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The Future of Paid Family Leave

With paid leave being taken in and out of the reconciliation bill, you might be wondering, what is paid leave, and why is it so important?

Paid family leave has been on a legislative roller coaster in the United States these past few weeks. The United States is one of the only industrialized countries to not have a federal paid leave program, despite the concept's popularity.

A section on Universal Paid Family and Medical Leave was approved by the House Ways and Means Committee on Sept. 9, but it was taken out when the Build Back Better bill was downsized to only $1.75 trillion from $3.5 trillion on October 28 to appeal to moderate Democrat Sen. Joe Manchin from West Virginia. Just a week later, on Nov. 3, another version of paid family leave was added back into the bill. The bill is scheduled to be voted on in Congress the week of Nov. 15.

“It says a lot about our country and what we value that getting people back to work 10 days after birth is more important than the health of that infant, and the health of that worker, and I would like to see that change,” Adrienne Schweer, the leader of the paid family leave task force at the Bipartisan Policy Center, a Washington D.C. based think-tank that promotes bipartisan effort in solving problems in the U.S.

So what is paid family leave?

Paid family leave is when new parents are able to take time off of work, and still receive income after the birth or adoption of a child. The majority of the time, these payments do not match the actual salary, but the need for paid leave is still great. Experts agree paid family leave can be a tool to boost employment numbers, especially during the current labor shortage.

“Our nation's inadequate childcare options and lack of paid family leave and medical care prevented talented workers from contributing to our economy,” Chairman Richard Neal (D-MA) said in his opening statement during the Sept. 9 committee meeting where the original section was approved.

The current proposal offers four weeks of paid leave, as opposed to the original section which would have provided up to 12 weeks of paid leave for illness or caregiving for an ill family member to eligible citizens. It is important to note that the vast majority of day cares will not accept infants younger than eight weeks old.

“Great can't be the enemy of good,” said ​​Schweer. “Yes, we need all kinds of paid leave but even just a step in the right direction on parental leaves, can really help women stay in the workforce.”

During initial debates, congressmen against the passing of this section argued that it would discourage employees from going back to work, but data found from states which do have a paid leave programs, like California, show that it will actually incentivize employees to return to work.

Where does the U.S. currently stand with paid family leave?

The United States is one of the only wealthy countries to not have a paid leave program. However, there are some protections for parents who work.

The Family and Medical Leave Act (FMLA) of 1993 allowed employees the ability to take 12 weeks off unpaid for the birth or adoption of a child and would guarantee the employee would still have that job after those 12 weeks.

Recently, Congress passed the Federal Employee Paid Leave Act which provides 12 weeks of paid family leave for all federal employees.

Many private companies do offer some sort of paid leave within the company, however, there are large discrepancies between who has the opportunity to take paid leave. In fact, only 21% of workers have access to paid family leave, meaning that 79% of workers do not.

Those who receive paid leave as a benefit typically are typically already high earners. While people who work in typically lower-wage roles that require workers to be on their feet are less likely to have that benefit offered to them. Only 8% of workers who make less than $14 an hour are offered paid family leave.

Why is paid family leave important?

Paid family leave has been a popular policy during campaign season, and statistically, many Americans are in favor: 84% of voters in battleground states are in favor of paid family leave, according to a poll.

Some of the research into paid family leave has also shown that mothers who have paid family leave are more likely to return to their job within the first year of their child’s life than mothers who do not have the opportunity to take paid family leave.

The United States has a relatively high maternal mortality rate compared to other industrialized nations. Paid family leave would help minimize that, as complications can arise for women who returned to work within two weeks of giving birth when their body hasn’t healed enough.

Research has shown that taking time off to properly treat an illness would prevent it from getting worse and create a need for more time off. Not only that, but paid family leave in California actually reduced the number of infants hospitalized.

“Overall, having such a plan could improve overall financial outcomes for families, which consequently reduces overall healthcare spending for that family,” said Michelle Buonincontri, a certified financial planner at Being in Abundance.

How can Paid family Leave help the economy?

Research done by the Center for American Progress, an independent nonpartisan policy institute that focuses on improving the quality of life of Americans, found that every year about $28.9 billion of wages are lost due to the lack of paid leave.

During the pandemic, some have been nervous about returning to work because they didn’t have childcare or didn’t know what to do if a family member or themself tested positive for COVID-19 and needed to quarantine. Having a paid leave program would act as a security blanket against those fears.

Without paid leave programs, women and people of color had to leave the workforce during the pandemic at rates disproportionate to their white male colleagues.

“They say on average in the past, every 12 years a woman leaves the workforce to care-give. And we've seen a huge exodus over the last year,” said Buonincontri.

The United States is currently in a labor shortage with fewer people returning to work than expected. But introducing a paid leave policy could easily be the way to fix that.

According to polling done by the Bipartisan Policy Center, 37% of unemployed Americans would be more likely to go back to work if they received some form of paid family leave. Along with that, 58% of employees who have reduced their hours would be more likely to increase their hours if their employer offered them paid family leave.

“In today's current environment where we have lots of jobs open and have lots of people who are still unemployed, it is in many situations caregiving that's holding them back,” Schweer said.

While the United States is one of the only wealthy countries to not have a paid leave program, that is likely to change due to the program's popularity with the majority of Americans and that it could be a tool to jump-start the U.S. economy.

“You know existing research really indicates that a lack of universal leads in the U.S., just further exacerbates issues around race, gender, access to health care, and income-based equalities,” Buonincontri said. “And I mean if we're going to really move forward as a nation and there's no research to say that that's true I don't know why we wouldn't consider something like that.”