Isabel: The public opinion polling suggests the public, whether they're Democrats or Republicans,
are all in favor by large majorities of having a paid leave policy.
Aparna: Hi, I'm Aparna Mathur, and I'm a resident scholar in economic policy studies at the
American Enterprise Institute.
And I'm really glad to have my co-director from Brookings Isabel Sawhill.
Isabel is a senior fellow at the Brookings Institution, and we've both been working on
what we call the AEI Brookings Paid Family Leave project, which has involved people from
multiple organizations, people with different backgrounds, different perspectives, some
of them have worked in Republican administrations, some more on the Democrat side.
This has been a year-long project.
We've invited a diverse group of experts, people from academia as well.
And we're really excited to be talking about the issue which is the provision of a federal
paid family leave policy in the United States.
Isabel, I'm just gonna quickly turn to you, and, you know, maybe you can talk a little
bit about why we felt the need to bring together this group of experts and why we need this
policy in the U.S.
Isabel: I think the main reason that the U.S. needs a paid family leave policy is because
we're the only country in the advanced world that doesn't have such a policy right now.
So if you are a young parent and you have a new baby and you also have a job, you have
no way, if you're dependent upon your earnings from work, to stay home with that baby.
And so we think this is particularly a problem for low-wage workers who can't afford to give
up the income, but who also need to be home with a new baby.
So that, I think, was the basic motivation for this group's work.
And like you, Aparna, I'm really excited that we got through this process with such a terrific
group of people.
And although we argued, and debated, and didn't always agree.
Aparna: That's right.
Isabel: In the end, we got to a place where we were able to find some common ground and
make some recommendations.
Aparna: That's exactly right.
And I think the other reason, you know, when you look at sort of the changing demographics
in the U.S. today, the fact that we have many more mothers actively participating in the
workforce, the fact that we have, you know, the CEA did an interesting study, the Council
of Economic Advisers did an interesting study, saying nearly all of the middle income growth
since the 1970s can be attributed to the increased labor force participation of women and especially,
you know, mothers with children.
And so it's really interesting to me that, you know, we're at a situation in the U.S.
today where we're still debating whether mothers and, you know, fathers, should be able to
take a few weeks off at the time of, you know, having a child when we recognize the challenges
that working families face in, you know, dealing with work, having child care responsibilities
at home.
I think, you know, this is a policy whose, as we say, in our report, whose time has come.
Isabel: Yeah, let me just reinforce something you just said because I think it's so important
and not well-understood.
And that is this fact that if we care about economic growth in the United States, if we
think that we're going to be able to raise the growth rate from where it is now which
is around 2% or a little bit under to something like 3% or higher, the only way we're gonna
be able to do that is if we have more people working.
We're an aging population.
Therefore, labor force participation is falling for that reason alone.
The only bright spot in this picture in terms of economic growth is the female labor force
as you just said.
And virtually, all of the growth in middle class incomes in recent decades has been because
more women were working.
And now, we're in a situation where if you look at the U.S., and you look at how much
women are working in the U.S., it's going down whereas it's still going up in other
countries that we compete with.
Aparna: That's absolutely true.
And also talking about aging, well, I'm glad you brought that in because I think we need
to clarify why we focused on just parental leave.
And, you know, as you said, families have a lot of responsibilities which is not just
caregiving for children, but caregiving for, you know, elderly parents or even, you know,
the need to take time off for your own illness.
And I think we need to make clear that we are not sort of discounting those other reasons
for leave.
I think we, you know, as a group, we were very clear that the reason we want to focus
on parental leave is because we don't have enough data.
We don't have enough analysis of how we would design a leave policy that covers not just
parents, but also the need for leave other reasons.
But we hope to get into that over the course of the next year.
Isabel: Yeah, I think that it's really again, worth emphasizing that there are sort of three
important reasons to take leave.
One is birth or adoption of a baby, or even adopting a child from foster care.
But a second would be if you were sick yourself for a long time period like if you had cancer,
and a third would be if you had a family member who needed your care.
And it's gonna be a lot cheaper in the long run if we are able to take care of our own
family members instead of putting them, let's say, in a nursing home that's gonna cost a
lot of money through Medicaid that's gonna be covered from taxpayer funds.
Aparna: That's exactly right.
So having sort of, you know, spoken about the need for different types of leave, I think
it's also important to highlight where the U.S. is on this policy today, you know, in
terms of the federal policy.
As we said, there is no federal policy today what we have is the Family and Medical Leave
Act that was passed in 1993 that allows people 12 weeks of job protected, but unpaid leave
for the reasons that you just mentioned.
But we don't have a federal paid leave policy, and what we're seeing is really a lot of state
experimentation.
So California was the state that had a leave policy passed in 2004 that offered some types
of paid leave.
But even in those states, we're not seeing sort of really high take-up rates, and we're
seeing issues with people accessing that leave.
And, you know, I think that's worth mentioning.
Isabel: So there are five states now, right?
Aparna: That's right.
