensure workers have paid time off. Whether government has any businesses dictating what benefits must be included in the employment packages of Americans is rarely considered. The libertarian perspective is all but entirely absent in the discussion. That needs to change.

Our federal government has limited responsibilities, and micromanaging leave practices isn't one of them. Even the best-intentioned policies have unintended consequences that backfire on those they are supposed to help. We need to call out policymakers who use the excuse of a safety net to justify any new rules and regulations that needlessly restrict options for all Americans.

That's the predictable tactic employed by the Left, which is pushing extensive paid leave programs with increasing success. San Francisco's city council created a city-wide paid leave mandate on top of California's state paid leave program. Washington, DC just created an even more generous program.

Liberal women's groups and progressive activists regularly promote social media memes charging the United States is alone in the world in failing to guarantee paid time off for workers. They imply this deficiency is latent sexism or a lack of compassion for workers, women, and children.

But some on the Right are also embracing this logic. The American Enterprise Institute—considered a free-market organization—just released a joint report with the more liberal Brookings Institution, entitled "Paid Family and Medical Leave: An Issue Whose Time Has Come." The authors noted they'd disagreed about the particulars of the best policy solution, but "unanimously agreed that some form of paid parental leave should be offered to help workers at the time of birth, adoption, or fostering of a child."

They outline a "compromise plan" to provide eligible workers with 70 percent of their wages for eight weeks of gender-neutral paid parental leave. This new federal entitlement program would be funded by a dedicated payroll tax and cuts to other spending.

AEI's report came just after the release of the President's budget outline, which included funding to expand the state-based Unemployment Insurance system with the goal of providing workers with a similar benefit.

There is pushback against sweeping new government entitlements. The Independent Women's Forum (where I work) argues that policymakers should instead seek policy reforms that help workers while minimizing economic disruption. Allowing workers to save tax-free for when they need time off for work is one such idea.

The Earned Income Tax Credit (EITC) could also serve as a model to provide a financial boost to lower-income workers who lack paid leave benefits. The IWF argues that any government intervention ought to be need-based, rather than a mandated entitlement program that would effectively do to our compensation system what ObamaCare did to health insurance.

The public likes the idea of government doing something to make sure new parents have a benefit that lets them spend more time at home with their children. But often overlooked is that the money has to come from somewhere. Businesses forced to pay more for benefits have less for increased wages.

Mandates that make employees more expensive offer less incentive for businesses to hire more and more highly skilled employees (that's bad news for lower-wage workers). Employers may avoid hiring those most likely to use benefits, particularly women. A government one-size-fits-all paid leave program would also discourage voluntary alternative work arrangements like job-sharing and telecommuting that benefit employers and employees.

Allowing the government to dictate what must be in our employment contracts is another chip off the block of basic liberty and self-determination. It becomes illegal for an employer to offer a job that doesn't fit the government rule. As an employee, you can't choose to take a greater share of your compensation as take-home pay; you can't decide to save on your own for time away from work in the future; government has decided how this must be handled.

There is also the matter of fairness. A paid leave mandate creates winners and losers. People with families and children will receive the benefits, while those who cannot or choose not to have children will pay for benefits they are far less likely to use.

That doesn't mean that companies shouldn't offer leave benefits. Rather we should allow employers to create a variety of work relationships that appeal to their employees' unique needs. Some workers will gravitate to businesses offering more robust benefits. Others may prefer companies that compensate with higher pay. Enabling people to act on their preferences is what the marketplace is all about.

The United States is a Constitutional Republic with a federal government that is supposed to have limited powers used for very specific purposes. Micromanaging employment contracts or taxing some citizens to give money to others shouldn't be among those powers.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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