Politics
& Government The State of
Things
. . The
State of Things: Paid Parental Leave Among
the hotter topics this session over at the Vermont Legislature is the
subject of paid parental leave. The focus has been on a bill [S.0161]
introduced in the Senate by Peter Shumlin of Windham, along with Senators
Susan Bartlett [Lamoille], James Leddy [Chittenden], Cheryl Rivers
[Windsor], and Richard Sears [Bennington]. As of this writing, it
sits with the Senate Appropriations Committee. The
rationale of the bill is this: While the current statutes allow
employees to take unpaid leave for up to 12 weeks for either
parental or family reasons, S.0161
holds that ... "Many working
Vermonters in low and moderate paying jobs who become parents are
financially unable to take leave without pay to care for a new child as
permitted under existing law, and thereby are effectively denied the
opportunity to care for and bond with a newborn or newly-adopted
child."
The bill as introduced
would set aside and channel $750,000 into the Unemployment Compensation
fund to subsidize paid parental leave for such workers.
... Should the Vermont Legislature pass such a bill? ... Ethan
Allen Think Tank Opposes the Bill
One opponent, who recently
voiced his opposition to the bill on VPR, is John McClaughry, President of
the Ethan Allen Institute, "Vermont's Free-Market Think
Tank." As a proponent of a laissez-faire, free market economy,
McClaughry understandably wants nothing to do with such government
encroachment upon the prerogatives of business operations. His
opposition, drafted prior to the bill's actual introduction, was broadcast
as a commentary entitled "It's
Back: Taxpayer Financed Parental Leave," and addresses several
key points, viz.: that what was being
touted as a "trial" run at the practice by Shumlin and
others would inevitably lead to a permanent entitlement; that
the provisions of the legislation -- specifically those allowing for
"paid leave ... taken in chunks as small as half an hour"
and the apparent lack of clarity about what "constitutes a
'serious' medical condition" -- will pose potentially
"sudden and serious workplace disruptions" both for
employers and for the co-workers of those on paid parental
leave; and, that such a law will
encourage "the least responsible employees (and their unions) to
contrive ways to game the system, and to bring grievances or even
lawsuits."
A New Entitlement?
McClaughry
is probably right on the first point: If the bill is enacted, and if
the results are successful, there will almost certainly follow a strong
attempt at another round of funding. But if, as some critics have
charged, the actual cost of the legislation far exceeds the $750,000
appropriation, there may be enough opposition to it to keep it from going
another round. This may be especially true if federally proposed tax
cuts end up reducing revenues for the State, since the State income tax is
directly tied to the federal. And as we have heard only this week,
Texas, which enacted fairly extensive tax cuts under then-governor George
W. Bush, is now facing a serious financial crisis, unable even to meet its
federal matching requirements for some critical programs. Defining
Terms
With regard to the questions about "paid leave ... taken
in chunks as small as half an hour" and what "constitutes a
'serious' medical condition," McClaughry is on thinner ice. ... The
already-existing statutes on Parental and Family Leave [21
V.S.A.§ 470- §474] make clear that employers "may require that
leave be taken in a minimum of two-hour segments."
[§472a.(a)]. As to the 'serious medical condition', that same law
also makes the issue reasonably clear: "'Serious illness' means
an accident, disease or physical or mental condition that: (A) poses
imminent danger of death; (B) requires inpatient care in a hospital; or
(C) requires continuing in-home care under the direction of a
physician." [§ 471(5)] As for the potentially
"sudden and serious workplace disruptions," here, too, the
existing statutes provide employers faced with such a situation an
'out'. According to the law, there are several cases in which the
law "shall not apply": If the employee "had been
given notice or had given notice" ... If "the
employee's job would have been terminated or the employee laid
off" ... and in yet another case, which directly
addresses McClaughry's concern -- if "the employee performed unique
services and hiring a permanent replacement during the leave ... was the
only alternative available to the employer to prevent substantial and
grievous economic injury to the employer's operation." [§ 472(f)] The
Potential for Abuse
With regard to McClaughry's concern about those
who might "game the system," here, too, he is probably partially
correct. That the law would "encourage" such gaming is
open to question. But that some would 'game' is close to
indubitable. As the Confucian Analects note: The system of
weights and measures makes thievery an easier task. Here, however,
McClaughry probably ought to realize that such 'gaming' is not restricted
to laws that seem to favor labor or what he refers to as "the control
of a liberal coalition." Many of those who benefit from the
freest of markets also have, and make use of, plenty of
opportunities to play the numbers and take advantage of such systems of
weights and measures wherever and whenever they can. Take,
for example, PepsiCo. ... For 1999, nearly every one of us
paid more in taxes than PepsiCo did. Not every one of us
collectively, mind you, but each and every one of us.
