IWF has been writing for years about how policies that are promoted as helping women – whether they are mandated paid leave programs, official, specific office nursing rooms, or changes to the legal system to facilitate employee lawsuits – can backfire on women, because they make women more expensive employees.
As anyone who has helped run a business or organization knows, employers must consider the total cost of an employee. That includes the cost of benefits, taxes, overhead for office space, and the potential costs of litigation. When you make it more likely that women are going to utilize benefits, take more time off work, require more facilities, or more likely to sue, you make them more expensive—and therefore less attractive—to employers. Companies may pay them less, promote them less, or hire them less, all of which are bad for women. The “pro-woman” policies in the EU (which include lengthy paid leave times and other protections) helps explain why women are far less likely to be managers than they are in the U.S. – companies are less likely to want to hire women to critical leadership positions when they are likely to disappear for months or even years at a time.
Now Claire Cain Miller of the New York Times has written an article acknowledging this reality and providing rich new data that demonstrates the phenomenon:
In Chile, a law requires employers to provide working mothers with child care. One result? Women are paid less.
In Spain, a policy to give parents of young children the right to work part-time has led to a decline in full-time, stable jobs available to all women — even those who are not mothers.
Elsewhere in Europe, generous maternity leaves have meant that women are much less likely than men to become managers or achieve other high-powered positions at work.
Family-friendly policies can help parents balance jobs and responsibilities at home, and go a long way toward making it possible for women with children to remain in the work force. But these policies often have unintended consequences.
They can end up discouraging employers from hiring women in the first place, because they fear women will leave for long periods or use expensive benefits.
This is critically important information for the American people to have as they hear proposals from candidates like Mrs. Clinton for a federal paid leave program. Proponents focus on the benefits women would receive, but they ignore the very real costs and incredible damage such programs can have on women’s prospects.
This doesn’t mean that we can’t help women who need support. This article suggests that the real solution rests on making benefits gender neutral so that an employer would think that men would be as likely to exercise the benefits as women. That’s a nice idea, but is entirely unrealistic. Even if the government could come up with some way to cajole married parents to equally split their paid leave benefits and fully share parenting duties (something that has worked essentially nowhere), that still wouldn’t help the millions of women who are raising children on their own. And it’s these unmarried mothers who tend to need more help because they have lower incomes and no partner.
I’ve suggested we could use the EITC as a model for targeting aid to women with low incomes who need paid time off. This would have the virtue of providing targeted financial support without dramatically impacting their employment opportunities and expected costs to their employers. I’d argue that the best way to help non-poor working mothers is to put more money in their pockets, by lowering tax rates, increasing the child tax credit, and by deregulating the employment arena to make it easier for companies to hire them and offer more flexible arrangements (without benefit mandates).
Yet that’s a discussion for another time. Even if we can’t agree on what to do about the unintended consequences of these government mandates and interventions on behalf of women, it’s a big step in the right direction to acknowledge that exist and can do great harm to women’s economic opportunities and progress.