To: Mr. Barack Obama, President of the United States of America

POLICY MEMORANDUM

To: Mr. Barack Obama, President of the United States of America

From: Ms. Katie Roberts, RN, New York Presbyterian Weill-Cornell Medical Center

Re: Paid Parental Leave in the United States

Date: December 3, 2015

EXECUTIVE SUMMARY

The lack of paid parental leave in the United States places our country behind all other industrialized countries on the globe. It highlights our failure to support the American family as well as our failure to keep up with the evolving workforce. This memo outlines the problem at hand, highlighting the impact it has on promoting gender inequality and income inequality as well as its negative effects on women and children’s health and the economy. Both conservative and progressive policy options are outlined and evaluated on their prospective effectiveness in remedying this issue. The memo concludes with final recommendations that take into account both the severity of the problem as well as the restrictions inherent to the current political climate.

INTRODUCTION

The United States of America is currently the only industrialized country in the world that does not guarantee national entitlements to paid parental leave (See Appendix A). Not only does the United States lag behind other countries, but we also fail to meet international standards. Without this, mothers and fathers have limited access to paid time off of work to care for a newborn.

The International Labor Organization sets a standard of a minimum of fourteen weeks of paid maternity leave for mothers, as well as paid benefits that are not less than two-thirds of the woman’s previous earnings (2000). As you know, the only national legislation we have in place is the Family Medical Leave Act, which only allows for twelve weeks of unpaid leave. However, due to the eligibility requirements, only sixty percent of the labor force in the United States receives protection under this statute [See Appendix B] (Klerman, Daley, & Pozniak, 2012, p. 21). In addition, only thirteen percent of workers have access to paid family leave through their employers, and fewer than forty percent have access to leave through employer provided short term disability insurance (National Partnership for Women and Families, 2015). Only three of our fifty states guarantee paid family leave, yet even these states only guarantee four to six weeks, with varying amounts of payment; California only offers fifty five percent wage replacement (Wisensale, 2006). Washington D.C. has most recently announced a bill that would guarantee workers of the district sixteen weeks of paid leave with generous reimbursements (up to one hundred percent of wages for workers making up to $52,000 a year) (Davis, 2015). It is yet to be determined if this bill will pass, or the amount of success it will have, but the D.C. proposal marks one of many signals that the country is ready for change.

While I commend your recent efforts to provide paid sick leave to federal employees and to promote state action through the State Paid Leave Fund, this is simply not enough. Access to paid family leave should not be dependent on where one lives or for whom they work. The United States needs nationally mandated paid family leave in order to meet international standards, address gender and economic disparities, improve breastfeeding rates, early childhood development, and maternal health, and promote economic prosperity.

THE PROBLEM

The lack of paid parental leave in the United States promotes gender inequality and economic disparities, discourages breastfeeding, early childhood development, and maternal health, and has high economic costs for businesses and the country at large.

Gender Inequalities

It is general knowledge that despite advances in women’s equality, women are still largely disadvantaged and under-represented in the workplace, and they receive less pay than men. Adding paid parental leave can help reduce inequalities in two ways. First, it can keep women in the workplace and improve their workplace capital. Second, it can allow for the sharing of childcare responsibilities, which would subsequently diminish the impact of traditional gender roles and discrimination. Policies that specifically delineate time for women and time for men especially promote the use of paid leave time for men.

With unpaid leave, women are more likely to take time off than men. Since men typically make more money than women, it would be less costly for the woman to take unpaid time off of work. However, this unpaid leave damages the prospects for women in the labor market if they take more time off than men and lose their labor capital. Women are more likely to return to work if offered maternity leave and that maternity leave does not cost them significantly in wages or in employment prospects (Hanel, 2013). In fact, one study found that “women who report leaves of 30 or more days [were] 54% more likely to report wage increases in the year following the child’s birth than [were] women who [took] no leave at all” (Houser & Vartarian, 2012, p. 2). Not only does paid leave keep women in the workplace, but it also provides a mechanism for promotion and career advancement.

We can see from California’s paid leave program that simply allowing for paid leave increases the proportion of fathers taking leave. Between 2005 and 2013, the number of fathers filing for leave increased by more than four hundred percent (Employment Development Department of the State of California, 2014, p. 2). This trend towards both parents taking leave for the birth of a child will hopefully reduce gender discrimination against women in the labor market. Furthermore, a policy that allows for men to take time off to care for a newborn will help to counteract traditional gender roles by making it possible for parents to share childcare responsibilities. With a father managing some of the childcare, this would also allow for mothers to return to the labor market faster, ultimately doing less damage to their long-term career prospects and earnings.

Income Inequalities

With the way that parental leave is currently set up in the United States, low-income women and families are disproportionately disadvantaged. A policy of unpaid leave makes it especially hard for low-income families to take time off of work, because they are heavily affected by a loss in wages. Thus, they may not take time off at all, or do take some time off but for a very short period. Although some companies offer a form of paid leave, usually through a combination of sick time and vacation time, women and workers who are young, unmarried, or low-income are less likely to receive this aid (Waldfogel, 2001). A study by Sheperd-Banigan & Bell found that “paid maternity leave benefits were more generous for older, highly educated, privately insured, partnered and high income women. Women in these categories were more likely to receive paid maternity leave for longer periods at higher salary compensation levels” (2014, p. 289). Further, they found that eighty-one percent of women who reported that they didn’t stay at home as long as they would have liked cited lack of finances as the primary reason (p. 292). Even though it was set up to help families, parental leave is unavailable to the people who need it most.

