Ikea Shows Why We Don’t Need Government-Mandated Paid Leave

Here's another reason to love Ikea, the assemble-it-yourself furniture giant: The company recently expanded parental-leave benefits for its 13,000 workers based in the United States. Now employees can take up to four months of paid time off following the addition of a child to their family.

But this story should really give us a reason to love free enterprise. In a competitive labor market, companies will offer workers more and greater benefits in order to attract and retain them. Competition, not a government mandate, is the better way to increase compensation and increase prosperity for firms and workers alike.

Many feminists bemoan the U.S.'s lack of a federal government mandate that employers grant paid leave. Most countries guarantee some paid parental leave by law, but the U.S. does not.

It would, however, be inaccurate to say American workers do not have access to any paid leave. Most of us do. A survey from the Bureau of Labor Statistics found that 75 percent of full-time workers have paid sick leave, 74 percent have paid personal leave, 65 percent have paid vacation, 13 percent have paid family leave, and 88 percent have unpaid family leave.

As the news about Ikea indicates, it's likely that more U.S. firms will offer paid family leave in continuing efforts to hire and retain good workers. Netflix, Spotify, American Express, Adobe, Hilton and Chobani have also made headlines for expanded paid leave programs, all without a government mandate.

American workers, especially women, should celebrate that our government doesn't impose on our employment arrangements with a one-size-fits-all paid-leave mandate. In countries with paid-leave mandates, women are less likely to advance to managerial positions and the gender pay gap is greater. This policy that is intended to help families (especially women) unfortunately and ironically backfires on them.

Even Hillary Clinton understands this and argued as much on the campaign trail. She said maternity leave without paternity leave would "undercut women in the workplace and depress their wages." And the reality is that mandated leave for both sexes would still hurt women. Employers know women are more likely to take advantage of the benefit, and therefore could respond by favoring men for positions and promotions.

Paid-leave mandates also limit a woman's ability to negotiate for individualized arrangements at work. Parenthood is very personal, and naturally women will have different preferences about work based on a variety of factors. For maximum flexibility, parental leave arrangements should be left to workers and employers to negotiate.

None of this is to say that every woman (or man) in the U.S. has the flexibility, benefits and balance they want when it comes to work and family life. But if we want to see more families with paid-leave benefits, the solution is clear: We should not focus on government mandates, which would only result in more red tape and less prosperity, but instead focus on robust economic growth and job creation, so that companies (like Ikea) respond by offering competitive benefits.