Nearly 75 percent of American children live in households with working parents and no stay-at-home mom or dad. That means that the vast majority of parents would need to take time off work to take care of sick kids or care for a newborn. Unfortunately, that percentage doesn’t match up with the percentage of workers who actually have paid family leave. As of 2011, only 11 percent of the private sector and 17 percent of the public sector could take time off from work to care for a sick child without losing pay. The rest have to cobble together what’s left of their vacation or sick days or lose out on a paycheck. America’s lowest-paid workers – those who would be most vulnerable to a missed paycheck – are the least likely to have access to this protection.
According to a recent Rutgers Center for Women and Work study, offering employees paid family leave has strong positive effects – not just on the employees and their families, but on businesses as well.
Paid family leave has obvious positive financial implications for its employees. In the short term, women in particular maintain a steady income while they take time off to care for a sick child or bond with their newborn. They can provide parental care to their children while still financially supporting their families. In the long term, women who take paid family leave are more likely than non-leave takers to still be working 9 to 12 months after their child’s birth.[i]
“Paid family leave has protective effects on pre- to post-birth wages for women, increasing the likelihood of higher post-birth wages by 54 percent, relative to women who take no leave at all.”[ii]
Additionally, both men and women who return to work after a paid family leave are significantly less likely to receive public assistance or use food stamps in the following year.[iii] By contrast, almost 10 percent of workers who take unpaid family leave use some form of public assistance during that leave.[iv] That means that taxpayers are ultimately subsidizing family leave instead of the employers.
Employees aren’t the only ones who benefit from paid leave - there’s evidence that employers would also benefit from providing paid family leave. “A Census report released in 2011 highlights the value accrued to employers when women return to the labor force after pregnancy: 80 percent of mothers who returned to work within 12 months of their child’s birth returned to the same employer, and 69 percent had no change in pay or hours worked.”[v]
Employers who offer paid family leave can expect a more stable and loyal workforce, and don’t suffer the very real costs of a high turnover rate. Results from California’s successful paid leave program also indicate that paid leave correlates with higher worker productivity. Nearly 90 percent of surveyed businesses said that the paid leave program had “either a positive effect on productivity or no noticeable effect.”[vi]
Providing paid family leave is a smart pro-business, pro-worker and pro-productivity policy. It’s time for a 21st-century workplace to match up with our 21st-century workforce.
[i] See note i.
[ii] Houser, Linda and Vartanian, Thomas P. (January 2012). Pay Matters: The Positive Economic Impacts of Paid Family Leave on Families, Businesses, and the Public. The Center for Women and Work at Rutgers. Available at http://smlr.rutgers.edu/paymatters-cwwreport-january2012
[v] See note i.
[vi] Milkman, R., & Appelbaum, E. (2014). “Low-Wage Workers and Paid Family Leave: The California Experience.” In What Works for Workers?: Public Policies and Innovative Strategies for Low-Wage Workers (p. 305). New York: Russell Sage Foundation Publications.