Paid Family and Medical Leave
Ways and Means, Paid Family and Medical Leave: Helping Workers and Employers Succeed, May 8, 2019
Ways and Means, Legislative Proposals for Paid Family and Medical Leave, January 28, 2020
The issue of leave is just the start of reform, not it’s end.
Paid family leave is standard in the industrialized world. Whether this is required by law or subsidized through tax supported subsidies, this is an essential subsidy for all families. Indeed, even without provisions for family emergencies, some form of paid time off for holidays, leisure or illness is essential for both individuals and society as a whole.
Sick leave is especially essential to prevent the spread of disease. Unless one argues that it is ultimately good for the population to catch minor illness to build immunity, once a worker or their child falls ill, having to work while ill can be torture.
Paid leave is an essential element of human dignity for all workers. One class of employee, permanent full-time workers, both professional and blue collar union members, receive these benefits, as well as health care and retirement. The remainder do not. While some contract workers can afford to budget for these needs, especially those professionals with multiple clients, they are usually professionals who have very marketable skills. Other employees are covered through their parents who have such benefits. Their ability to eat and receive care is not contingent on employment, although some families depend on their labor to survive.
The standard excuse is that contract workers chose their work circumstances and are responsible to budget for leave, time off and the payment of income and payroll taxes. The reality is that most contract workers, whether they contract directly with a client or through a staffing company, are paid less than their co-workers where they should actually receive a higher wage to cover their benefit costs.
Often, these workers are entitled to full-time employment, but enforcement is non-existent. The government, both state and federal, are part of the problem, sometimes intentionally. The same is true of wage and hour, civil rights, workplace safety and fair housing law is likewise unenforced.
Any enforcement usually requires private tort relief and those who are entitled to relief have no access to legal counsel. Hiring the manpower to actually enforce existing rules would likely keep everyone who wants a job employed. Sadly, this joke falls flat with most workers because the joke is on them, even regarding finding work for our glut of law school graduates.
This is compounded by “PRETALIATION.” Those who sue get a reputation for demanding their rights, so they cannot find further employment. They might as well be considered disabled, as are many who are fired for cause. This treatment applies to federal applicants and employees as well. Again, the government is part of the problem.
Allowing states to enact right-to-work laws also compounds these difficulties, as union power generally implies fair pay, benefits, working conditions and due process. As I have commented previously to this Committee, the last 40 years have seen retrenchment in union and employee rights, subsidized by marginal income tax rates that rewarded the new wage slavery by letting the CEO class keep their booty and kick back a share in campaign donations and assistance from non-profit “experts.”
None of this is new. The Old Testament prophets and Jesus himself laid the blame for Israel's troubles on those who ignored the cry of the poor and the call to reform. The reality probably has as much to do with location (and no, this is not an invitation to the acolytes of Henry George to weigh in).
Conditions have been worse and have been justified by the reactionary same nonsense that claims that in the end, the market will sort everything out. Keynes would respond that in the long run, we are all dead. Let me add that one should not have to wait to die for a day off. Marx would agree. For the market to work, there must be both perfect information and no barriers to entry or exit, no black lists, no private salary information. No such luck.
Information sharing and reprisal, while inconvenient here, can be fatal in some Central American nations. Just ask the White House about the problem of immigrants streaming toward our borders. Blame unfettered capitalism, not the cartels. Indeed, the cartels would be out of business save for client American capitalism, drug criminalization and immigration restriction. To close the circle, those most affected by the lack of family leave are undocumented workers. They are unlikely to enjoy the proposed benefits because they cannot safely complain when they are denied. That is the reason they are imported and hired in the first place.
The free market will never supply the proposed benefit. To do so may lead to a better workforce in some industries, but most employers fear that such gains will be offset with loss of market share to lower priced competitors, or that if benefits are shifted from management to employees, it will lose key talent to competitors, especially at top levels.
Let me assure these employers that giving executives too much money helps executives, not shareholders or other stakeholders. Ask anyone whether this nation is better off with such a one as our President. Those not afraid of a reactionary primary challenger will say no if they are being honest.
The perception that doing the right thing makes a business non-competitive is the reason we enact minimum wage laws. Because the labor product is almost always well above wages paid, few jobs are lost when this occurs. Higher wages simply reduce what is called surplus value, and not only by Marx. Any CFO who cannot calculate the current productive surplus will soon be seeking a job with paid family leave. If such leave is required by law, he may find one. The requirement that this be provided ends the calculation of whether doing so makes a firm non-competitive because all competitors must provide the same benefit. This applies to businesses of all sizes. If a firm is so precarious that it cannot survive this change, it is probably not viable without it.
