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Katy Gooding plays with her baby.
Social Mobility Memos

What could really help the working class? Paid leave.

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President-elect Donald Trump has promised to improve the lives of America’s working class. Now he has the chance to deliver. Working class parents often face the unenviable choice between their jobs and spending time with their children, since the U.S. is the only advanced economy without a statutory right to paid parental leave.

During his campaign, Trump proposed 6 weeks of paid leave for mothers. This is the first time a Republican presidential candidate has included paid leave in his policy platform. So far, so good. But as usual, the policy design matters a lot.

Access to paid leave is lowest for low-wage workers

Workers need some time away from work for various reasons: a sick family member, personal illness, a new child. The federal Family and Medical Leave Act (FMLA) provides up to 12 weeks of unpaid leave for these purposes. But FMLA only covers large employers and their full-time employees – less than 60 percent of the labor force. Many employers offer their own formal paid leave policies, but access is limited, especially for low-wage workers:

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America’s lack of family-friendly policies, including paid parental leave, is one reason the female labor force participation in the U.S. lags behind that of many other advanced nations. Guaranteeing access to paid parental leave would improve women’s employment prospects and future wages, encourage fathers to spend more time with their children, and benefit children’s health and development.

Trump’s proposal is a start, but could be improved

Trump’s proposal would offer 6 weeks of maternity leave to new mothers, administered through the unemployment insurance (UI) program and financed by reducing fraudulent UI claims. Here are a few suggested improvements:

Authors

  • Include fathers. If the policy is to minimize the financial burdens of child care and improve child-parent bonding, fathers should get the benefit, too. Restricting the benefit to mothers could lead to hiring discrimination against women of childbearing age.
  • Offer more than 6 weeks. The shortest leave entitlement available to mothers in any OECD country is 12 weeks (Mexico) – double that offered by Trump’s plan. Even when adjusted to account for differing wage replacement rates across countries, 6 weeks looks pretty stingy:

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  • Use the payroll tax system, not UI. We are very skeptical that there is enough fraud in the existing UI system to finance Trump’s proposal. Every state with a paid family leave policy thus far has financed it (or plans to) through employee payroll contributions. This makes sense because employees are the ones who will ultimately benefit.
  • Build in job protection. Trump’s plan is, so far, silent on this provision. Without job protection, many workers will be dissuaded from using leave for fear of losing their jobs. At a minimum, job protections should be at least as good as those in the FMLA (which exempts smaller employers).

Let’s get it (mostly) right the first time.

The vast majority of Americans support paid family leave and it is encouraging that members of both parties have shown interest in the issue. A well-designed paid leave policy would show that the president-elect is serious about making America great for working parents, and their children.

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