Economy

Pros and Cons of Paid Family Leave

How do we balance taking care of workers with heavy regulation or spending future money?

Robin Smith · Feb. 5, 2018

What happens when America elects a president whose loyalty is to his base, not a political party or partisan doctrine?

You get an issue that’s moving through Congress, like paid family leave, promoted and pushed by a Republican business guy who wastes no effort on reconciling the policy with the principle of conservatism. That principle would naturally oppose tax money being spent for a service that not only has no constitutional enumeration but is more likely viewed as a new or expanded government program. Yet here we are.

While news accounts note that the U.S. is the “only industrialized nation that doesn’t offer family leave,” shame is not the way to create employment policy, just as envy is the worst way to drive economic and entitlement law. Granted, there is unpaid family leave ordered by law and offered in the U.S., but few, in a day with so many living paycheck to paycheck, are able to live life unpaid for up to three months.

So why is a paid family leave program growing in acceptance within the ranks of the politically Center-Right? This argument is sound on multiple fronts, both in support of and in opposition to the same.

The current proposal that’s catching the eye of Donald Trump’s administration constructs the 12-week paid family leave program outside an employer mandate but within an existing government program set in place inside the Social Security Administration. Individuals wanting to benefit from the newly created U.S. family leave act will have their own Social Security funds spent toward the three-month leave. The projections are that such a decision to tap into government-held funds designated for the parent’s retirement would result in a six-month delay in retirement for each child covered in the program.

Contrasting a potential federally mandated program requiring employers to offer as a company-paid benefit or as a universally distributed taxpayer-funded entitlement, the draft legislation would allow those working parents who seek the weeks following birth or adoption a window of time for transition as working parents to use funds already being taken from paychecks. Remember, Social Security is funded from the wages of workers theoretically held for their retirement. This new use mobilizes a small sum from that fund for the purpose of family leave on a voluntary basis.

Some argue in favor of such an initiative because it assists those who both own and are employed by small businesses that do not offer lush benefit packages or could little afford such a benefit for new parents. According to U.S. Small Business Administration data, of America’s $17 trillion GDP, 28 million small businesses add $8.5 trillion to the overall economy employing about 53% of the total workforce. So, yes, small business owners and employees will benefit.

Others who support the proposal join Senators Mike Lee (R-UT) and Marco Rubio (R-FL), along with President Donald Trump’s daughter, Ivanka, who see that a birth rate in America, according to the Centers for Disease Control (CDC), that has more than 40% of children born to single mothers as a pathway to remain employed and off of welfare.

Yet, rightfully, the principled limited government crowd points to a long list of government programs that were drawn up to serve a limited scope and purpose only to expand, almost malignantly, over time to exceed not only their origins but their budgets. Think Social Security, welfare, Medicaid even aspects of federally controlled public education.

Other opponents might point to the already stretched Social Security program in dire need of reforms that will begin running deficits to its “trust fund” in 2020, paying out more for retirees than taking in from current workers to stay in the accounting black. Should nothing change within the program created in 1935, all funding and reserves will be completely depleted by 2034, not even two decades away, according to the 2016 Social Security Trustees Report.

So, in fairness, opponents to a voluntary paid family leave program fueled by one’s own Social Security fund have legitimate points of debate founded in principle and reality. Social Security’s got to see reforms and introducing a new way to spend the already tight revenues is not the best strategy. Further, the cynicism of taxpayers is absolutely founded in seeing a new government program that is easily amended and expanded past its well-intended aim.

Advocates, too, have a solid argument that, like work requirements for some entitlements, it’s always best to keep individuals in the workforce through a safety net measure rather than disincentivize work completely. Using one’s own Social Security in the early years, theoretically through uninterrupted employment, increases the long-term employee contributions into the fund.

As of this writing, there is no written bill, only proposals. An honest debate is needed, as are authentic solutions. Caution, however, must be our guide as the temptation grows to make government an institution that puts temporary band-aids on wounds of our own making through personal choices.

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