The United States likes to think of itself as an exemplar — a shining city on a hill that lights humanity’s path to a better tomorrow. And in some respects, America’s self-image aligns with its reality. From our peerless research universities to our pathbreaking biotech sector to our first-in-class fleet of homicidal robo-planes, the U.S. is at the bleeding edge of many fields of human endeavor.
On paid family leave, however, we’re a century behind.
In 1919, the League of Nations declared that working mothers had a right to 12 weeks of paid maternity leave. Today, virtually every developed country boasts a paid-family-leave program that exceeds the 1919 standard — except for the United States, which still has no national paid-leave policy whatsoever.
But that might be about to change. Joe Biden campaigned on a promise to establish a comprehensive paid-family-leave program. And earlier this month, the House Ways and Means Committee advanced legislation that would do just that. That bill will need to clear many obstacles before making it into law. And the legislation has many flaws that will need to be redressed, if America is to achieve truly universal paid family leave. But the U.S. is closer than ever before to building a family welfare state fit for the early-20th century.
Here’s a quick rundown of why America’s current approach to family leave is so dysfunctional, how it got to be that way, and what to expect when you’re expecting the U.S. Congress to pass a paid-family-leave bill in 2021.
America’s approach to paid family leave is on par with Papua New Guinea’s.
When a couple brings a new life into Sweden, they are entitled to 71 weeks of leave, during which time they receive 78 percent of their normal earnings. In the United Kingdom, couples may take up to 41 weeks of combined paid parental leave. Just across our northern border, Canadians may take up to 50 weeks.
America is the only developed country whose citizens are entitled to none. And we aren’t just an outlier within the OECD. A 2014 United Nations report found that, among the 185 countries with relevant data, only three declined to guarantee some form of paid maternity leave to their citizens: Oman, Papua New Guinea, and the United States. Only the latter two nations are still holding out today.
The U.S. has made some fledging progress toward achieving early-20th-century labor standards. In 1993, Bill Clinton signed the Family and Medical Leave Act (FMLA), which requires most employers to provide workers with 12 weeks of job-protected unpaid leave to care for a new child or gravely ill family member. Every other OECD country requires employers to offer a longer period of job-protected leave. And thanks to our loophole-ridden labor laws, about 40 percent of U.S. workers don’t even qualify for the FMLA’s 12 weeks. But hey, it was a start.
The pace of progress has picked up in recent years. Nine U.S. states now have paid family- and medical-leave programs, of which five were established since 2016. Last year, all federal employees secured 12 weeks of paid parental leave through a law signed by Donald Trump. Meanwhile, in response to the COVID pandemic, Congress created the first-ever national paid-leave mandate. Under the emergency program, covered employers were required to give workers up to 50 days of paid leave at two-thirds of their normal wages or salary. The government would then reimburse employers for this expense.
Alas, this policy was both temporary and anything but universal. Employers with more than 500 employees were exempt from the mandate (on the grounds that corporations that large can afford to give their workers paid family leave without the government’s help), as were employers with fewer than 50 employees. Further, the law only provided 50 days of paid leave to parents with children at home because of closed schools or daycares, rather than to all Americans with a sick loved one to care for or who were personally battling illness themselves.
The absence of a comprehensive national paid-leave program exacerbates the inequities of American life. According to the Kaiser Family Foundation, only 25 percent of U.S. firms offer some form of paid family leave, and companies with high-wage workforces are nearly twice as likely to offer such benefits as those with few high-paid employees. That finding comports with Labor Department data, which shows workers in the highest income quartile to be roughly three times more likely to have paid-parental-leave benefits than those in the lowest quartile.
This form of inequality is implicated in more fundamental ones. A growing body of sociological research suggests that disparities in the early childhood experiences of well-born and disadvantaged children play a role in reproducing — and widening — invidious class divides. And studies have demonstrated an association between paid-leave programs and improvements in both child development and maternal well-being. Taken together, this suggests that the class disparities in access to paid leave help perpetuate broader inequalities across the generations. Separately, paid-leave programs appear to improve job continuity and labor-market participation among women. This not only aids growth by expanding the supply of labor in the economy. It also mitigates gender inequalities in earnings and thus the dependence of women on male partners for material security. So long as paid leave remains a luxury of the labor elite, gaps in economic power between men and women will be difficult to close.
What explains America’s exceptional lack of a federal paid-leave program?
It’s always difficult to explain why any given country took a divergent historical path from other similar nations. Human events are replete with uncontrolled variables. That said, there are a few factors that likely contributed to America’s becoming such an outlier on paid family leave.
One is America’s relative insulation from the horrors of World War II. As with most other elements of the welfare state, the first paid-leave programs were byproducts of mass bloodletting. During the First World War, European women secured unionized factory jobs in record numbers as the necessity of churning out munitions — and the dearth of young men on the home front — forced employers and male trade unionists to loosen norms of gender discrimination. This wartime experience left female workers more class-conscious and organized. When peace arrived, they pushed for labor regulations that would help women reconcile their maternal and economic ambitions (hence, the League of Nations’ call for paid maternity leave in 1919).
