In Defense of the GOP Paid Maternity Leave Policy

Brian Hicks

Posted January 29, 2015

Jezebel is trying to make a scandal out of the fact that the GOP offers paid maternity leave to staff, and not the mat leaverest of America.

Those hypocrites!

Paid leave is awesome!

Every mom should have it!

The first thing to rub up uncomfortably against these understandable, knee-jerk reactions is that the GOP can’t offer moms anything.

The party could take it from other people and hand it out in the form of entitlements, or it can mandate other people offer it in the form of regulations. But unlike businesses, which generate value and then use it to compensate employees with things like salaries and paid time off, government only takes value from people who create it and then distributes it in whatever way is likely to keep the current decision makers in power, or lead to lucrative consulting gigs after they leave office.

I digress.

The second problem with this analysis is that the Family Medical Leave Act already mandates employers offer 12 weeks of unpaid medical leave after a baby is born. This is shorter (and less paid) than most industrialized nations mandate, and shorter (and less paid) than what GOP staffers get.

One good reason for offering GOP staffers paid maternity leave is that if enough of them get pregnant, it might just slow down the neverending destruction of what was once the greatest economy in the world through currency manipulation, overregulation, trade barriers and a million other small screwings.

That stands in contrast to the real cost of paid maternity leave in the profit-making sectors of the economy. Which doesn’t make it a bad idea, just one with tradeoffs, like every other thing one might want to mandate.

The problem with sweeping mandates like paid maternity leave, is that it has …

Unintended Consequences

Knowing paid maternity leave is mandatory might, for instance, disincentivize companies from hiring women of childbearing age. This isn’t just because some companies are run by raging misogynists, true as that certainly is. But if you expect certain women to be more costly overall to hire, you’re going to pay them less, or hire them less often, or both. Companies with generous maternity leave benefits are also demonstrated to promote women more slowly than their male counterparts.

This appears to be true on a countrywide level as well. Europe’s more generous paid leave policies may be correlated with European women’s poorer representation in positions of leadership in companies compared with American women.

Jobs

Economy-wide, the NFIB Research Foundation estimates the cost for mandating paid leave to be between 12,000 and 16,000 jobs over several years, and billions in lost economic output.

Mandated or not, parental leave itself, especially when women take it, has negative effects. Being out of the workforce for any extended period means missed opportunities for growth and advancement.

Unlike the US government, which has been for decades simply borrowing and printing money to make up the shortfall between what it brings in and spends, when a company runs out of money, it goes bankrupt. Some businesses, like the Laughing Planet Café, an Oregon restaurant, offer its employees paid parental leave. The owner did the math, and found that with the cost to hire and train a new employee, he could have up to 10 people out on parental leave at any one time and still come out ahead.

But there are millions of US businesses for whom paid leave for one or two employees is the difference between being able to operate and having to close doors. In every business, money spent paying employees who aren’t working is money that can’t be spent taking risks and innovating. Paid leave is nice. Paid leave costs money.

One bill to mandate paid parental leave, introduced by Rep. Rosa DeLauro, D-Conn., and Sen. Kirsten Gillibrand, D-N.Y., would be paid for by increasing the payroll tax for employees and employers by 0.2 percent. The payroll tax is already a regressive tax. Increasing taxes in a way which disproportionately hits low-income people so mothers can have paid time off seems like an odd move.

Which isn’t to say paid parental leave is a bad idea.

Women in their childbearing years are freaking brilliant, and their contributions are absolutely worth a few weeks off to care for any new people they choose to create. As women continue to earn more degrees, and more advanced degrees, and ascend the ranks to decision-making positions, paid maternity leave will likely become default.

But in the meantime, while businesses exist on the edge, knowing a pregnancy could make the difference between the ability to operate and not, it must be up to each individual employer whether or not to offer paid maternity leave, and if so, how much.

Angel Publishing Investor Club Discord - Chat Now

Brian Hicks Premium

Introductory