On June 14, the Joint Economic Committee held a hearing on helping women balance work and family responsibilities. The hearing focused on the findings of a Government Accountability Office (GAO) report, “Women and Low-Skilled Workers: Other Countries’ Policies and Practices That May Help These Workers Enter and Remain in the Labor Force.”
Vice Chair Carolyn Maloney (D-NY) said, “It’s been more than a decade since the Family and Medical Leave Act [FMLA] was signed into law, granting most workers job protection for unpaid leave to care for a new child or seriously ill family member. But the reality is that most U.S. workers cannot afford to forgo pay for any length of time when care giving needs arise. For most American families, it takes two incomes just to make ends meet in the face of stagnant wages and high costs for energy, child care, and health care.” Rep. Maloney added, “I hope we can all agree that many of the work-family models we see from abroad would benefit U.S. workers and that they are more important than ever. What we will explore today is how stronger work-family policies in the U.S. would benefit businesses and the economy.”
In expressing concerns about comparing the U.S. to other countries, Ranking Member Jim Saxton (R-NJ) said, “The topic of labor market policies in other countries is useful to examine. As we know, leave and training policies are usually part of a larger set of labor market policies. In Europe, these policies, viewed as a whole, have significantly increased the cost of employment with the result that unemployment is quite high in countries, such as France and Germany. While officially lower in other countries, such as Sweden, the largest Swedish trade union has acknowledged that the true unemployment rate is significantly higher than the official rate. This unemployment disproportionately affects younger workers as well as immigrants. The bottom line is that we have to look at the big picture in reviewing labor market policies in specific countries, including their programmatic costs, their economic effects, and the preferences of affected workers.”
Kay Brown, acting director of Education, Workforce, and Income Security Issues at the GAO, stated, “Governments and employers in the countries we studied [Canada, the United Kingdom, the Netherlands, Denmark, France, Ireland, New Zealand, and Sweden] developed a variety of laws, government policies, and formal and informal practices, including periods of paid leave (such as maternity, paternity, or parental leave), flexible work schedules, child care, and training that may help women and low-wage/low-skilled workers enter and remain in the labor force.” Ms. Brown continued, “In addition to family leave for parents, countries provide other types of leave, and have established workplace flexibility arrangements for workers. All of the countries also subsidize child care for some working parents through a variety of means, such as direct benefits to parents for child care and tax credits. Lastly, governments and employers have a range of training and apprenticeship programs to help unemployed people find jobs and to help those already in the workforce advance in their careers.”
In detailing the differences between country leave policies, Janet Gornick, a professor at Baruch College at the City University of New York, said, “American workers spend on average over 1,830 hours a year at work. That’s about 200 more hours than the Swedes, 300 more than the Belgians, and nearly 500 more than our Dutch counterparts. We even outwork our famously long-hour-working Japanese [counterparts]. And, parents are no exception in this story.” Dr. Gornick also stated, “In addition, the European Union requires that member countries guarantee all workers at least four paid weeks off per year and several require more. U.S. national law is entirely silent on paid days off. Of course, there are other types of public policies that ‘matter’ as well. For example, a number of European countries provide workers with the right to request changes to their work schedules in order to reduce their hours, to alter the timing of those hours, or both. Thus, other countries provide shorter full-time hours, a shorter work-year, and institutions that raise the quality and availability of both part-time work and work with flexible schedules. Together these measures allow many European parents to choose various types of reduced-hour work an option that’s limited and economically infeasible for a large share of American parents.”
Ellen Bravo, coordinator of the Multi-State Working Families Consortium, highlighted the limitations of the FMLA: “Although it was a critical first step, the FMLA is fairly meager. It applies only to firms of 50 or more employees and covers only those who work at least 25 hours a week and have been on the job at least a year. That leaves out more than two in five private sector workers. The narrow definition of family means those who need time to care for domestic partners or siblings or in-laws or other relatives may be out of luck.” Ms. Bravo continued, “The FMLA has another enormous limitation: it applies only to serious illness. Fortunately, most kids don’t get leukemia but they do all get stomach flus and colds, and a host of other ailments not covered by this law. Not to worry, proclaim the business lobbyists workers can use their sick days for that. But half [of] the work force and three-fourths of low-wage workers, [and] five-sixths of part-time workers don’t have any paid sick days to use. They face the loss not only of a day’s pay, but of their job. Many who do have paid sick days aren’t allowed to use it to care for a sick family member.” Ms. Bravo added, “Thanks to the lopsided share of family care giving that falls to women, the biological demands of pregnancy, and still-prevalent gender stereotyping in the workplace, women are disproportionately harmed by those outmoded systems.”
Citing statistics on unemployment rates in the U.S. and other countries between 1980 and 2004, Tim Kane, director of the Center for International Trade and Economics at the Heritage Foundation, said, “After 1980 it is clear that America has continued its productivity leadership (with higher income distribution generally), while European countries suffer high unemployment rates. The ‘humane’ policies of labor protectionism appear to have backfired, creating a less humane social arrangement.” Dr. Kane went on to say, “A deep new data set published by the World Bank in 2003 and published in the Quarterly Journal of Economics make a definitive case that the ‘Regulation of Labor’ (the title of the paper) can be harmful to macroeconomic outcomes. The…labor data cover 85 countries over dozens of labor categories…Nevertheless, [the study finds] that an increase in the employment laws index is associated with an increase in black market activity, a reduction in labor force participation, and an increase in unemployment rates (averaged over the decade).”
Dr. Kane added, “A…concern is that any congressional mandates on employers amount to a mandatory benefit, which will come at the expense of take-home pay. It is widely known that earnings have not kept up with productivity growth in the U.S. It is also widely known that the reason is the cost of the employee benefits are rising and soaking up almost all of the compensation growth. Bottom line: total compensation for workers is growing at the same pace as productivity, but there is divergence between take-home pay versus benefits. By mandating more benefits in the new labor regulation, Congress will be basically giving American workers a pay cut.” Dr. Kane also said, “[T]here [also] will be a new incentive for employers to discriminate. The good employers will make blind hiring decisions, but unscrupulous employers will have a powerful incentive to avoid employees that are most likely to qualify for the newly mandated benefits. For example, young women who are most likely to take paid maternity leave will face quiet discrimination. Good employers will face higher costs, whereas bad employers will get a competitive advantage. And it all makes economic sense…Nonetheless, the reality of bad incentives means that mandated labor regulations reward bad behavior and so should be avoided.”
Laura Kellison Wallace, manager of Work/Life and Employee Assistance Programs at SAS, also testified.
