January 28, 2013

Family Leave Policies

A new study by the Center for Women and Work at Rutgers University reports that working women who have paid family leave are much more likely to be working after the birth of a child and, most often, experience an increase in wage from pre- to post-birth.

The study analyzed information from the US Department of Labor between 1997 and 2009.  Among the findings, the study noted that since the mid-1980s, there has been a 13% increase (now nearly 73%) in the percentage of children with both parents (or the only parent) working outside the home.  And despite a tremendous amount of rhetoric about “family values,” “support for working families,” and “keeping our children secure,” the United States lags far behind other industrialized nations when it comes to policies that support workers needing time off for family time and needs.

Except for only a few states, practice in this country is limited to unpaid leave, despite 1993’s passage of the Family Medical Leave Act (FMLA), which requires that companies with a least 50 workers provide up to 12 weeks of leave (unpaid and not job-protected) annually “for their own health or the health of a family members.”  This leaves most employees to patch together sick time, vacation time, disability insurance, or unpaid time off to deal with personal or family health problems.  Most low-income workers have not vacation, sick leave, or PTO (Paid Time Off).

The United States in among the 3 countries (out of 178 – the others are Swaziland and Papua New Guinea) that do not mandate maternity paid leave.  And only 11% of private sector employees and 17% of public sector employees have access to paid leave through their employer. 

Specific key findings of the report include:

¬   Women who report taking paid leave are more likely to be working 9 to 12 months after a child’s birth than are those who report taking no leave at all (“nonleave takers”).

¬   Paid family leave increases wages for women with children.  Women who report leaves of 30 or more days are 54% more likely to report wage increases in the year following the child’s birth than are women who take no leave at all.

¬   Women who return to work after a paid leave have a 39% lower likelihood of receiving public assistance and a 40% lower likelihood of food stamp receipt in the year following the child’s birth, when compared to those who return to work and take no leave at all.

¬   Men who return to work after a paid family leave have a significantly lower likelihood of receiving public assistance and food stamps in the year following the child’s birth when compared to those who return to work and take no family leave at all.

Linda Houser of the Center for Women and Work summarizes the positive economic benefit of paid leave policies:  "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."

Forbes magazine sums up the economic benefits of paid leave in this way:

1.     Paid family leave addresses a reality that directly impacts every business and should be planned for strategically, uniformly and deliberately,
2.     Paid family leave is NOT a tax, but income replacement insurance program funded by employees at minimal cost, and
3.     We are paying for a cost for caregiving already - indirectly and inefficiently, through employee turnover, retraining, and workplace productivity.

This is the type of information Chrysalis works to provide to policy makers through SOLUTIONS, our annual legislative breakfast.  Our work is to provide factual, objective information that should be taken into account when decisions – state, local, individual – are being made that affect girls, women, and working families.

Thank you for being a leader in this work.