Robert E. Rubin, a co-chairman emeritus of the Council on Foreign Relations, was treasury secretary from 1995 to 1999.
Twenty-five years ago, President Bill Clinton signed into law the Family and Medical Leave Act, designed to help workers address the dual responsibilities of work and family. The legislation gives workers a protected right to take unpaid time off to care for a new child, a sick family member or their own health. But while the FMLA was a landmark achievement, it doesn’t go far enough. American workers and businesses need a universal paid leave program.
And we need it now. Although the economy has been in recovery, too few people have benefited from growth. Many remain outside the labor force. The economically constructive forces of globalization and rapid technological change have left many workers facing wage stagnation and limited opportunity. And, critically, millions of women who should be gainfully employed are simply not participating in the labor market. This hinders growth in the real economy and negatively affects the well-being of families and children.
One of the last century’s great economic accomplishments was the growing number of women entering the workforce. Economists have estimated that between 1979 and 2012, women’s rising hours of paid work boosted U.S. gross domestic product by 11 percent. Because the increase in women’s paid work coincided with men dropping out of the labor force, women kept household income from declining.
But the trend has reversed, and women’s participation in the workforce has declined by three percentage points since 2000, with the most notable drop among those with less education and fewer means to absorb the shock of a lost income. The absence of work-family policies such as paid leave explains about a third of that decline, according to research by Cornell University economists Francine Blau and Lawrence Kahn.
The FMLA has been used more than 200 million times by families, with relatively little burden on employers. But the law covers only about 60 percent of workers, and only about a fifth of those who take leave are new mothers. It gives them up to 12 weeks of leave, but with no pay — an impossible situation for many employees.
Parents, especially mothers, often return to work within a few weeks — or days — of a child’s birth, with long-term consequences for both mother and child. Others cut back their hours or quit their jobs altogether, which is harmful to families and the U.S. economy alike.
Employer-sponsored paid leave coverage is available to only about 15 percent of U.S. workers. Only a handful of states — California, New Jersey, Rhode Island, New York and Washington state, plus the District of Columbia — have enacted paid leave policies that cover all workers and provide adequate temporary replacement income. These jurisdictions are a model for what a paid family leave program can accomplish. But, as a joint report by the Brookings Institution and American Enterprise Institute concluded, state programs alone are insufficient.
It’s time to enact a national universal paid leave program. It should include the principles laid out by the Washington Center for Equitable Growth’s Bridget Ansel and Heather Boushey in a paper published last fall by the Hamilton Project: Offer at least 12 weeks of leave to men and women for childbirth and adoption, care of a relative’s serious medical condition or a personal medical issue; cover all private-sector workers; and pay those workers a replacement wage high enough to make a difference in their lives. Doing so would provide an immense benefit to workers and their families and be very good for the overall economy.
Experience from the states teaches us that thoughtful interventions can create good outcomes. After California adopted the nation’s first paid leave program, maternal employment expanded. Studies of California and the other states show that paid leave increases the likelihood that workers will return to their original employer and remain in the labor force. Workers without paid leave are more likely to postpone or never receive critical medical treatments, harming productivity and resulting in costlier care later on. Research shows that workers with access to paid leave are less likely to take advantage of public benefits such as food stamps, reducing fiscal strain on those programs.
As for businesses, research by BCG finds that paid family leave “can deliver significant rewards that outweigh the costs,” including “improved employee retention, the ability to attract the best talent, reinforced company values, [and] improved employee engagement, morale, and productivity.” And a working paper released by the Organization for Economic Cooperation and Development concludes that reducing the gender gap in labor force participation would strengthen our economy significantly.
In this age of partisanship and polarization, it is notable that progressive Democrats such as Rep. Rosa L. DeLauro (Conn.), conservative Republicans such as Sen. Marco Rubio (Fla.), and the Trump administration have all recently embraced the concept of paid family leave.
Agreement on a bipartisan, comprehensive paid leave bill is within reach. The federal government should build on the success of the Family and Medical Leave Act by enacting a nationwide paid leave program.