By Skylar Burris, Research Associate
For too many American families, choosing to care for a child or a sick family member becomes a choice between having or leaving a job. During the pandemic, millions of caregivers lost the ability to make that choice. At a recent Business Forward briefing, U.S. Deputy Secretary of Commerce Don Graves stated, “We have millions of workers, especially women of color, who are in the home and taking care of their kids, taking care of seniors who don’t have a place to go, and taking care of disabled family members and loved ones.”
Despite making up roughly 46 percent of the workforce, women accounted for 54 percent of workforce exits during the pandemic. Without any policy changes, the employment rate for women is not expected to fully recover until 2024 — two full years after the same recovery for men. In a normal year, working women in the U.S. lose an estimated $20.4 billion in potential wages due to lack of child care and paid leave. If conditions for families do not improve—and if the levels of maternal labor force participation and work hours experienced during the April 2020 first-wave peak of infections and COVID-19 lockdowns persist long term—lost wages would amount to $64.5 billion per year. Graves highlighted the urgency for action: “We need to make certain that we are providing the support and resources to help get them back into the workforce.” A federal paid leave policy would do just that.
The U.S. is one of the few countries in the world without a national, guaranteed paid family leave policy. Only California, Rhode Island, and New Jersey have managed to create comprehensive plans for paid family and medical leave. Current legislation on family leave, the Family and Medical Leave Act (1993), offers 12 weeks of unpaid time off, and only applies to workers at companies with 50 or more employees. As a result, fewer than 1 in 5 American workers have access to paid family leave.
The lack of national paid family leave hurts workers and employers alike. Almost two-thirds of parents struggling to find child care options report leaving work early and more than half report feeling distracted during, if not missing, full days of work. Eighty-six percent of primary caregivers said child care challenges negatively impacted their time spent at work. Employers lose roughly $12.7 billion in a normal year due to productivity problems related to child care challenges.
Parents are returning to work following the increase in COVID vaccinations, but the rate of mothers returning has stalled — the number of mothers in the workforce with preschool or school-aged children is down 4 percent from 2019. Before the pandemic, researchers at Cornell University identified the lack of paid family leave and other “family-friendly” policies in the U.S. as factors contributing to the sharp decline in women’s labor force participation; from 2000 to 2019, women’s workforce participation rate dropped from 7th to 20th place among 22 of the world’s most advanced economies. If the U.S. were to invest more in care infrastructure, including a national paid leave program, we could start to catch up to other countries’ rates of women’s labor force participation and representation in the workforce.
Currently, the cost of offering paid family leave policies primarily falls on the employer. Even in states with comprehensive paid leave legislation, employers are sometimes required to foot the bill. The Biden-Harris Administration’s American Families Plan (AFP) would change that. In addition to providing 12 weeks of federally-funded paid leave, the plan allocates $225 billion for covering child care costs for low income and middle class parents with children five or younger, and sets aside $200 billion to make pre-kindergarten classes free to three- and four-year-olds regardless of their families’ incomes. The $1.8 trillion AFP reduces child care costs and offers free universal pre-school, saving families thousands of dollars, and bringing the U.S up to speed with the rest of the world. It would also level the playing field between large employers and small businesses that don’t have the resources to provide paid leave to themselves or to their employees.
To learn more about the Biden-Harris Administration’s proposed investments in care infrastructure, check out the White House Fact Sheet here.
To share how a national paid leave policy would affect your business, please fill out this feedback form.