President Bill Clinton’s first major legislative accomplishment – at least from his perspective – was passing the Family and Medical Leave Act. And though presidential hopeful Sen. Obama promises he is a new kind of candidate, ready to make a fresh break with the past, his domestic policy agenda largely begins where President Clinton’s left off. This would include a dramatic expansion of workplace regulations.
At a speech in New Mexico this week, for instance, Sen. Obama lamented how “unfair” the workplace is. From women earning less than men to minimum-wage workers struggling to meet rising food and energy costs, Obama believes injustice in America is running rampant. He championed a litany of proposals he claims will address such inequities, including a massive expansion of the Family and Medical Leave Act (FMLA). The changes he envisions aren’t minor.
Currently, only businesses with more than 50 employees are affected by FMLA. Obama wants to drag all businesses into the FMLA net. Existing law requires employers to offer unpaid time off. Sen. Obama wants to change that. “It’s not fair,” the junior senator from Illinois explained, for workers to be “punished for getting sick or dealing with a family crisis.” Obama wants improve fairness by shifting the burden to someone else. “I’ll require employers to provide all of their workers with seven paid sick days a year,” he promises.
This is typical of the senator’s compassionate, big-hearted, progressive proposals: He’s very willing to compel someone else – in this case, employers – to be generous. We can all sympathize with folks who need time off to care for a baby, an elderly parent, a sick spouse, or to recover from an illness of their own. But it’s old-style political dishonesty to ignore the costs that paid mandated leave creates for businesses and coworkers. These legislated benefits raise the costs of employment, which means that firms hire fewer workers. Plenty of people would prefer higher wages to more generous sick-leave packages, but big-government regulations move those decisions from individuals to politicians – Obama would effectively outlaw your right to accept more pay in lieu of paid leave.
Small businesses would be particularly hurt by these new workplace mandates. When an employee of a large company fails to show up, work may be shifted to coworkers without a significant loss of productivity. Not so with small employers. They face high marginal costs to hire replacements and productivity may plummet when employees take unplanned time off. FMLA qualified leave will require more paperwork and compliance expense, and businesses will have new challenges when enforcing attendances policies. The net result will be slower economic growth and fewer jobs – but that damage will happen over time, and the link with Obama’s regulatory burdens will be hard for most voters to see. Obama knows his “change we can believe in” won’t take the blame.
It’s hard to build a campaign slogan around the problems government mandates create for business. Yet voters should be concerned about these issues and the hostility that politicians so often show private-sector employers. Washington is good at making mandates, but it doesn’t create jobs – at least not the kind that create wealth. Many voters say their greatest concern this election is the economy. It’s ironic that so many will support a politician offering only vague hope instead of sound pro-growth policies.