Why? Because PepsiCo, by its prudent use of the system of weights
and measures which determine tax liabilities, paid $0.00. {For this
and similar oddities, see this month's Puzzling
Evidence.} There is one other concern which
McClaughry expressed which deserves the most serious consideration, if
only because, at first blush, it appears to be the most compelling reason
for not passing the Paid Parental Leave Act. A
Disincentive to Business Development?
McClaughry is finally
concerned, however, that the bill's passage will actually discourage
businesses which might otherwise do so to expand, open up shop in, or
relocate to Vermont. As he pointed out elsewhere in his piece, 15
other states in the Union have tried, unsuccessfully, to pass such
legislation, and he believes that passage in Vermont would place us at a
distinct disadvantage. His words bear repeating: In
the eyes of people who make decisions about locating or expanding
facilities, the first state to legislate mandatory paid leave,
regardless of how it's paid for, will bear the Mark of Cain. They
will know that the legislature is under the control of a liberal
coalition eager to move on to the next costly anti-business
nostrum. They will see that state as a politically unfriendly,
high-cost economic environment, and take their employment and tax
revenues to a more congenial place.
Here,
at least in some respects, McClaughry may be correct. There
can be no question that when a business makes concrete plans for locating
or expanding facilities, such plans follow only after some hard
number-crunching. Those responsible for the bottom line must do a
cost-benefit analysis before any such undertaking; and that analysis is
likely to include not only hard numbers, but the potential for the more
qualitative impacts like the ones McClaughry mentions to adversely affect
the bottom line. But there are a couple of things Mr.
McClaughry may not be considering here. ... Business
Development & Family Values in the 21st Century
Earlier on in
his piece, he acknowledged that employers "want to retain good
workers." He goes on to note that, "Especially in a tight
labor market, they are willing to make allowances for family situations
and illnesses." If we place this acknowledgement
in the larger context, not only of Paid Parental Leave, but of the wider
economy, then the adverse impacts which McClaughry fears may be seen in a
very different light. While prospective employers might
initially view Paid Parental Leave as "politically unfriendly"
or "high-cost," prospective employees may view it quite
differently. From this side of the equation, Vermont could become
one of the more attractive places for workers to remain or relocate --
both those who may be qualified for better-paying jobs and able to take
unpaid leave, and those who may not be able to afford unpaid leave, but
who nonetheless have a commitment to family values. Such a scenario
might then encourage business development and attract prospective
employers who are looking for highly qualified or larger labor pools from
which to draw. Of course, there will always be
prospective employers ... a significant number of prospective employers,
who will not come to Vermont. The odds are, such employers are
mostly in manufacturing. And they will not come whether the Paid
Parental Leave legislation becomes law or not. ... The
fact is, such employers have already emigrated from the older industrial
Northeast, at first to the South, where both labor markets and
transportation were cheaper, and more recently, since the passage of NAFTA,
to South of the Border, where not only cheaper labor markets, but
considerably less costly regulations prevail. And with the World
Trade meeting kicking off in Québec this weekend {see this month's Working
Together}, the highest profile item on the agenda is the expansion of
a NAFTA-like agreement to the entire Western Hemisphere. Should that
come to pass, the ability of Vermont to attract business development based
primarily on the low cost of doing business here will be all but moot. One
would assume, then, that, at least in this context, Mr. McClaughry would
be opposed to lowering the cost of doing business in Vermont so
drastically that it would compete with Mexico {or Honduras, or El
Salvador} for cheap labor. ... If that is
true, then the ability of the Paid Parental Leave Act to retain or attract
prospective employees becomes a good business proposition. The bill
could contribute to the development of something which at least some
businesses will still need, businesses whose model requires something
other than the cheapest source of labor -- the need for a stable pool of
qualified and well-trained workers. In this light, one could, then,
be tempted to see Paid Parental Leave as a good business decision ... in
fact, a very savvy business decision. . *******
******* NOTE: For those who may still
be unfamiliar with the Vermont statutes already on the books with regard
to family leave, you can follow this link to 21
V.S.A.§ 470- §474 -- the Parental and Family Leave Act. . *******
******* If you would like to
submit something for our Politics & Gov't section, don't hesitate to
let us know. Simply e-mail us at politics@downstreetmagazine.com.
The e-mail should contain your name, address, and a phone number where we
can reach you. You may also send a copy of your proposed
article. The text can either be included in the body of the e-mail,
or you can send it as an attachment in just about any word processing
format. If your piece is accepted, we will pay a small honorarium
for your interest & your time. [See Freelancers
Wanted for more details.] *******
******* If you would like to advertise in this
section, or throughout the magazine, please visit our Advertising
Info Pages ... or call, write, or e-mail ads@downstreetmagazine.com. *******
******* | 