Tossing Free Trinkets—Obama’s Mandatory Paid Leave Proposal

Standing high at the rostrum in the House of Representatives during his State of the Union speech, President Obama acts like he’s throwing free trinkets off a tall Mardi Gras parade float. The problem is that the shiny doubloons he throws are not free but rather surreptitiously billed to taxpayers. And so it is with the President’s proposal to mandate paid leave.

On January 14, 2015, on a blog post on the business networking site LinkedIn, Senior Obama adviser Valerie Jarrett unveiled the President’s “Healthy Families Act.” She said she strategically targeted LinkedIn as “the world's largest online audience of professionals” for the announcement, because, Jarrett claimed, “These are the policies that will attract the best new talent. They are the policies that will make the employees you hire more productive—and encourage them to stay longer.”

Jarrett announced that, “the President will sign a Presidential Memorandum that will ensure federal employees have access to at least 6 weeks of paid sick leave when a new child arrives…” The Guardian reports that this is part of a strategy “by the White House to kick-start legislative efforts…” President Obama is expected to challenge Congress to apply the same six weeks of paid sick leave to its own staff.

Financially, the biggest part of the President’s proposal is $2 billion of federal tax dollars to be appropriated to states for establishing paid leave mandates. The President is looking at a total of $1 million in existing funds for grants to states and municipalities to conduct feasibility studies for paid-leave mandates.

Both the Healthy Families Act and CAP’s proposal envision many situations qualifying for paid leave. For example, CAP writes, “Paid sick leave could also help as long as parents—both married and unmarried—can use it to attend couples counseling.” One could envision virtually every employee finding a qualifying reason to use the leave.

The Department of Labor explains that the existing Family and Medical Leave Act “entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance…” Presently eligible employees are guaranteed 26 work weeks of leave each year to care for a seriously ill military spouse, child, parent, or next of kin, or 12 work weeks of leave each year for a birth, adoption, care of seriously ill spouse, child, parent, or self.

The White House fact sheet states:

In 2006, San Francisco became the first locality in the Nation to guarantee access to earned sick days. In 2008, the District of Columbia followed suit, passing a paid sick days law that also included paid “safe” days for victims of domestic violence, sexual assault, and stalking. In 2011, Connecticut became the first state to pass a statewide paid sick days law. It was followed by California and this year, voters in Massachusetts supported earned sick days by overwhelming majority. A number of cities have also recently enacted laws allowing workers to earn and accrue sick leave, including Seattle, Portland, New York City, Newark, San Diego, Eugene, and Oakland.

While the left is advancing a statistic that “43 million private-sector workers are without any paid sick leave,” according to a survey by the Society of Human Resources Management, 91 percent of businesses currently offer some form of paid sick leave to employees.

House Education and the Workforce Committee Chairman John Kline (R-Minn.) stated:

Two years ago, the House passed legislation that would give workers the opportunity to choose paid time off for working overtime hours. This new flexibility would help working moms and dads take paid time off to care for a sick child, visit an aging relative, or attend a child’s sporting event. Instead of supporting this effort, the Obama administration threatened to veto the bill, and it died in the Democrat-controlled Senate.

Look for House Republicans—and perhaps even Senate Republicans—to push votes for this flexibility again in the 114th Congress.

Employers are unhappy at the prospect of government increasingly controlling pay and benefits. The Hill reports that National Federation of Independent Business (NFIB) members are “opposed to it because they don’t want the government telling them what to do.”

Among an explosion of regulatory controls on employers, this present proposal is to force employers to pay for people not to work.

Furthermore, as James Sherk of the Heritage Foundation warns:

[M]ake no mistake: The president’s call for mandatory paid sick leave would simultaneously cut workers’ pay… Economists have repeatedly found that when the government requires businesses to offer a benefit, they do so—and take the cost out of workers’ pay.

Sherk continues:

Ironically, some of the best research on this comes from Jonathan Gruber, the Obamacare architect [exposed by the Competitive Enterprise Institute] who boasted that the healthcare law takes advantage of Americans’ “stupidity.” Gruber’s research finds that mandated increases in medical benefits and mandatory workers compensation insurance lead to offsetting reductions in cash wages.

The popularity of Obama’s paid sick leave proposal depends on workers not realizing it ultimately comes out of their paychecks. If the president’s proposal becomes law, many workers will lose the equivalent of seven days of pay a year.

As for the $2 billion proposed to be transferred to states, the money would come with strings attached. A federal partnership here would mean federal control. As with other federal “partnerships,” in the end the federal money would inevitably pale in comparison to the fiscal encumbrances states would assume.

Prospects for the proposal are poor. As Democratic presidential frontrunner Hillary Clinton assesses, “I don’t think, politically, we could get it now.” But that won’t stop supporters of mandatory paid leave from pushing this and other costly bad policies like taxpayer-paid child care.

Furthermore, as the Guardian notes, “Obama’s intervention … suggests Democrats hope to make the policy an issue for emerging 2016 presidential candidates.”

It’s worth noting that the drum beat among Democrats for this proposal has been heard for some time, as the following chronology shows:

  • In March, 2013, Rep. Rosa DeLauro (D-Conn.)—Ranking Member on the House Labor, Health, Human Services, and Education Appropriations Subcommittee—and Sen. Tom Harkin (D-Iowa) introduced the Healthy Families Act to mandate paid leave.
  • In December, 2013, Sens. DeLauro and Kirsten Gillibrand (D-N.Y.) introduced the Family and Medical Insurance Leave (FAMILY) Act for a federal mandate of paid family and medical leave.
  • Since March, 2014, the U.S. Department of Labor monthly newsletters have pushed the paid leave concept, as has Secretary of Labor Tom Perez in a series of speeches.
  • The Department of Labor’s lobbying efforts include a website that proclaims, “It’s Time for America to #LeadOnLeave,” and includes a video that laments the United States is not more like Germany.
  • In June 2014, The White House hosted a “Summit on Working Families,” featuring mandatory paid leave as one of the objectives.
  • Also in June, the White House Council on Economic Advisers released a report on the economics of paid leave.
  • In September, Secretary Perez announced “$500,000 in total grants for states to explore the feasibility and evaluate the effectiveness of paid leave policies.”
  • On November 20, Politico Pro and the International Franchise Association sponsored a forum on labor and employment issues where Rep. DeLauro pushed the concept and called on lawmakers to “[l]ook at paid sick days, paid family leave.”
  • On January 13, 2015, the Center for American Progress (CAP) released its plan to impose paid family and sick leave upon employers.
  • On January 14, 2015, in a blog post on LinkedIn, Obama adviser Valerie Jarrett announced the administration’s paid-leave proposal and the White House released a fact sheet for it.