Republicans and Democrats met earlier this week to move forward in developing a paid family leave plan for American families. Paid family leave has bipartisan support, but that’s where the agreement ends. Specifics on implementation vary by party, with each introducing what they think is the best and most sustainable plan to bring this benefit to American workers.
The U.S. has lagged behind other modern, developed nations when it comes to benefits programs like paid family leave. Among 41 of our contemporaries, the United States ranked last in providing paid family leave benefits with zero days, according to a PEW Research Center article. Other nations provide anywhere from 2 months in New Zealand to over a year and a half in Estonia.
The hearing was held by the Senate Finance Committee’s Subcommittee on Social Security, Pensions and Family Policy and was chaired by Senator Bill Cassidy (R-LA).
Two main proposals were introduced, one from each party. Here’s a breakdown of the two plans.
.@IvankaTrump attends Senate hearing on paid family leave … LIVE now on C-SPAN3 https://t.co/RGBxWxHmjI pic.twitter.com/8IQaNLSRW5
— CSPAN (@cspan) July 11, 2018
Republicans: Using Existing Benefits
Senator Joni Ernst (R-IA) introduced a plan that “reduces barriers that pose challenges to parents who are balancing work and family” by using social security benefits to fund paid family leave.
Her plan includes business interests and the economy as well. Senator Ernst highlighted that “working parents are, by definition, an essential part of many businesses.” Her proposed plan would forgo increasing taxes or expenses on businesses, as she believes that this would ultimately result in fewer jobs available in the workforce.
Senator Ernst also focused on low-income and hourly workers, who are less likely to have access to benefits like paid leave. One way that she proposes to bring those benefits to workers is to use social security benefits to ensure employees receive pay when taking leave to support the arrival of a child. Workers would have the option to receive their social security benefits and defer their retirement benefits.
“We are still working through the complexities, but I am hopeful we can craft a policy that will benefit most families and those who need it the most,” she said of her social security-based plan. She recognized the need to provide a fiscally conservative plan that would not place a large financial burden on either workers or employers.
The issue of paid family leave is critically important. pic.twitter.com/8gtNhBcSNX
— Joni Ernst (@SenJoniErnst) July 11, 2018
Democrats: A New Comprehensive Plan
Senator Kirsten Gillibrand (D-NY) brought forward new legislation, called the Family Act, that would provide guaranteed wages for workers to take time off to address the needs of their family.
The Family Act would bring the guarantee of paid leave at a small cost to workers and employers. The benefit would function similar to the existing social security infrastructure, with workers and employers paying into the benefits program, which would provide those benefits for employees no matter where they worked or if they changed jobs. “It’s about $2 per week, on average, for all employees” Senator Gillibrand said. This low cost would guarantee that workers are able to take leave with “about 66% of your wages guaranteed for up to 3 months, with a cap.”
It would also be applicable to all workers, both women and men. This offers the opportunity for this benefit to apply to those taking care of a new baby, adopted child, aging parent, injured spouse, or any other family emergency or care that may be needed. It also allows small businesses to provide the same level of benefits as bigger businesses. It helps small businesses, who may not be able to afford paid family leave benefits out of their own profits, to keep quality employees and to continue to grow. Senator Gillibrand said that the comprehensive nature of the Family Act ensures that small businesses and small states are able to bring paid family leave benefits to their workers as well.
“We are the only industrialized country in the world that doesn’t guarantee some form of paid leave,” she said. She pointed to the costs to the economy and the personal costs to workers, often women, who struggled to advance their careers while taking time off to deal with family obligations.
At some point, each of us will have a situation where we'll need to take time off of work to be with, and care for, our families. No working American should have to choose between their family and their paycheck. But today, many have to. It’s long past time for #RealPaidLeave.
— Kirsten Gillibrand (@SenGillibrand) July 11, 2018
Expert Testimony
Additional testimony came from experts in the fields of public policy, workplace benefits, and economics.
Dr. Andrew Biggs, former principal deputy social security commissioner in the George W. Bush Administration, supported a social security-derived benefit for paid family leave. His focus was on allowing new mothers to “remain attached to their prior jobs,” which keeps them on a trajectory that includes increased job skills, earnings potential, and career growth. He agreed with Senator Gillibrand’s point that there is a particular need to bring paid leave benefits to employees at small businesses and those who are self-employed.
He testified that the plan that offers the most viable solution is to allow workers to take social security benefits to pay for paid family leave. Taking early social security benefits ensures that workers maintain and grow their earnings potential, ultimately leading to increased social security benefits, according to a similar policy used in the state of California that Dr. Biggs cited as an example. He argued that other options, such as funding a plan through a payroll tax, compelling employers to provide the benefit, or setting up a savings plan option for workers would put an undue burden on workers or stifle economic growth.
At the National Partnership for Women & Families, Workplace Policies & Strategies Vice President Vicki Shabo agreed with the statistics presented about the importance of paid family leave but thinks that a social security-based plan does not provide the benefits that families need. She believes that the solution should include benefits for those caring for family members beyond just a new baby or to address their own medical emergencies. She called the Family Act a “moderate and reasonable approach” that was supported by the majority of Americans who were polled and that mirrors the successful approach taken by many states.
Carolyn O’Boyle, a managing director at Deloitte Services, a professional services firm, provided insight on how paid family leave operates at Deloitte. She spoke from a place of experience as well as leadership, as she herself took advantage of the firm’s paid family leave benefit when her own son was born. The program “provides up to 16 weeks of paid leave to eligible U.S. employees to support a broader range of life events,” to include parental leave as well as leave to care for a spouse, parent, or sibling. It supports both male and female caregivers within the benefits program. It also allows for flexible scheduling to ensure that the benefit is useful for employees.
Ms. O’Boyle outlined how the benefits program provided at Deloitte is good for business as well as workers. “Our experience over the past 21 months has shown our actual costs to be lower than we originally anticipated and we have already realized an improvement in attrition,” she said. The culture at Deloitte is an important component of their family leave policy and one that our government could emulate. “To put it simply, we do not want our people to leave the workforce due to caregiving needs at home,” Ms. O’Boyle said. “It’s our responsibility and commitment as an organization to ensure that our people don’t have to make that choice between family and career.”
A Bipartisan Solution
The representatives from both political parties and the expert panel acknowledged the important work that everyone invested in this issue to find a solution that will work for the American public. The overwhelming message that was communicated at the hearing was that the United States needs to address the lack of paid family leave for American workers.
“I’m glad to see that members of the House and Senate from both sides of the aisle are finally paying attention to this issue, recognizing that moms and dads across the country are trying to figure out how to ensure their babies are well cared for and nurtured in those precious first few weeks of life,” said Senator Ernst. Senator Gillibrand echoed these sentiments, recognizing the subcommittee leadership and Senator Ernst for their “interest in this bill and this debate we are having right now about how to produce a real paid leave plan.”
The solutions presented by each party had their merits and challenges, but all included the implementation of a national paid family leave program. In a political climate where legislators struggle to come to consensus on even the most basic issues, it was nice to see civility and a shared commitment to helping American workers rule the day at this hearing.
