Who Pays for Families?

Elleanor Chin

“Why should the employer pay? Why should the company bear the cost of sick leave or parental accommodation?” A friend and former colleague of mine asked me that recently as we were getting ready to present to a group of human resources professionals about parenting issues in the workplace.

The short answer is, because someone has to, and our society has chosen to allocate the burden of essentially being human – having a family (or getting sick) - to individuals or families first and to employers or corporations second. Unless or until we decide to expand the conversation to real redistribution of social costs more widely, that is choice we are given. Anyone who is really worried about why employers are being asked to pay can work to change the system so that there are other options on the table. Other options that is, than simply forcing people to get sick, lose their jobs, and stay poor. That is not only inhumane, it is naïve.

Paid family leave, paid sick days, flexible scheduling and reduced time schedules all have economic and logistical costs for employers. This creates unnecessary and arguably artificial economic tension between families and employers. Some corporations with high profits and enormous market share have disproportionate economic power and can afford to make (or refuse to make) policy as they please, subject to fairly minimal regulation. But most employers have a constant struggle to balance a competitive domestic consumer environment, high cost of capital, decline in economic activity generally, global production competition, plus regulatory requirements. Cost of labor, both wages and benefits, is just one factor for an employer to balance. Employers may rationally resist increase in labor costs in the form of paid leave and less than full-time productivity from individual workers. At the same time real wage value in this country has drastically fallen, the middle class is in rapid decline, and increasing numbers of children face food insecurity homelessness and multi-generational poverty. Both employers and employees are being told “it's you or them.” But is that a necessary conflict? No, it is a choice we have imposed on ourselves.

The arguments for why it is worth investing in employees through pro-family policies generally derive from the business case that a well rewarded, adequately supported work force is a more valuable and productive workforce. Employees who can take a day home with a sick child without losing a full day's pay or without losing their job entirely will save the employer time and money in constantly training a high turnover work force. Paid parental leave, meaningful pregnancy and nursing accommodation policies and a work place culture that reinforces those policies result in higher retention of a more diverse work force and thus increased value. Flexible scheduling, job shares, daycare and respite care subsidies all contribute to increased productivity from the existing workforce.

These arguments all assume an employer-funded, market-incentivized system in which individual employers compete for better, more productive employees as a way of improving the bottom line. However, the actual result is differential cost assessments by employers, some of whose business models and profit goals do not require a healthy, invested, low-turnover workforce. It leaves the choice in the hands of employers who may rationally ask “why me”, when they have a choice about whether to pay for parental leave, or a certain types of health coverage. When an employer has a choice about a benefit, someone can and always will chose not to offer it, when calculating it among the many other costs of doing business.

Employers also operate in an inconsistent regulatory environment. For example, a large employer in Oregon has one sick leave ordinance that applies to employees in Eugene and one that applies in Portland. State and federal sick and parental leave policies differ. An employer that has California and Washington operations has additional, different regulatory requirements. An employer with employees traveling through multiple jurisdictions (e.g., freight, airline or sales) has yet another set of challenges. And advocates and legislators who want to create a genuinely pro-family working environment in this country have fight one small, local jurisdiction at a time because of difficulties generating momentum and consensus on a national basis.

Elective and patchwork benefits reinforce stratification between low- and high-paid workers. Between the extremes of tech start ups with luxurious lounges and cafeterias serving organic food and front-line food or retail service jobs making minimum wage and no benefits are hundreds of thousands of people who make enough money to live on, EXCEPT when one factors in daycare for two kids. Or who can pay rent and car payment EXCEPT when someone gets sick. Or who can make it all work, barely, until summer rolls around and suddenly they have vastly increased childcare costs and no food because their kids got free breakfast and lunch at school.

We operate in a political and regulatory environment where, as a society we say, “this is all the employer's problem” and if incentivized, employers will simply do the right thing. And if they don't, it is simply the natural and even laudable operation of market forces. That is not the only way of looking at the dilemma, or even an accurate one. I'm going to leave aside for now the question of the real economic cost/benefit of family-supportive work place policies for employers. “Why should the employer pay” assumes the answer to that one. What I want to know is, why should any one employer have to pay? A nationalized (single-payor, tax-funded, socialized, however you wish to call it) benefit scheme would not only even the playing field for employees, but employers as well. If everyone who walks into an employer's door has access to sliding scale, high quality child care (as is the case in many other industrialized countries) then one major cause of absenteeism, productivity loss, stress and turnover is reduced, from the garage attendants to the C-suite. Small businesses aren't automatically set against their employees on benefit costs if health care costs are allocated across the largest possible pool. National implemention of family benefit policies reduces incentives to jurisdiction shop and move jobs to the lowest-bidding locale.

None of this eliminates that problem of paying for benefits. But the “Why me” becomes “why we”. “We” all have to pay anyway, whether it is through a tax scheme, a premium scheme or any other aggregating mechanism. And we all have to ask ourselves about the “business case” in the aggregate. Do we all benefit from being humane to one another, when as a society we do ultimately have to share the costs of being sick, raising children, and caring for our elders. Or are we honestly happy with those costs being destructive for all but the privileged few who have managed to accumulate enough capital to insulate themselves from what it costs to be human.

By Elleanor Chin Aug. 22, 2014