Still, paid-leave policies did not become the norm throughout the West until after the Second World War. As the historian Mona Siegel argues, in the context of postwar Europe, the ambitions of women’s-rights advocates came into alignment with the needs of national economies. Their working-age populations thinned by mass death, European nations were in desperate need of both more labor and more babies. Increasing the supply of both required making it more tenable for women to have demanding jobs and large families. Paid leave helped to square that circle.
The United States suffered relatively few casualties during World War Two. Whereas France lost 1.9 percent of its population to the conflict, America lost just 0.3 percent. Meanwhile, America’s industrial base had not been devastated by aerial bombing but, rather, been vastly expanded by overseas demand. These realities, combined with the nation’s relatively open immigration policies, made it less economically pressing for the U.S. to accommodate women workers. And the relative weakness of the American left — particularly after the postwar Red Scare — made it politically unnecessary to enact robust family-welfare policies. Thus the American and European approaches to family leave sharply diverged.
More proximately, efforts to pass a paid-family-leave policy in recent years have faltered in the face of the GOP’s aversion to taxation and an inclusive conception of the family. Many Republicans espouse support for paid leave, as the policy appeals to both fiscally conservative professional women and “pro-family” social conservatives. But the only funding mechanism that Republicans have been willing to entertain is allowing new parents to withdraw money from Social Security today in exchange for receiving leaner benefits tomorrow. And Republicans are also less interested in providing paid leave either to nontraditional families or to individuals caring for sick family members rather than for newborn children. All this has made it difficult for Democrats and Republicans to reach consensus on a national paid-leave policy. Since control of the federal government was divided between the two parties for most of the past decade, this lack of bipartisan consensus helped frustrate recent attempts at reform.
What House Democrats’ paid-leave proposal would do.
For years, the Democratic Party’s signature paid-leave legislation was Senator Kirsten Gilibrand’s FAMILY Act. That bill would guarantee 12 weeks of publicly financed paid leave, at a minimum of two-thirds of one’s previous wages (up to a limit of $4,000 a month), to workers who are:
• caring for newborn children or seriously ill family members
• battling a serious illness
• coping with the adverse consequences of a loved one’s military deployment
• mourning a lost loved one
• or recovering from an incident of domestic violence or a sexual assault
The bill finances those benefits through a 0.4 percent payroll tax, split between firms and their employees. This is the same funding structure used by Social Security and all state-level paid-leave programs.
But the Family Act is not the version of paid leave that’s most likely to make it into law. Last week, the House Ways and Means Committee approved a similar but distinct paid-leave proposal. The new legislation, authored by the committee’s chairman, Richard Neal, retains the bulk of the Family Act’s basic design: It guarantees paid leave for the same list of reasons, at roughly the same rate of reimbursement, for the same length of time.
But there are a few critical differences between the two plans. One is that Neal’s proposal lacks a minimum benefit. In order to ensure that part-time workers with low-earnings secure non-negligible leave payments, the FAMILY Act guaranteed all eligible workers at least $580 a month in cash aid, even if they would be entitled to less money under the bill’s wage-replacement formula. The two bills also have different financing mechanisms. Whereas the FAMILY Act is funded through a dedicated payroll tax, Neal’s legislation is paid for out of general tax revenue.
The most significant difference, though, concerns each bill’s mode of administration. The FAMILY Act has the same model as Social Security — a unified federal program. Neal’s bill has a much more complex operating structure. In brief, the proposal subsidizes employer-provided paid-leave insurance plans and state paid-leave programs while reserving direct federal benefits as a backup for Americans who lack access to a state or employer plan. In other words, the legislation is modeled less on Social Security than on the tangled web of public-private and federal-state partnerships that the U.S. health-care system comprises.
This policy design poses some serious administrative hazards. As Matt Bruenig of the People’s Policy project argues:
By including private insurance in this way, the bill ensures that we will waste some of our paid leave money on private insurer overhead and profits. It also invites employers and insurers to profit off of benefit denials and cream-skimming of various sorts. An employer who has a workforce that takes a below-average amount of paid leave could conceivably get an insurance contract that charges less than the grant the Treasury pays them and then pocket the difference.
The employer and state plans will also massively complicate the system for individuals trying to take paid leave. Individuals seeking leave have to figure out firstly whether they are covered by an employer plan, secondly whether they are covered by a state plan, and then, if not, apply to the federal government for benefits and, in that process, prove they aren’t covered by an employer or state. What happens to someone who was covered by an employer plan at the beginning of the year but was later fired and is now seeking paid leave? According to the bill text, their name will show up in the Treasury database as being covered by their prior employer even though they no longer are.
