Why Paid Sick Leave Is Good For Business

Time off isn’t just a moral necessity; it’s also a smart economic policy.

David Sirota

On October 20, 2010, European Deputy Licia Ronzulli voted in favor of increasing maternity leave in Europe from 14 to 20 weeks. The U.S. is the only industrialized country not to mandate paid maternity leave (Frederick Florin/AFP/Getty).

For all the pro-fam­i­ly rhetoric that dom­i­nates Amer­i­ca’s polit­i­cal dis­course, U.S. law remains decid­ed­ly anti-fam­i­ly — at least in com­par­i­son to peer coun­tries. This is the world’s only indus­tri­al­ized nation that does not require employ­ers to pro­vide any paid vaca­tion days. It is the only indus­tri­al­ized nation that does not require employ­ers to pro­vide paid mater­ni­ty leave. And it is the only indus­tri­al­ized nation that does not man­date paid sick days. That’s Amer­i­can excep­tion­al­ism at its worst. 

Various studies have shown that requiring companies to provide paid sick days, vacation time and maternity leave would likely provide a macroeconomic benefit by limiting workforce turnover, lowering overall health care costs and boosting productivity.

The stan­dard pub­lic defense of this sad real­i­ty is a domi­no-the­o­ry argu­ment. Cor­po­rate lead­ers and the con­ser­v­a­tive politi­cians they own typ­i­cal­ly argue that paid leave man­dates will auto­mat­i­cal­ly raise costs and that those costs will con­se­quent­ly prompt job and wage cuts that hurt the very work­ers the man­dates aim to help. This shrewd bit of spin reimag­ines the cor­po­rate class’s desire to exploit work­ers as fight-for-the-lit­tle guy altruism.

As polit­i­cal dem­a­goguery, the line has been wild­ly suc­cess­ful in not only help­ing defeat paid leave pro­pos­als but also in jus­ti­fy­ing laws in 10 states that pre­emp­tive­ly pro­hib­it local com­mu­ni­ties from enact­ing such man­dates. The trou­ble, though, is that man­date oppo­nents’ under­ly­ing eco­nom­ic argu­ment is not sub­stan­ti­at­ed by the data. 

In recent years var­i­ous stud­ies have shown that requir­ing com­pa­nies to pro­vide paid sick days, vaca­tion time and mater­ni­ty leave would like­ly pro­vide a macro­eco­nom­ic ben­e­fit by lim­it­ing work­force turnover, low­er­ing over­all health care costs and boost­ing pro­duc­tiv­i­ty. In the case of sick leave in par­tic­u­lar, man­dates could reduce the out­put loss­es asso­ci­at­ed with what econ­o­mists call pre­sen­teeism” — aka employ­ees com­ing to work ill and sub­se­quent­ly mak­ing cus­tomers and fel­low employ­ees sick.

In the past, it may have been easy to write these find­ings off by say­ing they were just spec­u­la­tive or by claim­ing that oth­er coun­tries’ suc­cess with employ­er man­dates is irrel­e­vant to Amer­i­ca. But as of this month, even those facile mis­di­rects have been debunked, as pow­er­ful new data emerges from Con­necti­cut, a state that man­dat­ed paid sick days back in 2011.

In a new study sur­vey­ing 251 Con­necti­cut firms, researchers from the Cen­ter for Eco­nom­ic and Pol­i­cy Research and the City Uni­ver­si­ty of New York showed that a large major­i­ty of employ­ers report­ed that the law did not affect busi­ness oper­a­tions and that they had no or only small increas­es in costs … employ­ers saw decreas­es in the spread of ill­ness­es and increas­es in morale.” In all, the study found that today over three-fourths of (Con­necti­cut) employ­ers report­ed that they were very sup­port­ive or some­what sup­port­ive of the paid sick days law.”

It should go with­out say­ing that deny­ing work­ers any guar­an­teed leave is inhu­mane and the oppo­site of pro-fam­i­ly.” With rough­ly 40 mil­lion Amer­i­can work­ers hav­ing no paid sick leave, with only 11 per­cent of pri­vate-sec­tor work­ers hav­ing access to paid fam­i­ly leave, and with mil­lions get­ting no paid vaca­tion, there is a strong moral argu­ment for law­mak­ers to enact guar­an­tees for sick, mater­ni­ty and vaca­tion leave. Indeed, just like a basic sense of human decen­cy was the impe­tus for labor, wage and work­place safe­ty laws, so, too, should human rights be the basis for paid leave mandates.

But even if you are a cold-heart­ed mis­an­thrope, a greed-dri­ven exec­u­tive or a cor­rupt politi­cian ignor­ing the moral case for reform, the con­crete num­bers from Con­necti­cut prove that paid leave man­dates make macro­eco­nom­ic sense.

In prac­tice, that means such man­dates do not con­flict with cap­i­tal­ist objec­tives or Amer­i­can culture’s wor­ship of the almighty dol­lar. It means that paid-leave man­dates are both moral neces­si­ties and smart eco­nom­ic poli­cies. It also means they are long overdue.

David Siro­ta is an award­win­ning inves­tiga­tive jour­nal­ist and an In These Times senior edi­tor. He served as speech writer for Bernie Sanders’ 2020 cam­paign. Fol­low him on Twit­ter @davidsirota.
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