How paid work leave could lead to more negative outcomes for those that need it the most

MADISON, Wis. - Paid Medical Family Leave Would be Offered Under New Democrat Proposal -

Wisconsin employees would be eligible for paid time off under a new proposal at the Wisconsin State Capitol
The Democratic bill would provide participating employees in Wisconsin up to 12 weeks of paid leave to care for a new child, to treat a personal illness or to care for an aging or sick family member.
The bill's authors said the program would not cost the employers any money and instead, be paid for completely by the employees themselves. Employees would contribute a certain percentage of their paycheck into a trust fund.

So they want you to start a savings account?

The basic idea behind this proposal is that it will work as a kind of unemployment insurance. Since it's voluntary, the problem is simply that a lot of people won’t pay into it. Actually, only the people who are at the highest risk for using it will pay into it.

This only works at about 10% of the participants using it. After that, it would be in the negative. If 15% of the participants use it every year, then it would be running in the negative every year. Plans like this only incentivize people who are likely to use it, to opt into it. If you are unlikely to use it, you’d be better off putting your own money into your own account, because then you could get it back in the case that it isn’t used. .

It’s literally the same thing as crafting an insurance plan for people that know for sure they are going to need insurance. Insurance is to protect against unlikely risks, not certainties.

The Wisconsin Democrat’s proposal would only work if they force everyone to pay into it. Lawmakers knew that when they crafted Obamacare in 2010, by the way. You needed all of the healthy people that weren’t going to use the system to cover those that were going to use the system.

The situation with paid leave is even more tricky.

Sure, maybe the business owner doesn’t have to “pay out” for it, but they still have to replace you for the 3 months that you are gone. What happens if you are actually very important in your workplace?

My wife works in a position at HCA that would not be easily replaced. They’d have to train someone for months to take over for her while she’s gone, because the hospital simply couldn’t go on without her. Well it could, they just might lose a lot of money, or make poor long term decisions. Those options would be detrimental to the financial health of the hospital, and thus detrimental to the health of the patients.

It’s not as cut and dry as it sounds. Business owners, managers, etc., will take this into account when hiring people. I’m not saying that it’s fair, but it is the way a business works. If you have a 25 year old male, and a 25 year old female applying for the same job, and they are both equally qualified, what is to be the deciding factor in your hiring choice? This gives you one. The male will be much less likely to take a 3 month leave. Unfair, maybe. But that doesn’t make it false.

Extreme example: Just imagine if you were extremely important at work. Let’s say you had one person tasked with making sure a nuclear reactor didn’t overheat. That one person trained for 2 years, and then they had to make sure nothing bad happened. If they miss work, it’s all over for everyone inside, and the people they serve in the area. When the company hires someone to do this job, do you think the possibility of a worker needing to take 3 months off later in the year would be a deciding factor on the job?

What if you are the only decision support for the CFO of a major hospital, and that person needed you to pull information before they made any big decisions? Do you think the CFO would consider whether or not you will have to leave for 3 months later in the year?

I’m not saying employers shouldn’t find a way to offer paid leave.

It would be great if every business could get to the point that this would be financially viable. The fact is, it will be financially viable for some, but not all. Plans like this help employees that work for large corporations, at the expense of the small corporations that can’t afford it.

Similar to a high minimum wage, some businesses simply cannot afford to do this. The problem with a minimum wage is that it says “All businesses must afford to do this,” while it simply isn’t true. It doesn’t mean that it isn’t a moral or virtuous endeavor, but it cannot be a blanket rule for all businesses that they must be able to afford this. What if you have a smaller size business that only has one person occupying each important position in the company? What are you to do when that person leaves? Something that is emotionally true is not automatically economically true.

Is this fair? No. But no one ever said that life was going to be fair. If you provide a valuable service to someone, it’s not a given that nothing bad will happen to the business if you leave the job suddenly, for months on end. Maybe you aren’t that important at your job, and you can be easily replaced, but there are a lot of jobs occupied by people that cannot be replaced. Those are the ones I’m worried about.