The low wage economy does benefit from the lower prices that may result from them, but a two tier economy is abhorrent in modern society. Indeed, higher wages, benefits and subsidies provide a bigger bang for the buck than is lost to the donor class. Indeed, the rich will likely see higher profits when more people have more money, although they may find it harder to obtain cheap household labor.
No one on either side of this debate is surprised by any of this information, although most of us should be shamed by it because we are informed and have done nothing. Paid family leave is a necessary baby step and will be hard enough to pass because there are reactionaries who believe suffering lifts people out of poverty, as long as they suffer no tax cuts or lose any opportunities to invest in speculative garbage.
This cannot be where it ends. Low marginal tax rates that encourage the CEO/Donor class to extract economic rent from workers must increased to reverse this long term trend. Without such extraction, all workers would have shared in the technology revolution of recent decades. Indeed, much of the cost cutting experienced of late is the result of increased use of low wage touch labor, not automation. Union rights must be restored and enforced by the Department of Labor. Making it business friendly has been disastrous for workers. Existing protections must be robustly enforced. If they are not, the people who need paid family leave will not receive it.
In the long run, moving to more employee and cooperative ownership (and consumption) will end the need for required benefits. Democratic ownership and control will simply produce better and more humane decisions and industry self-regulation will put the brakes on any who do not.
We have written about the benefits of getting to employee ownership and how to bring it about. Our Net Business Receipts/Subtraction Value Added Tax proposal can be both a vehicle for benefits, including paid family leave (if you have it, your tax rate is lower), an expanded child tax credit which will help families achieve an adequate income and broad based and equally earned employee ownership. Our prior comments can be found in an attachment.
Our newest feature is an Asset Value Added Tax paid by the buyer and collected by the broker, rather than relying on the income tax for collection of capital gains taxes (which increases the tax gap dramatically). No prior value added tax will be credited for inherited assets or options exercised, although the current ESOP sale tax exclusion will remain in place. This will decrease speculation and increase employee democracy. It is a feature, not a flaw.
Attachment – Retirement and Family Income and Employee Ownership
Improving Retirement Security for America’s Workers, Wednesday, June 6, 2018
Ways and Means, Legislative Proposals for Paid Family and Medical Leave, January 28, 2020
Paid family leave is standard in the industrialized world. Whether this is required by law or subsidized through tax supported subsidies, this is an essential subsidy for all families. Indeed, even without provisions for family emergencies, some form of paid time off for holidays, leisure or illness is essential for both individuals and society as a whole.
Sick leave is especially essential to prevent the spread of disease. Unless one argues that it is ultimately good for the population to catch minor illness to build immunity, once a worker or their child falls ill, having to work while ill can be torture.
Paid leave is an essential element of human dignity for all workers. One class of employee, permanent full-time workers, both professional and blue collar union members, receive these benefits, as well as health care and retirement. The remainder do not. While some contract workers can afford to budget for these needs, especially those professionals with multiple clients, they are usually professionals who have very marketable skills. Other employees are covered through their parents who have such benefits. Their ability to eat and receive care is not contingent on employment, although some families depend on their labor to survive.
The standard excuse is that contract workers chose their work circumstances and are responsible to budget for leave, time off and the payment of income and payroll taxes. The reality is that most contract workers, whether they contract directly with a client or through a staffing company, are paid less than their co-workers where they should actually receive a higher wage to cover their benefit costs.
Often, these workers are entitled to full-time employment, but enforcement is non-existent. The government, both state and federal, are part of the problem, sometimes intentionally. The same is true of wage and hour, civil rights, workplace safety and fair housing law is likewise unenforced.
Any enforcement usually requires private tort relief and those who are entitled to relief have no access to legal counsel. Hiring the manpower to actually enforce existing rules would likely keep everyone who wants a job employed. Sadly, this joke falls flat with most workers because the joke is on them, even regarding finding work for our glut of law school graduates.
This is compounded by “PRETALIATION.” Those who sue get a reputation for demanding their rights, so they cannot find further employment. They might as well be considered disabled, as are many who are fired for cause. This treatment applies to federal applicants and employees as well. Again, the government is part of the problem.
