President’s Budget a Win for Paid Family Leave

Since 2002, California, New Jersey and Washington have passed programs to make family leave affordable. Plenty of states would like to join them, but they could use some help getting started.

President Obama’s proposed budget would do just that. The budget includes $5 million in a fund at the Department of Labor (DOL) that will provide technical assistance and support to States that want to establish paid-leave programs. Funds could be used for a wide variety of purposes, including designing a program, research, actuarial analysis, and development of a financing model and benefit structure.

Too many families in the U.S. today must make the painful choice between the care of a loved one or a desperately needed paycheck.  The last time the DOL conducted a survey on the impact of the Family and Medical Leave Act, the findings showed that in 1999-2000, 3.5 million people eligible for and needing leave didn’t take it because they couldn’t afford to go without pay. We know many more workers take less time than they are allowed and need to take.

Several recent reports have underscored the value of pay during leave. An analysis of California’s family leave insurance program found that it more than doubled leave use, increasing it from around three weeks to six or seven weeks for the typical new mother.

Authors report that California’s paid leave program substantially reduced previous disparities in leave-taking. Non-college educated, unmarried, Latino, and Black mothers studied increased average time on leave from between one and two weeks to between four and seven weeks.

Paid Leave Helps Families, Business, Taxpayers

This study also offered an exploratory analysis of what happens to women workers who’ve used the program when their children are one to three years old. They found suggestive evidence that paid family leave helped women increase their work hours 6-9 percent, and possibly experience similar growth in wages.

Research by the Center for Women and Work at Rutgers University confirms that having paid family leave helps women stay employed and increases their wages. “Pay Matters:  The Positive Economic Impacts of Paid Family Leave for Families, Businesses and the Public,” a study commissioned by the National Partnership for Women & Families, also looks at the benefits for taxpayers.

Study co-author Linda Houser, concluded: “While we have known for a long time about the maternal and infant health benefits of leave policies, we can now link paid family leave to greater labor force attachment and increased wages for women, as well as to reduced spending by businesses in the form of employee replacement costs, and by governments in the form of public assistance.”

Women who take paid leave are 39 percent less likely to receive public assistance and 40 percent less likely to receive food stamps in the year following a child’s birth, compared to those who do not take any leave.

Yes, the United States is a country where nearly one in ten women who take unpaid leave – according to that 2000 DOL survey – wind up on public assistance. For low-income families, the figure is one in five.

In 1995, a bipartisan Commission on Leave recommended that states experiment with forms of wage replacement for those taking family or medical leave. President Obama’s budget would move us one step closer to making that recommendation a reality.

For other recent research on the need for paid family leave, see these excellent reports:

Janet Walsh, Human Rights Watch,   “Failing Its Families:  Lack of Paid Leave and Work-Family Supports in the U.S.,” http://www.hrw.org/reports/2011/02/23/failing-its-families

Eileen Appelbaum and Ruth Milkman, “Leaves that Pay:  Employer and Worker Experiences with Paid Family Leave in California,” http://www.cepr.net/documents/publications/paid-family-leave-1-2011.pdf

Netsy Firestein, Ann O’Leary and Zoe Savitzky, “A Guide to Implementing Paid Family Leave: Lessons from California,” http://paidfamilyleave.org/pdf/pfl_guide.pdf