State governments may be the new laboratory for paid leave policies

The American Enterprise Institute/Brookings Institution Working Group on Paid Leave has produced a series of reports and research findings over the past several years as an attempt to find bipartisan common ground on paid family and medical leave policies. Co-directed by Isabel Sawhill of Brookings and Aparna Mathur of AEI (now on the White House Council of Economic Advisors) the task force is winding down its work with several new reports. Working group member Angela Rachidi of AEI gives an overview of that new work as well as her outlook for legislative movement on paid leave in the new Congress. This transcript has been lightly edited for length and clarity.

The AEI/Brookings Paid Leave task force is out with some new publications recently. Can you tell us about those?

The publication we just came out with is really the culmination of the effort between Brookings and AEI to study paid leave in the US. These two volumes are an outgrowth of discussions we had as a work group in which we recognized that on the family caregiving side of leave policies and on the medical leave side of things, there was quite a bit that was still unknown. The research base wasn’t as strong as on the parental leave side of things. So that was the motivating factor behind these volumes. Belle Sawhill and Aparna Mathur had pulled together the experts in both fields to produce those volumes and we are happy that they have been released.

The main takeaways from the medical side are that we know quite a bit of descriptive information on the use of medical leave at the state level – I think it’s nine states now that have some kind of family and medical leave policy. We know quite a bit about who gets it and how long they get it from the state programs that have been around for a while, like temporary disability in New York and New Jersey. And it’s pretty different across states; it’s not a uniform policy across states which then translates into beneficiaries not having uniform access to those policies. The research gaps that remain are how those policies impact labor force participation. There is one article in the medical leave volume written by Christine Jolls at Yale University that relied on original empirical work that looked at the introduction of the Family and Medical Leave Act and what that did to labor force participation, suggesting that even though the leave was unpaid it still had small effects on labor force participation, but probably not enough to matter all that much from a policy perspective. In the chapter on sick leave policies, we had work suggesting that the cities and few states that have mandated sick leave have increased access and have not had large impacts on employment or employers, suggesting that those policies, if drafted the right way, can benefit workers without creating major negative effects for employers.

I think the caregiving volume is also very useful because we pull together everything that we know about caregiving leave policies. The strength of it, again, is in the descriptive information about who accesses it, how long they access it and what states have done around caregiving leave. We know a lot less on the outcomes related to family caregiving and the impacts it has on health and labor force participation remain pretty open questions. So, ultimately both volumes concluded, yes, we know quite a bit, but we still have more to learn and that obviously has implications for enacting major federal legislation. There aren’t major recommendations in either volume; there are introductions in both volumes but we kind of stayed away from making recommendations for policymakers. It’s geared more toward being a resource for policymakers as they debate some of these issues.

And does this bring the work of the task force to a close?

This really was the culmination. We will be doing a public event in February and we’ll invite some of the authors to discuss their chapters, and that will likely be the final public event for the work group. There are still gaps to be filled from a research perspective but it likely won’t happen through this work group. It would have to be something else that we would put together.

How have the paid leave policies enacted as a response to the pandemic added to what we know about this issue?

 The Families First Coronavirus Relief Act, which was the first pandemic relief bill, implemented paid leave for childcare and well as sick leave and family caregiving but only for workers at small businesses. Those businesses were supposed to provide that paid leave and then get reimbursed by the federal government. There’s still a lot of questions about that. On one side, some of the data coming out suggest that that type of leave was not very widely used or accessed, likely because so many people were unemployed. The way things played out, leave was less needed because workers were either furloughed or lost their jobs. We know from federal data that a lot of the funds allocated to that aspect of the bill were largely unspent but there’s still some questions because a lot of that hasn’t been reconciled yet. There’s still research to be done but my expectation is that small provision in that bill was largely irrelevant for what was happening with COVID. I have a new report out that’s a survey of working age adults and we asked specifically about leave and childcare. We found that about 20% of the working age adults who were working before the pandemic did take leave and most of it was paid. But we also found about 20% expressed an unmet need. The reasons for that were similar to reasons you saw before the pandemic, largely that people couldn’t afford it and some reasons like too much work to do and that people wanted to save leave. The concerning part is that 20% with an unmet need for leave during a pandemic is a large chunk of people. And that’s even with leave being offered by some employers and the leave offered in the Families First Act.

So, moving forward, while knowing that we won’t know for a few weeks who will control the Senate, how do you see the outlook for passage of paid leave legislation in the new Congress?

I think it’s still a very hard sell for the Republicans. So, if you have a Senate that’s still in the hands of the Republicans, I think it’s still going to continue to be a hard sell. Even with the volumes that we’ve put out, I don’t see that moving anyone who’s on the fence because there’s so much that’s still unknown. I’m not all that optimistic that you would see something happen at the federal level, but I think maybe at the state level, you might start to see policymakers trying things. The experience that states – and businesses – have had with COVID and health and being healthy and not having unhealthy people at work might prompt some states to do some things. But I don’t see much happening at the federal level.

So even if the House Democrats were to coalesce around a much narrower sort of bill, you’re not bullish on the prospects in the Senate?

I don’t think for a permanent policy. I think there could still be something COVID-related that could still happen, but my sense is I don’t see a shift toward a fundamental change to offer paid leave through the federal government.

Are there particular states to keep an eye on?

I’m not sure there are specific states to watch, but it will be interesting to see if it bubbles up. When you think of a state like Florida, which just passed a minimum wage increase, which was sort of a surprise, you start to think, if they’re going to pass that, why not paid leave? You know these discussions are going on at the state level, it’s just that they don’t always rise to the surface. But you see something like that happen and you think, well, maybe they will rise to the surface. Democrats are proposing things in a lot of these states but it’s just that they don’t seem to get anywhere. You wonder if because of COVID, some of this will gain a little bit of traction in some of these states. It’s certainly something to keep an eye on.

And this is also an area where there’s room for more research, whether it’s research or analysis of data, but looking at states that had these policies in place during COVID and did their populations differ in terms of leave-taking and to the extent that you can look at outcomes, did they differ across these states?

And what do you see as the big stumbling block for Senate Republicans? Does it continue to be the potential impact on small businesses? Is it more a deficit issue? Or the need for more data from states where paid leave has been tried? Or all of the above?

What I’m hearing is more of the impact on businesses and how it might negatively affect economic growth. The gap in knowledge is part of that because there’s still this idea that a federal paid leave policy would impact businesses negatively, but we don’t really know enough yet if those bad outcomes are actually born out when you have programs like this. The lack of research is contributing to this idea that the policy would negatively affect growth. There’s also just this general fear of social insurance programs getting big too fast and becoming unfunded. That’s part of it as well – the proposals out there are too big, too fast.

So, in that sense the pandemic, for some in Congress, becomes a reason not to go forward because you already have such deep concern for small businesses.

Exactly. And I think that’s the challenging position policymakers are in. On the one side, they’re hearing from workers that need that support and protection and the other side is the businesses. I still think the parental leave is a bit of a separate issue – we did see some Republicans on board with an assortment of proposals. There’s a little bit more of a willingness to find some creative solutions around parental leave but that just hasn’t translated into caregiving and medical leave.

And finally, the Biden-Harris administration supports the Family Act as the vehicle to deal with these issues?

That’s right, and that’s basically FMLA, but funded through a payroll tax.