Allowing states to enact right-to-work laws also compounds these difficulties, as union power generally implies fair pay, benefits, working conditions and due process. As I have commented previously to this Committee, the last 40 years have seen retrenchment in union and employee rights, subsidized by marginal income tax rates that rewarded the new wage slavery by letting the CEO class keep their booty and kick back a share in campaign donations and assistance from non-profit “experts.”
None of this is new. The Old Testament prophets and Jesus himself laid the blame for Israel's troubles on those who ignored the cry of the poor and the call to reform. The reality probably has as much to do with location (and no, this is not an invitation to the acolytes of Henry George to weigh in).
Conditions have been worse and have been justified by the reactionary same nonsense that claims that in the end, the market will sort everything out. Keynes would respond that in the long run, we are all dead. Let me add that one should not have to wait to die for a day off. Marx would agree. For the market to work, there must be both perfect information and no barriers to entry or exit, no black lists, no private salary information. No such luck.
Information sharing and reprisal, while inconvenient here, can be fatal in some Central American nations. Just ask the White House about the problem of immigrants streaming toward our borders. Blame unfettered capitalism, not the cartels. Indeed, the cartels would be out of business save for client American capitalism, drug criminalization and immigration restriction. To close the circle, those most affected by the lack of family leave are undocumented workers. They are unlikely to enjoy the proposed benefits because they cannot safely complain when they are denied. That is the reason they are imported and hired in the first place.
The free market will never supply the proposed benefit. To do so may lead to a better workforce in some industries, but most employers fear that such gains will be offset with loss of market share to lower priced competitors, or that if benefits are shifted from management to employees, it will lose key talent to competitors, especially at top levels.
Let me assure these employers that giving executives too much money helps executives, not shareholders or other stakeholders. Ask anyone whether this nation is better off with such a one as our President. Those not afraid of a reactionary primary challenger will say no if they are being honest.
The perception that doing the right thing makes a business non-competitive is the reason we enact minimum wage laws. Because the labor product is almost always well above wages paid, few jobs are lost when this occurs. Higher wages simply reduce what is called surplus value, and not only by Marx. Any CFO who cannot calculate the current productive surplus will soon be seeking a job with paid family leave. If such leave is required by law, he may find one. The requirement that this be provided ends the calculation of whether doing so makes a firm non-competitive because all competitors must provide the same benefit. This applies to businesses of all sizes. If a firm is so precarious that it cannot survive this change, it is probably not viable without it.
The low wage economy does benefit from the lower prices that may result from them, but a two tier economy is abhorrent in modern society. Indeed, higher wages, benefits and subsidies provide a bigger bang for the buck than is lost to the donor class. Indeed, the rich will likely see higher profits when more people have more money, although they may find it harder to obtain cheap household labor.
No one on either side of this debate is surprised by any of this information, although most of us should be shamed by it because we are informed and have done nothing. Paid family leave is a necessary baby step and will be hard enough to pass because there are reactionaries who believe suffering lifts people out of poverty, as long as they suffer no tax cuts or lose any opportunities to invest in speculative garbage.
This cannot be where it ends. Low marginal tax rates that encourage the CEO/Donor class to extract economic rent from workers must increased to reverse this long term trend. Without such extraction, all workers would have shared in the technology revolution of recent decades. Indeed, much of the cost cutting experienced of late is the result of increased use of low wage touch labor, not automation. Union rights must be restored and enforced by the Department of Labor. Making it business friendly has been disastrous for workers. Existing protections must be robustly enforced. If they are not, the people who need paid family leave will not receive it.
In the long run, moving to more employee and cooperative ownership (and consumption) will end the need for required benefits. Democratic ownership and control will simply produce better and more humane decisions and industry self-regulation will put the brakes on any who do not.
We have written about the benefits of getting to employee ownership and how to bring it about. Our Net Business Receipts/Subtraction Value Added Tax proposal can be both a vehicle for benefits, including paid family leave (if you have it, your tax rate is lower), an expanded child tax credit which will help families achieve an adequate income and broad based and equally earned employee ownership. Our prior comments can be found in an attachment.
Our newest feature is an Asset Value Added Tax paid by the buyer and collected by the broker, rather than relying on the income tax for collection of capital gains taxes (which increases the tax gap dramatically). No prior value added tax will be credited for inherited assets or options exercised, although the current ESOP sale tax exclusion will remain in place. This will decrease speculation and increase employee democracy. It is a feature, not a flaw.
Attachment – Retirement and Family Income and Employee Ownership
Improving Retirement Security for America’s Workers, Wednesday, June 6, 2018
posted by Michael Bindner at 10:00 AM
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