Paid Sick Days: Doomsday Predictions Are Wrong

May 02, 2011

Candace Howes

Eileen Appelbaum and Candace Howes
The Hartford Business Journal, May 2, 2011

See article on original website

Despite the predictions of business lobbyists in Connecticut, the latest research shows no foundation for claims that paid leave policies would be disastrous for the economy. In fact, new evidence published this year shows that paid leave has been a non-event for most employers, and for many, has even helped their bottom line.

In surveys of hundreds of employers in cities and states with paid sick days and paid family leave laws, researchers have found that the vast majority of employers report paid sick and paid leave policies have no effect or a positive effect on business operations. This research is borne out in interviews with managers and business owners.

Similar to the bill currently pending in the Connecticut legislature, San Francisco passed a sick days ordinance in 2006, enabling workers to earn paid sick days. The proportion of workers with paid sick days increased from 65 percent before the ordinance to 82 percent. A 2011 study found that most employers reported little difficulty in implementing it. Only a minority reported negative experiences with profitability (14 percent), customer service (2.6 percent), employee morale (1 percent), or predictability of absences (7 percent). Only a third of firms reported any difficulty administering the ordinance and nearly 70 percent of employers supported it.

For those who did mention short-term costs of paid sick days, researchers expect that these will be matched or exceeded over the longer term by reduced turnover, better health, more loyal and productive workers.

The U.S. is the only developed country with no national programs that provide workers with paid sick days to recover from illness or paid family leave to care for seriously ill family members or a new baby. In the absence of federal policies, states and cities have been enacting legislation to provide workers with family leave (California and New Jersey), and paid sick days (Washington, DC, Milwaukee, and San Francisco).

Leaving paid sick days and family leave up to the discretion of employers contributes to massive disparities between high- and low-income workers — with low-income workers who are least able to afford to take unpaid leave the least likely to be covered. Among the lowest-paid private sector workers (earning $8.10 an hour or less), only two in 10 have paid sick days. In contrast, more than eight in 10 workers earning $24.53 an hour or more have paid sick days. All told, more than 40 million Americans must choose between coming to work sick or giving up a day’s pay.

When it comes to paid family leave, the highest income workers are six times more likely than the lowest-income workers to have such benefits. Overall, only 10 percent of private industry workers have paid family leave; although high-paid managers and professionals have access to other benefits that can provide income during family leave.

Business owners may find these disparities troubling, but they need evidence that legislating leave can help their businesses prosper. A study of California’s paid family leave program and another on San Francisco’s paid sick days offer just such proof.

Despite lobbyists’ doomsday warnings about paid leave, businesses have spoken through these studies and the message is clear. Most businesses are not harmed — and indeed often benefit — from paid leave laws.

The majority of employers want the best for their workers and for the bottom line. As it turns out, laws on paid leave are good for both.

Eileen Appelbaum is a senior economist at the Center for Economic and Policy Research. She is the coauthor of “Leaves that Pay” and “Achieving a Better Balance.” Candace Howes is professor of economics at Connecticut College and co-author of the forthcoming For Love or Money: Care Provision in the U.S.

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