SUPPORTING FAMILIES IS AN INVESTMENT IN HUMAN CAPITAL Part 1

ABSTRACT: Parents with a child under 18 years of age make up over 22% of the of the US labor force. These parents represent an important part of the human capital of our economy, and their children represent the human capital of our future economy. Therefore, supporting these families with paid leave when a new child arrives is an investment in our current and future human capital. The US is one of only three countries in the world that does not require paid parental leave.

Many mothers return to work very shortly after the birth of their child: 23% return to work within 2 weeks of having a child. A quick return to work is unhealthy for both the mother and the child, but many families need the income to make ends meet.

Some states and cities in the US have adopted paid family leave programs. Despite employers’ dire warnings at the time of their enactment, a recent study found that that these paid leave requirements have not hurt profitability, productivity, or turnover.

It’s time for the US to catch up with the rest of the world and do what’s only humane for our families and children, require paid parental leave when a new child joins a family. This would be a step toward implementing genuine family values for America’s families. Paid family leave has been shown to work – it benefits children and families substantially, while it has no negative effects on employers and may actual benefit them.

FULL POST: Parents with a child under 18 years of age make up over 22% of the of the US labor force. In these families, 93% of fathers and 70% of mothers work. [1] In 60% of these households, both parents are working, and this is only slightly lower for families with a child under 1 year old. [2] These parents represent an important part of the human capital of our economy, and their children represent the human capital of our future economy.

Therefore, supporting these families with paid leave when a new child arrives is an investment in our current and future human capital, no less so than education and job training. If our society truly values families, we will support them with paid family leave. (See my post Big ideas to help working parents for a set of policies, including paid leave, that would help working families.) The US is one of only three countries in the world that does not require paid parental leave. (The other two are Papua New Guinea and Suriname.) Some Scandinavian countries offer over a year of paid parental leave.

Only 13% of US workers have access to paid family leave and they are typically highly paid, salaried employees. The federal Family and Medical Leave Act (FMLA) provides 12 weeks of unpaid leave but only for the roughly 60% of US workers that are at companies with over 50 employees and who have been at their current job for over a year. However, many of the eligible employees cannot afford to go 12 weeks without pay and therefore don’t take the FMLA leave.

Many workers – usually mothers – stitch together vacation time, sick time, and personal days to take time off at the birth of a child. Some buy disability insurance policies that cover maternity leave. Some take unpaid leave or quit working, but many mothers return to work very shortly after the birth of their child: 23% return to work within 2 weeks of having a child. [3]

A quick return to work is unhealthy for both the mother and the child. In particular, mothers who take longer maternity leaves are less likely to experience depression. Mothers who go back to work sooner, breastfeed their children less, which leads to increased illness, obesity, allergies, and even sudden infant death syndrome in their children. Shorter maternity leaves also can negatively affect the child’s development of motor skills, social skills, and language. A study in Europe found that paid leaves and longer paid leaves were correlated with a decrease in the death rate for young children, especially infants under 1 year old.

Some states and cities in the US have adopted paid family leave programs. California’s has been in place since 2002 and New Jersey’s since 2008. Despite employers’ dire warnings at the time of their enactment, a recent study found that that these paid leave requirements have not hurt profitability, productivity, or turnover. Other studies have found that paid leave and workplace flexibility for parents increase productivity, profitability, the ability to recruit talented workers, and the stock performance for companies; improve job satisfaction and work-family balance for workers; and reduce absenteeism, turnover, and worker replacement costs for employers. [4]

The Obama administration has recently announced grants to help states establish paid family leave programs and a number of the 2016 presidential candidates, notably Hillary Clinton and Bernie Sanders, have put forth strong proposals for paid family leave.

It’s time for the US to catch up with the rest of the world and do what’s only humane for our families and children, require paid parental leave when a new child joins a family. This would be a step toward implementing genuine family values for America’s families. It’s also an investment in the human capital of our current and future workforce. Despite employers’ dire warnings about its impacts, paid family leave in other countries, as well as in states and cities here in the US, has been shown to work – it benefits children and families substantially, while it has no negative effects on employers and may actual benefit them.

[1]       Bureau of Labor Statistics, 4/23/15, “Employment characteristics of families,” US Dept. of Labor (http://www.bls.gov/news.release/famee.nr0.htm)

[2]       Council of Economic Advisers, June 2014, “Nine facts about American families and work,” Executive Office of the President of the United States (https://www.whitehouse.gov/sites/default/files/docs/nine_facts_about_family_and_work_real_final.pdf)

[3]       Lerner, S., Aug. 2015, “The real war on families,” In These Times

[4]       Council of Economic Advisers, June 2014, see above

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