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Sunday, September 30, 2018

Paid Leave Pundits Keep Getting It Wrong

The campaign for tax-paid family leave is ramping up. On Saturday, the Wall Street Journal published an opinion piece giving voice to an argument for not only paid leave, but a mandate that fathers take an equal part of it. Opines the article's author, USA Today editor in chief Joanne Lipman:*
Paternity leave has undeniably positive effects all around. Longer leaves increase the bonding between father and child and lead to better health and cognitive outcomes, a Labor Department report found. It's also good for moms: A study in Sweden concluded that for every month a father takes off, the mother's income actually rises by 6.7%, as measured four years later.
Lipman's strategy for advocating mandatory paid leave, including a gender-biased requirement, is devious. She mixes paid-leave plans offered by employers as part of a benefits package with government-imposed, tax-funded programs both abroad and here at home at the state level. Yet the two are not comparable, either in utilization or in outcomes. Contrary to what Lipman and others suggest, most Americans do have access to paid leave. A 2013 study from the Bureau of Labor Statistics showed that almost two thirds of private-sector employees have access to paid leave for family and personal purposes. Those who want tax-paid leave only point to the 15 percent of have access to dedicated "family leave", but ignore the 49 percent who said they have access to personal leave. 

Personal leave is more flexible than dedicated family leave. It allows the employee to decide for what reasons they want to take paid time off. Under a government-run system, government will decide when, where, how and for what purpose you can take time off. As Lipman suggests, government would even decide who in your family is allowed to take paid leave. 

As for the purported health-and-wellness outcomes of paid family leave, I happen to be familiar with the literature on the subject. The Labor Department report she refers to did not produce what she suggested. It claimed to have concluded that "bonding between father and child ... lead to better health and cognitive outcomes", but it presented no tangible evidence to that effect. 

In fact, there is not a single study out there that can prove positive health-and-wellness effects of paid family leave and still meet even basic standards of quantitative analysis. Not one.

Send me any study and I will explain.

Perhaps Lipman is aware of this, and that is why she is so frugal on sources for any of the alleged factoids she presents. She treats international "evidence" with similar creativity; her reference to a Swedish study is void of traceable references. I am aware of no such data out of Sweden, but even if we accepted Lipman's claims at face value, it might be worth noting that she fails to mention how the Swedes pay for their paid-leave program. Would Lipman be able to keep all her employees at their current salaries, wages, benefits and hours, if the payroll taxes she has to pay went up from just over 15 percent to 31 percent?

In fact, right here is where paid-leave pundits seal their lips. The best example is the debate over Senator Marco Rubio's paid-leave idea. The good senator, together with conservative Independent Women's Forum and other big-government conservatives, carefully ignore the fact that to pay for their shiny new entitlement,

a) We will have to borrow even more money and run up an endless pile of debt; or
b) We will have to accept tax hikes in the vicinity of $500-700 billion per year. 

At a point in time when our national debt is about to overtake our military in running costs to taxpayers, adding a new entitlement of the same fiscal magnitude would be reckless. But wait - there is more! Senator Rubio's paid-leave proposal, which is supposed to piggy-back on Social Security, will put Social Security on a fast track to its already-pending bankruptcy. Not only will paid leave destroy the American economy, but it will pull Social Security down with it...

There is little doubt what the real purpose is behind Rubio's paid-leave plan: it is a bribe to American families to make them accept a massive hike in social-security taxes. That tax hike is needed to save Social Security from certain bankruptcy; the reasoning behind it is that if people think they get some new perk from government, they are more inclined to accept big tax hikes. 

Since the economic case against tax-paid family leave is so strong, it is difficult to the brink of impossible to comprehend why so many conservatives want it. It is far easier to see why liberals like Joanne Lipman are all for it, but why would those who claim to be against big government want bigger government?

America's conservatives should stop kidding themselves. Paid family leave is egalitarianism, and contrary to what some irresponsibly naive conservatives believe, there is no such thing as egalitarianism on the right. Either you believe in the republic our Founding Fathers created, or you believe in economic redistribution and the Scandinavian welfare state. There is nothing in between. The push for paid family leave is not just a benevolent effort to marginally adjust tax-paid entitlements. It is part of a major effort to finalize the construction of the Scandinavian welfare state

Dedicated leftists will continue to push for paid family leave precisely because they admire the crumbling Swedish welfare state. To be fair, there is a lot of people out there who can't see straight when it comes to my native country, and who conveniently ignore its crumbling economy. But maybe conservatives will actually consider a better idea than to go along with the finalization of the egalitarian welfare state. Why not try family savings accounts instead? This is a solution that imposes an absolute minimum of restrictions on families in their private lives, and actually gives them back some control over the taxes they pay.

Maybe that last point is enough of a problem to derail the idea in Congress... but at least America's conservatives ought to find it both fiscally sound and compatible with their own ideology. 
*) Online version requires subscription; see page C4, Review section of print edition.

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