Consider these three facts.
First, a key component of Hillary Clinton’s policy agenda was to help working people balance work and family. Had she won, we’d very likely now be talking about joining the rest of the advanced world by setting up a national program of paid family and medical leave.
Second, Clinton received 90 percent of the votes in D.C., compared to Trump’s 4 percent.
Third, in our age of federal gridlock, many states and cities across the country are not waiting for our extremely fractious and divided Congress to get its act together, and are instead implementing policies they believe will best serve their citizens.
Here in D.C. we’re one step closer to doing precisely that, by adopting a family and medical leave program that will make the city a more attractive place to work, reduce income inequality, improve public health and likely draw more women in our labor market — all without making the city’s strong economy miss a beat, according to a detailed analysis. The measure was adopted by a solid majority of the D.C. Council on its first vote, and faces a final vote next week.
D.C.’s paid family leave insurance will make an important difference to workers at a modest cost to employers. In return for $372 a year for a worker making $60,000 annually (roughly D.C.’s median wage) workers will be able to take up to eight weeks of paid leave with a new child, six weeks to care for an ill relative and two weeks to treat their own health needs. In return, businesses will get the tangible benefits of improved morale, more productive employees and less turnover. Paid leave might also make more people interested in working in D.C. rather than Maryland or Virginia, improving the pool of workers for businesses to choose from.
While opponents cast work/family policies as hurting small businesses, D.C.’s paid leave program is, to the contrary, important to such firms. Many smaller businesses struggle to provide benefits like health insurance, given their small pool of workers; they generally can’t afford any paid family and medical leave. D.C.’s new program will allow companies like Bright Start Early Childhood Center to offer paid family and medical leave for the first time; its total payroll expenses will grow from $850,000 to just $855,270. One of us (Lazere) runs a policy shop here in D.C. with a budget of about $1 million, and will pay $4,300 to offer a great benefit to our entire staff. That’s really a rounding error. The $250 million annual price tag for the current bill may sound big but amounts to just 0.3 percent of D.C.’s annual private-sector production.
Paid family leave will cover most working D.C. residents, since two-thirds work in the city’s private sector, and it will be especially helpful to low-wage workers. The new paid leave program will replace 90 percent of their pay, to make sure they can afford to take leave when needed. The wage replacement will be 90 percent for the average Ward 7 and Ward 8 residents, and still a sizable 72 percent for the average Ward 3 resident.
Paid leave will have important public health benefits as well. Both moms and dads will have more time to bond with their newborns. More moms will breast-feed, research shows, and infant mortality will go down. These gains will be especially large in D.C.’s low-income communities of color. Lower-wage workers also will benefit from knowing they can take leave to care for a loved one without putting their family at financial risk.
Some, including The Washington Post’s editorial board, argue against paid family leave because many people who work in D.C. live in Maryland and Virginia. That’s a fair point, and over the longer term, the D.C. Council must continue to fight for the ability to collect some sort of levy from those who work here and use the city’s resources but don’t live here, as every other jurisdiction has the right to do. But for now, there is no practical way to separate D.C. residents from others when designing laws governing D.C.’s workplaces. Besides, including Maryland and Virginia residents brings in more money and makes the paid family leave fund more stable. It therefore doesn’t make sense to argue that because nonresidents benefit, we should deny D.C.’s working families helpful policies like this one. Investing in good roads, for example, makes sense even if they are used by people coming from Maryland and Virginia.
While some employers will understandably complain about the new tax, the fact is that even though employers will make the payments for paid leave, workers will likely bear most or all of the costs, as the tax gets passed through to their wages (which also means that that Maryland and Virginia residents will implicitly pay their fair share). Obviously, we’re not advocating for lower pay. We’re just recognizing the usual trade-off between a job’s wages and benefits; better benefits are often at least partially offset on the wage side. In this sense, the “all-in” wage, counting the value of the new benefit, doesn’t go down.
For all of these reasons, it is no surprise that a thorough economic analysis of D.C.’s paid family leave proposal found that it is “unlikely to affect the upward trajectory of D.C.’s economy.” That analysis, by the D.C. Council’s budget office, predicted that paid family leave would raise women’s participation in the labor force and reduce infant mortality, all without affecting D.C.’s growth rate in any measurable way. (The study predicts that over the next decade, D.C.’s GDP “would grow at an average annual rate of 1.921% to 1.913%, rather than 1.920%”; given measurement error in 10-year forecasts, that’s no change at all.)
In the age of Trump and the Republican Congress, the nation is highly unlikely to see paid family leave or much else in the way of pro-worker policies. But that doesn’t mean progressive cities like D.C. have to shelve our plans for making this city a better place to work and live.