January 16, 2015

Free Stuff Isn’t a Right

Democrats add to the list of workers’ “rights,” but who pays for it?

The Democrats’ economic platform continues to take shape as this week they take up the cause of paid family and medical leave. It’s all fine sentiment, though someone has to ask: Who pays for it? That’s why it’s savvy politics.

Barack Obama signed a memorandum Thursday guaranteeing six weeks of paid sick leave for federal workers to take care of a new child or an ill family member, even if workers have not accrued that much time off. He went on to claim that workers in the private sector should be afforded the same opportunity.

White House Senior Adviser Valerie Jarrett also pushed for an expansion of paid leave for workers. “The fact is this is not a partisan issue,” she said. “Adopting polices that are good for working families is both good for business and good for workers.”

In a couple of well-crafted sentences, Jarrett took a policy that used to be decided by private sector employers, elevated to it a federal government issue, and arbitrarily decided this is good for business. It’s not, but more on that later. This is a classic leftist maneuver to reframe the economic discussion in a manner that is beneficial to Democrats. By labeling paid sick leave as a “right” rather than a benefit, they can more easily label anyone who opposes their proposal as an ogre who doesn’t care about families.

As always, Democrats are looking to position themselves as champions of the middle class, particularly ahead of the 2016 election. They have the class warfare playbook firmly in hand, and they’re going to run it step by step. Obama’s offer of “free” community college and congressional Democrats’ latest income redistribution proposal were just the opening screen pass.

The paid leave proposal has been circulating for months, with Labor Secretary Tom Perez rarely missing an opportunity to mention it. The AFL-CIO is also a big proponent. Both repeatedly use a statistic pulled from an International Labor Organization survey that the U.S. is the only developed country in the world that does not mandate paid maternity leave. Jarrett also noted that 43 million private sector workers in the U.S. do not have any form of paid sick leave.

To read these factoids alone, one would be lead to believe that the U.S. is peppered from coast to coast with sweatshops reminiscent of a Charles Dickens novel. But Perez and Jarrett make no mention of just how many of those workers are part-timers or day laborers who rarely receive such benefits. They also seem to forget that virtually every large employer has these policies in place, and many small businesses prefer to handle long-term absences on a case-by-case basis. Of course, the Obama administration would prefer that freedom came to an end. After all, the federal government knows best.

The push for mandatory paid sick and maternity leave has begun in Congress, too. Rep. Rosa DeLauro (D-CT) and Sen. Kirsten Gillibrand (D-NY) introduced the Family and Medical Insurance Leave (FAMILY) Act to create a national paid family and medical leave insurance program. The administration also proposes $2 billion in the new budget to help states develop similar programs. Currently only California, New Jersey and Rhode Island offer statewide paid sick leave.

Republicans will be cast as the villains in this battle because they will be the only people to raise the question of how we’re going to pay for it. Like free college, free health care and free wage bonuses, someone somewhere is ultimately going to shoulder the burden for the cost. Ironically, it will likely be the very same middle-class taxpayers the paid leave plan is supposed to benefit.

The National Federation of Independent Businesses panned the proposal. “Our members are opposed to it because of real costs,” said spokesman Jack Mozloom. “And in a philosophical sense, they’re opposed to it because they don’t want the government telling them what to do.” He also noted what should be obvious: When a worker is out due to illness, “The work still has to get done.” In other words, there is a real productivity cost that must be considered.

Democrats have pushed a number of statistics and polls claiming the public is behind them on this issue. With the wind at their backs, they believe they have a political winner. A lot of people supported the latest minimum wage hike too, according to their figures, and look what happened. The federal proposal fizzled and Democrats were crushed at the polls.

The minimum wage is a great example of skewed Democrat economic thinking. James Pethokoukis of the American Enterprise Institute cited a VoxEU study of the impact of the minimum wage in recent years that Democrats would prefer you didn’t see. According to the study, while the minimum wage increased 30% in the late 2000s, it reduced adult employment by 0.7%, amounting to 1.4 million workers, nearly half of whom are age 15-24. The minimum wage raises also reduced average monthly incomes for low-skilled workers by $100 over the first year and $50 over subsequent years. As Republicans stated repeatedly, the effect of a top-down mandate on wages was exactly the opposite as intended.

If you need further proof of the damage Democrat policies have done to American business, you can look at a recent Gallup study pointing out that “business deaths now outnumber business births” for the first time in 35 years. “Until 2008, startups outpaced business failures by about 100,000 per year,” writes Gallup CEO Jim Clifton. “But in the past six years, that number suddenly turned upside down.”

So, while Democrats proudly proclaim a whole list of new “rights” for workers that becomes ever more expensive, the number of businesses that can actually employ those workers continues to shrink. This cannot be a coincidence.

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