Lessons Learned from Last Week’s Ways and Means Hearing On Paid Leave

There have not been many hearings in Congress on paid family leave, but last week’s hearing showed that there is bipartisan interest in the topic. Almost all the members of the committee, which has primary jurisdiction over paid family leave policy, attended the hearing.

While in the past the issue has received interest from primarily the Democratic side of the aisle, last week all members engaged with witnesses, discussing the issue and expressing serious interest in exploring a federal paid family leave policy.

At the hearing, Republican and Democratic lawmakers expressed their shared belief that paid family leave should apply to both men and women.

Lawmakers expressed concerns about the rate of women’s participation in the labor force, pointing to its decline since 2000 and the further projected decline in the future. Others feared that a too-generous paid leave policy could negatively impact women’s workforce participation by creating a hiring bias against women of childbearing age.

Some research has shown that paid parental leave can have a positive impact on the economy. One report found that many poor, working age people cite family care responsibilities as a primary reason for not working, an issue paid leave could address. A number of researchers have also found positive economic effects associated with paid leave, including increasing labor force attachment among new mothers. Whether paid leave contributes to increased or decreased workforce participation has important implication for the broader economy. For example, consulting firm McKinsey has estimated that if more women stayed in the workforce, all states could see a 5 percent increase in GDP.

At the hearing, LeVine noted that while women benefit from paid family leave policies, paid leave is not a women-only issue. Gupta added that a national paid family and medical leave policy could have significant benefits for multiple family members. For example, studies demonstrate that paid leave is associated with decreased rates of low birth weight and infant mortality and improved cognitive development in children. Greater paternal involvement, in turn, has been linked to increased gender equity and higher cognitive test scores in children.

Lawmakers and panelists alike pointed to the wage and industry differences, as well as the racial and ethnic differences, in accessibility and use of paid family leave.

Only 5 percent of the lowest wage-earners have access to paid leave compared to 30 percent of the highest earners. In addition, Rep. Lloyd Doggett (D-TX) and CLASP’s Gupta pointed to the lack of paid leave accessibility among black and Latino workers, specifically black women and Latinas, despite being key family breadwinners and caregivers. In fact, a majority of black mothers (60.9 percent), close to half (44.2 percent) of Native American mothers, 31.2 percent of Latina mothers, 20.6 percent of white mothers, and 10.8 percent of Native American women are unmarried and the sole breadwinners for their children.

Sandkamp, owner of a small woodworking business in New Jersey, testified that New Jersey’s paid family leave law helped strengthened his business while helping employees in time of need. “Paid family leave helped skilled workers return to my business, relieving me from having to hire and re-train new employees, which takes roughly 6 months all while taking a cost to my business,” he said.

In addition to economic benefits, paid leave can also help employers attract and retain talent. Millennials, who make up 35 percent of the labor force and are part of the so-called “sandwich generation,” value parental leave more than earlier generations. In fact, 38 percent report that they would be willing to move to another country for better parental leave benefits.

Committee members and witnesses, however, expressed concerns about specific industries and the impacts on small businesses. For example, Rep. Adrian Smith (R-NE), noted that the costs of paid leave could outweigh the benefits for farmworkers and ranchers. According to Heritage’s Greszler, it is unclear how a national paid family program would impact agricultural workers.

While panelists agreed that flexibility is key to expanding paid leave in today’s economy, they differed on the best way to do so. Some preferred health savings accounts or programs such as the Working Families Flexibility Act, introduced by Sen. Mike Lee (R-UT) and Rep. Martha Roby (R-AL), which would allow workers to exchange their overtime pay for paid leave. Others expressed concerns that health saving accounts would only help wealthy or high-wage earners.

Washington State’s LeVine said that her state’s Paid Family and Medical Leave program could be used as an example of how paid leave works for employees and employers when drafting a national policy. Additionally, she added that Washington’s benefits are generous and portable, making it easier for workers to travel with benefits as they move through jobs, a feature particularly significant to freelance and “gig economy” workers.

Workers in the gig economy or other nontraditional work arrangements are in a unique position when it comes to their financial needs. For some workers, access to these arrangements can provide new sources of work and opportunity, but for others it could create additional reliance on social services due to lack of access to traditional employer-provided benefits. Additional research on how to design paid leave benefits for nontraditional workers is important in developing inclusive and flexible paid leave policies.