Neal’s plan also suffers from shortcomings common to all of the Democrats’ recent paid-leave proposals. The 12-week duration of its individual benefits trails the OECD average of 18 weeks. Further, the duration rules are structured in a manner that disadvantages single parents relative to co-parenting couples. The latter can stagger their respective 12-week leaves, thereby avoiding child-care expenses for a full six months. Single parents are not, generally, more capable of incurring the costs of child care than two-earner couples are. Nor are the children of single parents generally in less need of parental nurturing during their infanthood. A more equitable policy design — common to paid-leave programs in many other countries — would provide all parental units with the same amount of paid time off and allow couples to divide the time between each other as they see fit, while enabling single parents to take the same amount of total leave as couples do.
Separately, the paid leave policy’s eligibility requirements likely render upwards of 30 percent of all new parents ineligible for cash support during their newborns’ first months. This is because parents must show labor-market earnings in the months before their desired leave. This excludes parents who have children while attending high-school or college, those suffering long-term unemployment, and the disabled, among others. If the point of paid leave is to allow parents to bond and nurture their newborn children, it is not obvious why unemployed parents should not be provided with at least a modest 12-week subsidy following their infants’ birth.
Why a (deeply flawed and nonuniversal) national paid-leave program will probably pass.
Neal’s paid leave proposal has made it out of committee. But now, like virtually every other item on the Democratic agenda — from green investment to universal prekindergarten to child allowances — the fate of a national paid-leave program rests on the success or failure of a single megabill.
This strange state of affairs is the product of arcane Senate conventions and the thinness of the Democratic Party’s congressional majorities. Moderate Senate Democrats are committed to preserving the legislative filibuster, which has established a de facto 60-vote threshold for passing major bills out of Congress’s upper chamber. And since Democrats hold only a bare majority in the Senate, they need to defer to Joe Manchin’s procedural tastes. Fortunately, there is one end run around the filibuster: Once every fiscal year, Senate majorities can pass a single package of measures that concern the federal budget with a mere 51 votes through a process known as “budget reconciliation.” For this reason, the Democratic leadership has stuffed all of Joe Biden’s partisan economic proposals into one $3.5 trillion bill. Passing that mammoth legislation will now require congressional Democrats to achieve unanimity over the fine details of a dizzying array of new tax increases and federal expenditures.
That reality has triggered a series of staring contests between the party’s various factions, each of which has the votes to kill Biden’s entire agenda if its demands aren’t met. Joe Manchin and Kyrsten Sinema have vowed to vote against the package if its price tag isn’t lowered. Progressives have threatened to oppose it if the price is cut. Democrats who represent high-tax jurisdictions have promised to torpedo the bill if it doesn’t lift the cap on the state and local tax deduction, while the pharmaceutical industries’ Democratic allies have promised to veto the bill if it allows Medicare to negotiate drug prices. If nobody’s blinks, Biden’s entire agenda will collapse — and take paid family leave down with it.
But there is reason to believe that someone will blink and that said someone will not be paid-leave advocates. Conventional wisdom on Capitol Hill holds that Manchin and Sinema will bargain the price of the reconciliation package down, thereby forcing the abandonment of some policy initiatives. Still, the Democratic caucus is likely to arrive at a compromise that progressives can live with, since the political and substantive costs of total legislative failure are so high. Paid leave is likely to be part of that compromise, as it is uncontroversial among moderate Democrats and a priority for the party’s leadership.
By the time Neal’s paid-leave proposal makes it through the gauntlet of reconciliation, however, it’s liable to be even more flawed and nonuniversal than it is today. For one thing, there’s a good chance that Democrats will end up delaying the program’s onset. As currently written, Neal’s paid-leave plan takes full effect in 2023. In order to keep the reconciliation package’s overall cost below Manchin’s red line, Democrats may move that start date toward the latter part of the decade. This scenario is especially plausible because Joe Biden’s initial paid-leave proposal, included in his American Families plan, phased in gradually over a ten-year period. That structure enabled the president to limit the program’s estimated price (within the ten-year budget window) to $225 billion. By contrast, the FAMILY Act has a projected cost of more than $320 billion.
If the legislative process is liable to delay the paid-leave program’s onset, it could also gut one of the policy’s essential features. In order to qualify for passage through reconciliation, a measure must primarily concern taxing and spending — not regulating the economy. Paid-leave benefits meet this criterion. But an accompanying rule forbidding employers from firing workers who take paid leave might not. After all, such a rule would function as a regulatory mandate on employers akin to the minimum wage. And earlier this year, the Senate parliamentarian ruled that minimum-wage hikes are not reconciliation eligible.
The existence of the FMLA mitigates this problem. Even if Democrats pass a version of paid leave that lacks a job-protection mandate, workers covered by the 1993 law will be able to take 12 weeks of paid leave secure in the knowledge that they can’t be fired for doing so. But roughly 40 percent of U.S. workers do not qualify for job-protected leave under the FMLA’s stringent eligibility requirements. A reconciliation-eligible paid-leave policy might provide these workers with benefits they don’t feel comfortable using.
By the end of 2021, the United States might have a national paid-leave program that meets the labor standards of 1919. But even in the best-case scenario, America’s paid-leave program will remain less generous and inclusive than those of other developed countries.