Paid Leave Will Leave You Holding the Bag
DEMOCRATS see your paycheck as fair game for their endless social-improvement projects. Every Democrat vying for the White House backs federal legislation that would guarantee workers nearly three months of paid family medical leave every year. Sounds wonderful. We all favor caring for newborns and sick relatives. And working nine months while getting paid for 12 will appeal to many voters. The issue is who foots the bill for paid leave. These pols want to force you to pay with a hefty federal payroll tax.
That’s bad news for single guys who are unlikely to take leave but will be taxed anyway. Ditto for older people who have already raised their kids and don’t want their paycheck shrunk to fund someone else’s parenting. It’s also a raw deal for employees who already get paid leave on their job. They’ll have their paychecks shaved anyway. To see how a good idea — help for families — can be made truly unfair, look at laws being passed in several states controlled by Democrats.
In the last six weeks, Oregon and Connecticut enacted laws entitling workers to 12 of weeks paid leave yearly. Not just when a baby is born, but also to care for grandparents, even close friends with no blood relation. All funded by taking a bite out of all workers’ paychecks.
New York and several other states already passed similar laws. New York’s law, signed by Gov. Cuomo in 2016, recklessly empowers the state to deduct from paychecks whatever the amount needed to keep the leave program afloat.
These laws also hit hard small enterprises like diners and local stores. The Connecticut law is “likely to ruin some small employers,” predicts Yankee Institute President Carol Platt Liebau.
Last week, Democratic lawmakers in New Hampshire and Vermont similarly tried to mandate paid leave, but their states’ Republican governors stepped in to stop the drive to fiscal madness.
To be clear, Republicans aren’t against caring for family. In Congress, support for paid family leave is bipartisan. The big divide is who pays for it.
Most Democrats support the Family and Medical Insurance Leave Act, whose backers preposterously claim a minuscule 0.4 percent payroll tax, divided between employer and worker, will be enough to fund paid leave. Don’t believe this fairytale math. It assumes no more people will take leave once it’s paid for than take it now.
A realistic estimate by labor economist Ben Gitis of the conservative American Action Forum shows the tax would have to be at least 2.9 percent. Ouch.
Of course, we all know coworkers who will abuse paid leave bigtime, claiming to have a sick friend to get a three-month paid time off on your dime. The best way to discourage this is to require people taking leave to have skin in the game.
A plan sponsored by Sen. Marco Rubio of Florida does that. Workers who want paid leave can borrow against their own future Social Security benefits. A young mother could take two months of paid leave in exchange for delaying her retirement benefits for a month decades later. The math works, because benefits collected early in her working career are likely to be smaller than retirement benefits collected after her peak earning years.
This sound idea originated with the Independent Women’s Forum, but predictably Democrats are bashing it because instead of raising taxes, it makes workers pay their own freight.
Politicians are using paid leave to woo women voters. But beware the downside. Countries that guarantee the most paid leave have the widest gender pay gaps, according to Pew Research. Employers compensate by promoting fewer women.
Democrats say no one should have to choose between getting a paycheck and taking care of loved ones.
Don’t be misled. The real choice is whether you can keep your paycheck to benefit your own family or have to surrender it to pay for liberal pipe dreams like “free” medical leave, “free” college and other freebies.
‘ Countries that guarantee the most paid leave have the wide st gender pay gaps, according to Pew Research. Employers ’ compensate by promoting fewer women.