A new proposal from DC Council Chairman Phil Mendelson for paid family leave would allow workers to care for their families at critical times in their lives, while having virtually no negative effects on DC’s economy. Indeed, paid family leave could help DC’s economy, by allowing more women stay in the labor market and by making DC a more attractive place to work for people in the Washington area. Paid Family leave would be an important help to DC residents, since two-thirds of working DC residents have a job in the city.
Under the new version of the bill, new parents would receive up to 11 weeks of paid leave per year to care for and bond with their child. This is important because research shows that 10 weeks or more of bonding time is crucial to maternal and infant health. Other workers would receive up to 8 weeks of paid leave per year to take care of a sick relative, including a spouse/domestic partner, child, parent, or grandparent.
The proposal includes a 90 percent wage replacement rate for low-wage workers to ensure they are able to take paid leave. Because low-wage workers always face stretched budgets, many cannot afford to take leave without a high wage replacement rate. In a city with dramatic income inequality, ensuring that paid family leave reaches the lowest-paid workers is critical.
The good news is that paid family leave will help DC in important ways, without hurting the DC economy, according to a thorough economic impact analysis by the DC Council Budget Office:
- Women’s labor force participation in the District would increase.
- The District’s infant mortality rate would decrease.
- Paid family leave is “unlikely to alter the current upward trajectory of the District’s economy.” The Council Budget Office concludes that under paid family leave, DC’s economy will be at least 99.9 percent as large as it would be without adopting this program.
There are several reasons that imposing a new payroll tax on employers to fund paid family leave will not harm—and could even benefit—DC businesses. First, it is likely that the canadian online casinos tax on businesses will be passed on to workers, at least in part, because many workers would be willing to take a lower starting salary or lower pay increases. For a worker making $50,000, fully absorbing the tax would mean making $310 less, in return for a tremendous fringe benefit. Second, research shows that improving work conditions improves worker morale and reduces turnover. Finally, more DC area residents would want to work in DC if they can get paid family leave benefits not available in the suburbs. For these reasons, studies of the paid family leave programs in California, New Jersey, and Rhode Island, have found that the benefit has either a negligible or positive effect on businesses’ profitability and performance.
DC’s program will help the large majority of DC workers, since two-thirds of working DC residents work in the city. “Reverse commuters,” or District residents who work in Maryland or Virginia, are not covered. The program could cover even more District residents if the proposal were changed to allow reverse commuters to opt into the program as well.
Opponents argue against paid family leave because it would cover Maryland and Virginia residents working on DC. But it would be unprecedented if DC employers provided one set of benefits to their employees living in DC and another to suburban residents. Further, by covering DC’s entire private sector workforce and creating the largest pool of coverage, we actually reduce program participation costs, making the current bill’s coverage scheme the most affordable—and most equitable—way to provide a much needed benefit to DC businesses, residents, and workers.
Paid Family Leave Is Better for DC Workers than “Employer Mandate”
The Council’s Paid Family Leave proposal is designed to cover as many DC residents as possible, and to be available to low-wage workers as well as higher-paid residents. In contrast, the “employer mandate” proposal, which would require employers to provide 8 weeks of leave to some workers, would cover a smaller share of residents and would be discriminatory to low-wage workers.
The difference is that the employer mandate proposal would not cover workers until they are on the job a year or longer. Yet many low-wage workers move in an out of the job market, due to both personal reasons — such as a single parent needing to care for an ill child — and because they work in industries marked by high turnover. Nationally, the turnover rate in retail is 56 percent annually, while the turnover rate in food service is 72 percent, according the Bureau of Labor Statistics.
If one key principle is that, in an economically divided city, all workers should benefit from paid family leave, the employer mandate is inferior to the Council’s proposal.
Also, the employer mandate could be economically disruptive to small businesses. If a worker making $500 a week takes 8 weeks of leave, the employer would have to pay $4,000. Under paid family leave, by contrast, the employer would pay $161 a year.
Paid family leave is urgently needed in the city—especially for our most vulnerable and part-time workers. DCFPI urges the City Council and Mayor to pass the paid family leave bill quickly so that families can start benefitting.
