It would be one of the largest expansions to the U.S. social safety net in decades — a new federal paid leave policy for all workers.
That’s what President Joe Biden is expected to propose on Wednesday night when he rolls out his $1.8 trillion spending and tax credits plan to remake the country’s economy after a devastating year.
The national paid family and medical leave program would cost around $225 billion over a decade, and the White House says it would be mostly paid for by upping taxes on the wealthy.
Within 10 years, Biden’s plan would guarantee workers 12 weeks of paid leave, which they could use “to bond with a new child, care for a seriously ill loved one, deal with a loved one’s military deployment, find safety from sexual assault, stalking, or domestic violence, heal from their own serious illness or take time to deal with the death of a loved one,” according to an outline released by the White House.
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Workers could get up to $4,000 a month during their leave, with at least two-thirds of their average weekly wages replaced. The lowest-wage workers would get 80% of their prior earnings. Biden’s plan would also give workers three days of bereavement leave per year, starting in year one. Grief has been a major theme of Biden’s presidency, with him speaking often about losing his son Beau to brain cancer at 46.
The president is also calling on Congress to pass a bill that would require employers to give workers seven paid sick days a year.
Currently, companies with 50 or more employees are required to provide up to 12 weeks of unpaid time off, thanks to The Family and Medical Leave Act of 1993. But the U.S. is one of the only countries that doesn’t guarantee workers paid time off when they’re having a new child or dealing with an illness.
In Japan and Norway, new parents get more than a year’s worth of paid leave.
Why is the U.S. different than other countries? “We have historically had low taxes and a skimpy safety net,” Brookings Institution senior fellow Isabel Sawhill said.
For the same reason — opposition by businesses — the U.S. doesn’t have universal health care, City University of New York sociologist professor and labor expert Ruth Milkman said.
“They are allergic to any government intervention in the labor market,” Milkman said.
The vast majority of American voters — around 80% — support the idea of a national paid leave program.
But while Americans want access to paid family and medical leave, “a government program isn’t the solution,” according to The Heritage Foundation research fellow Rachel Greszler.
“Most would much rather receive flexible and accommodating policies through their employers than to have to deal with government bureaucrats and the constraints of a one-size-fits-all government program,” Greszler said.
In the absence of a federal paid leave policy, some states — including California, New Jersey and Rhode Island — have instituted their own programs to compensate workers who take time off.
But with most workers at the mercy of their employer’s policy, fewer than one in five have access to paid family or parental leave. Meanwhile, fewer than half are offered paid medical leave. The access is even rarer among people of color and low-income workers.
“Too many people have been forced to make an impossible choice between the income they need and the families they love because they have no paid leave,” said Ruth Martin, senior vice president at nonprofit advocacy group MomsRising.
“It’s become an even more devastating problem during the pandemic, which has sickened millions, pushed hospitalizations to unprecedented levels and forced even more people to take time off to care for relatives with Covid-19,” Martin said.
By one estimate, the typical working age adult loses more than $9,500 after taking 12 weeks off without pay.
A national paid leave program would likely be financed by payroll taxes, similarly to how the unemployment system is funded, said Sawhill of the Brookings Institution.
As it designs its policy, the federal government should take lessons from the states that offer paid leave, Widener University professor Linda Houser said.
“One of the many intriguing elements about the state paid leave laws is how they are paid for,” Houser said. “Most of them are funded primarily through employee premiums.
“In some cases, both employees and employers contribute,” she added. “As with other social insurance programs in the United States and elsewhere, the idea is that everyone pays in.”
Another feature of the state programs that the federal government should study is how they’ve found a way to include the growing ranks of freelancers, gig-workers and self-employed people, Milkman said.
“It’s quite inexpensive, so self-employed and gig workers opt-in by just paying the tax, just as some do with Social Security,” Milkman said. “In these programs, it’s an insurance model.
“If you pay the tax, you can make a claim if a covered event, like a new baby, occurs.”
While certain paid leave policies have the support of Republicans, they oppose Biden’s plan to raise taxes to fund the program. That could make passage of such legislation difficult, though Democrats could also use the budget reconciliation process to institute paid leave.
That avenue allows them to pass legislation with a simple majority, which is all they have. Other bills typically must garner 60 votes to advance, thanks to Senate procedural rules. The next budget reconciliation process will likely be in the fall.
“Paid leave certainly has budget implications so it can go through the reconciliation process,” Martin said.
Has a lack of paid family or medical leave adversely impacted you? If you’re willing to share your experience for an upcoming article, please email me at annie.nova@nbcuni.com
Source: Business - cnbc.com
