Progressive advocates of a new, government-mandated entitlement to paid family and medical leave argue that the present pandemic highlights the need for such a policy.  In their view, “[n]ow, more than ever,” we need “permanent paid leave laws to support workers’ health and economic security for the duration of the pandemic and into the future.”  But what the pandemic really highlights are the trade-offs associated with such a policy: Now, more than ever, the costs of a paid leave entitlement are apparent.

Everyone wants workers to be able to take time off to care for themselves or a family member.  However, no sensible policy pursues its aim regardless of cost.  The pandemic has devastated our nation’s economy, with businesses closing at unprecedented rates, especially minority-owned businesses.  Struggling businesses–and their workers–simply cannot afford the increased taxes necessary to fund a new paid leave entitlement.

Concern over this trade-off is what prompted the editorial board of the liberal-leaning Denver Post to recently oppose passage of Colorado Proposition 118, which would establish a state-mandated entitlement to paid family and medical leave funded by a .9% payroll tax split between employers and employees.  The editorial board explained:

As badly as this board wanted to support Proposition 118 and create a system to provide paid family leave for all working Coloradans, we have to conclude that now is not the time.

… For a hypothetical restaurant that employs 20 people at $26,000 a year, this would be a $2,340 a year increase in costs. That could be the death knell for a business already struggling to pay the rent.

Increased costs for businesses and workers, of course, are not the only trade-off of paid leave entitlements.  Among other things, paid leave entitlements also have been shown to reduce women’s wages and to redistribute income away from low-income families.  

While the pandemic certainly highlights the costs of paid leave entitlements, it is not as if they will magically disappear once the crisis has abated.  The increased taxes will still make life more difficult for businesses and workers, and the policies will still risk disadvantaging women and low-income families.  

This is why now, more than ever, we need to rethink the traditional tax-and-spend approach to government-mandated paid leave entitlements.  Exploring policies that would support paid leave by offering more–rather than less–flexibility to businesses and workers would be a good start.