According to the Department of Labor, in 2006, 82 percent of American workers in the private sector had access to some sort of paid leave, whether sick leave, vacation, or personal leave. Many businesses are also choosing to offer employees greater flexibility with their work hours and arrangements. As of May 2004, 27 percent of full-time wage and salary workers had arrangements that allowed them to vary their work start and end times. More than four million Americans telecommute most days and an estimated twenty million telecommute at least once a month. This flexibility provides employees with many advantages, including great ability to care for personal and family needs. Businesses competing to attract employees find that it makes business sense to offer such arrangements. That’s how it works in a dynamic market economy.
In addition to relying on the competitive marketplace, policymakers should look at ways to make it easier for individuals to provide for themselves during periods when they cannot work. A first step would be to eliminate disincentives for private savings in our tax code to encourage individuals to put money away to provide for themselves in times of need. The government has created tax advantaged accounts for retirement, for educational expenses, and for healthcare costs. Similar efforts could be made to encourage individuals to save to provide for periods of leave. Workers could be allowed to put a few thousand pre-tax dollars per year into a “Paid Leave” savings account, which could be accessed without penalty when they have to take unpaid (or partially paid) leave due to illness or the birth of a child.
Such proposals won’t provide the kind of sympathetic stories that appeal to the media or make for tear-jerking congressional testimony, but they will make it easier for individuals to provide for themselves when they are unable to work. Government mandates may sound like compassion, but they impose real costs on employers and ultimately on the employees they are intended to help.