The lack of paid leave options for already disadvantaged populations is a hindrance towards their prospects of economic mobility. As discussed earlier, a lack of paid leave damages labor prospects for women. With low-income women significantly lacking in paid leave, this is also having a negative impact on their labor prospects, more so than women who already have an advantage in the labor field. Not surprisingly, in California the growth in the use of paid leave has been especially large for minority and single women who don’t have a college degree (Rossin-Slater et al., 2013, p. 242). Implementing paid leave would be one necessary step towards battling income inequality and allowing for social and economic advancement.

Maternal Health and Breastfeeding

It goes without saying that the birth of a child is a momentous occasion for both a mother and father, and that the beginning weeks and months of a child’s life are incredibly important for its health and development as well as for the mother’s health and well-being. The short leaves that are supplied with both paid and unpaid leave, and the even shorter leave that is available for mothers who cannot afford to take unpaid time off, are not sufficient for both ensuring maternal health and promoting breastfeeding and childhood development.

Sheperd-Banigan and Bell note that a longer maternity leave is related to improvements in maternal mental health and vitality and role functioning. In addition it is associated with a higher rate of child immunizations, well-child visits, and longer durations of breastfeeding. They also found that a longer leave has the potential to reduce infant and child mortality, another area in which the United States is seriously lagging behind other industrialized countries (2014, p. 287). A review of the literature on a range of health outcomes including general health, intimate partner violence, mental health and physical health, found that there is an association between paid maternity leave and maternal health outcomes (Aitken, Z., Garrett, C.C., Hewitt, B., Keogh, L, Hocking, J.S., & Kavanagh, A.M., 2015, p. 40). Supporting paid leave supports women’s health, half the population of our nation.

Breastfeeding has been acknowledged by health organizations as the preferred method for feeding newborns. It is recommended to be the exclusive source of feeding for the first six months of life and complemented by other foods for the first year of life. Beyond the health benefits for newborns, breast-feeding reduces cancer risks for mothers and helps to increase child spacing, which can decrease prematurity and infant mortality rates. It costs both families and public assistance programs less money, and the healthier babies it produces results in less time parents need off of work to care for sick infants. It also helps the environment by decreasing waste from bottles (Calnen, 2007, p. 41). The benefits are numerous and undeniable, yet the leave system we currently have is not enough to promote breastfeeding, and the United States consistently falls short of its Healthy People objectives (Calnen, 2007, p. 34). There is a consistent correlation that the longer a woman has away from work, the longer her duration of breastfeeding will be. If she has to return within the first six weeks she may opt to not even initiate breastfeeding at all (Calnen, 2007). Promoting a longer leave and allowing women to take a longer leave by providing them with financial support will help us reach our goals and improve our country’s health, economy, and eco-system.

Economics

It is likely that the biggest hurdle towards getting adequate parental leave is deciding and finding consensus on how much funding is needed and where the funding will come from. However, not only is unpaid leaving costing us, paid leave can benefit us and at a relatively low cost.

On an employer level, California has found that paid family leave has not had the negative outcomes that some expected. Paid leave makes it easier for employees to take time off, but it also makes it easier and more likely that they will come back, reducing turn-over rates and costs for employers. Eighty-nine to ninety-nine percent of employers say that paid leave has either had no effect or a positive effect on productivity, turnover and morale, and profitability. Eighty-seven percent claim it has not increased costs, and nine percent have saved money due to decreased turnover or benefit payments (Miller, 2015).

On a national level, paid leave can greatly decrease the expenditures our country faces towards public assistance and food stamps. Compared to those who return to work with no leave, women who return after a paid leave are forty percent less likely to use food stamps, and thirty-nine percent less likely to require public assistance. Likewise, men who use paid leave also have statistically significant reductions in use of these forms of aid (Houser & Vartanian, 2012). In addition, it reduces the pressure on women to choose between work and a family, and will hopefully turn around our dwindling birth rates. This, in combination with its potential to decrease infant and child mortality rates, can help to support our population growth and subsequently our social security system.

Lastly, this type of program will not cost our country, citizens, or corporations large amounts of money. Calnen (2007) used data from the Congressional Budget Office (CBO) report on paid family leave for civilian employees of the federal government to determine that a fourteen week paid leave (offered to mothers only) would cost employees only .4% of their average salary, and cost employers .4% of the total payroll. This is an overestimate due to the inclusion of older women who will likely not benefit from the program but who would contribute to it. Further study needs to be done regarding a paid leave available to both women and men, yet these initial calculations are promising. Proposed national legislation mirrors these low costs, calling for a tax of only two-tenths of one percent of an employee’s wages (National Partnership for Women & Families, 2015).

POLICY OPTIONS

Moving forward towards more inclusive and extensive paid family leave, there are two routes available to you as President. As with most, if not all issues, it comes down to whether or not you should proceed with a more conservative approach of expanding and building on current programs and legislation or a more aggressive approach of instituting brand new policy. These two alternatives are outlined below.