For a country with such deep roots in family values, the United States is clearly lagging behind when it comes to benefits for new parents. Although U.S. law allows up to 12 weeks of leave for new parents, that leave is an unpaid period. Currently the U.S. Is the only industrialized nation without mandated paid leave for new parents. Sweden, for example, requires employers to pay for up to 480 paid leave days for each new parent.
Maternity leave is a driving force of wage disparity between the genders, and a lack of paid leave has resulted in high attrition rates for new parents in some of the nation’s largest corporate employers. The issue of paid parental leave is an indicator of the state of America’s work culture and, in addition to being a policy issue, is social in nature. Until federal legislation is enacted we may not see an American workplace that is truly equitable to women or employees that choose to have families.
Women shoulder the majority of the economic opportunity cost of child rearing. According to the U.S. Census Bureau, “Based on median annual earnings for full-time, year-round workers, women earned 76.5% of men’s earnings in 2012.” The income gap between men and women is, in part, due to lost wages for maternity leave or the choice to have a family.
According to a 2009 U.S Department of Labor study, “Women who have never married earn 94.2 percent of their unmarried male counterparts’ earnings. Those who were married with a spouse present earned 75.5 percent of their male counterparts; earnings.”
If disparity in wages shows anything it is that sexism and patriarchal hierarchies are very much a part of our existing system. Fixing these imbalances is, in part, the job of legislation but more importantly American culture needs to reevaluate the role of women in the work place. Giving paid leave to parents, especially new mothers, will begin to bridge the wage divide between the genders.
Men will also benefit from paid leave in which they can go be fathers and husbands. OECD Fathers’ Leave, Fathers’ Involvement and Child Development states, “Evidence suggests that children with fathers who are ‘more involved’ perform better during the early years than their peers with less involved fathers.” The same report found that to be true in developed nations where fathers are taking time off:
Denmark is the clear leader with 90% of fathers taking time off for up to two weeks around the birth of a child. In the U.S. only 33% of fathers took time off. With the research showing that the involvement of both parents has positive effects on the development and later life of children, it is time for the U.S. to begin to make investments not only in parents but also in our children.
Impacts on the Workplace
Research shows that providing employees with flexible work schedules and paid time off results in overall savings for an organization. In 2006 Google used data on their retention rates to focus in on the crux of the issue and found attrition rates for female employees were most strongly correlated with maternity leave. The report states:
“Another time Google was losing women was after they had babies. The attrition rate for postpartum women was twice that for other employees. In response, Google lengthened maternity leave to five months from three and changed it from partial pay to full pay. Attrition decreased by 50 percent.”
Google’s findings are reflective of larger trends. Research gathered by the Institute for Women’s Policy Research shows, “Paid leave increases the likelihood that workers will return to work after childbirth, improves employee morale, and has no negative or positive effects on workplace productivity.” By working with employees to create work-life balance, employers are able to save money by not having to find new hires.
The pattern is clear; employees that are given paid leave to go be parents not only perform better at home, but also return to the workplace. If corporations want to retain their talent then they should be the first to advocate for paid parental leave legislation.
Is a Policy Needed or Can the Market Self Correct?
The U.S. has a long tradition of believing that the free market will correct for inefficiencies. The argument can be made that as corporations compete on price and benefits to attract new talent, the business world will move on its own accord towards offering paid leave to new parents. This may explain why the U.S. has yet to adopt a federal policy. What proponents of this worldview overlook is that business may operate more efficiently in a regulated setting.
Under the current model, as organizations compete for the attention of new talent, they have to do so on an uneven and dynamic playing field. Keeping tabs on competitors who use benefits packages to poach talent can detract from organizational goals and progress. In contrast to the current market a legislated environment offers a market in which the benefits and offerings of the competition are transparent. When no longer required to compete on a benefits package, organizations can refocus the role of their human resource departments to developing integrated and unique methods for promoting employee productivity and happiness.
Paid Leave for Federal Employees? Not yet…
Many were hopeful that the Obama administration would be one of the early adopters of progressive paid leave policy by integrating paid leave for parents into the Federal Government. An article published by Forbes in June titled Obama Pushes for Paid Parental Leave, Workplace Flexibility highlights strong rhetoric from the President on the issue. According to Forbes Obama stated, “Today I’m going to sign a presidential memorandum…requiring every federal agency to address flexible work schedules and give employees the right to request flexible work schedules.” The reporters at Forbes interpreted that to mean that Obama would create paid leave days for new parents.
In reality the Presidential Memorandum, Enhancing Workplace Flexibilities and Work-Life Program does not mention paid leave for new parents anywhere in its documentation. What the memorandum does do is require federal agencies to be in compliance with the Family and Medical Leave act (FMLA). However under FMLA phrasing, days taken off for adoption or childbirth are allotted as sick days. The act serves to protect employees from losing their jobs through a 12-week unpaid period in which they can care for a newborn. It’s not exactly the paid leave program that Forbes reported on.
The Forbes article also mentioned S.942, the Pregnant Workers Fairness Act, but again the act only protects potential employees from employer discrimination for pregnancy. It does not create a structure for paid leave. Ultimately, the verdict is still out for the Obama administration’s stance on paid leave, as they have yet to support any legislation or federal initiatives that mandate paid leave for new parents.
By not enacting a federal policy we are handicapping our workforce’s ability to be productive on the global stage. Not paying for parental leave is a drain on organizations time and resources, as they are required to recruit and train replacement workers. In an unregulated market we also run the risk of disenfranchising our nation’s youth by forcing workers to choose between their careers and their children. That is a choice that no parent should have to make. For the benefit of our economy, parents and children we need to match our American family values to the ones already held by the rest of the developed world.