Isabel: There's California, and New Jersey, and Rhode Island and then two new ones very
recent, the District of Columbia and New York, who have all past paid leave policies at the
state level.
And two of the most generous, I guess, have not gone into effect yet.
This is gonna give us an opportunity to see how well all of that works.
Aparna: Right.
And, you know, when you look at California, I think...so we'll get into our plan later.
But I think the reason why, you know, people are not that comfortable taking the six weeks
of leave that comes with the California paid leave program is that they say that it doesn't
come with job protection.
Or, you know, the wage replacement rates are really low.
So California offers a 55% wage replacement and people are, you know, especially low wage
workers, are just not comfortable saying, "Oh, I'm gonna go on for six weeks and accept
a 50%, you know, or so wage replacement.
So I think we're seeing a lot of issues in the state programs.
And you're right, you know, New York is going to be fairly generous.
And we have some worries about the cost estimates, right?
Like we are a little bit unclear on what that means for the funding.
Isabel: Yeah, let me say a word more about cause.
We did worry a lot about whether employers are gonna be able to handle this.
And we wanted to make sure that the costs were not imposed directly on businesses.
So this is not an employer mandate, and we're not expecting businesses to pay the cost.
Instead, we're talking about trying to have a new payroll tax or a slight increase in
existing payroll taxes to help families have this leave when a baby comes.
But there was a lot of concern in our group about not burdening businesses with new costs
and possibly reducing hiring.
And you should say something about the gender equality issue.
Aparna: Oh, that's a great thing.
That's right.
I mean, so what we were absolutely emphatic on in the working group, there were absolutely
no disagreements on the issue that we need to make this policy available to both mothers
and fathers.
I think, you know, we sometimes see even in the way the private sector is doing it that,
you know, the policies that are offered for parental leave are longer weeks for mothers
and, you know, slightly shorter weeks for dads.
And I think it's about time we recognized that dads play an extremely important role
in the household in those initial weeks of bonding with the child of being there to provide
childcare.
So I think it's important to make the policy gender-neutral, and it's also important for
economic reasons which is we don't want businesses to discriminate against women.
We don't want businesses to say, "Oh, we know this woman is going to be taking, you know,
the six or eight weeks that's coming through the parental paid leave policy so, you know,
why should we hire her?"
And I think that's worth pointing out.
You know, those are all the discussions we had about why we don't want an employer mandate
and why we want the policy to be gender-neutral.
So let's talk a little bit about our compromise plan that we offer.
Isabel: Right.
Again, we were both really excited, I think, that we were able to get to a final compromised
plan.
Now, I should say, as you know, that not everybody loves this plan.
Aparna: Absolutely.
Isabel: People from both the right and the left were a little unhappy about some aspects
of it.
But they all signed on and they all were reasonably enthusiastic in the end.
Aparna: That's right.
Isabel: And what the plan said was that we should provide eight weeks of paid leave to
new parents either moms or dads.
That secondly, we should replace the wage, the normal wage that you would earn at a rate
of 70%, that we should cap it at $600 a week.
That means that if you are a much higher income worker, the proportion of your earnings is
gonna be replaced, is gonna be much smaller because of the gap.
Aparna: That's right.
Isabel: So it's progressive, but that reflected the fact that we wanted to make it somewhat
progressive, somewhat targeted to lower-income workers.
Interestingly enough, the conservatives in our group they wanted a new means-tested program
for this purpose.
And the more liberal colleagues that we had, they were in favor of a longer leave and funded
in a little different way.
But in the end, we said it should be financed by some combination of a payroll tax on employees,
on workers, not employers.
And also, some reduction in current programs in the federal budget.
Aparna: That's right.
Isabel: As long as those programs weren't already helping low-income families, we didn't
see any point in reducing some programs for low-income families in order to create this
new paid leave policy.
Aparna: That's great, yeah.
I mean, it was a really fun discussion, you know, a lot of disagreements on how we designed
this.
And I think that speaks to sort of the political climate we're seeing in the U.S. today on
these and the diversity of opinions on this issue.
You know, you have Republicans who are in favor of a much, you know, much more targeted
relatively inexpensive plan.
And then we have, you know, the Family Act and other sort of more Democratic ideas, which
offer much more generous weeks of leave.
And I think, you know, one of the reasons why this compromise sort of made sense, I
think to both sides, was, as you said, on the funding.
Yes, we need a payroll tax hike because we're talking about a new program.
But at the same time, we don't want to increase debts and deficits.
We recognize that, you know, the U.S. faces a fiscal imbalance, and we need to be conscientious,
and we need to be careful about any new spending program.
So we do talk about, you know, cutting spending and making the entire plan budget mutual.
Isabel: Right.
Aparna: So I think that's what [crosstalk 00:12:57]
Isabel: If I were a Conservative, what I would be arguing right now, is this makes a lot
of sense.
But if we're gonna add a new, it might be viewed as a new entitlement program for parents,
we need to cut back on entitlement somewhere else in the system.
Now, it's interesting when President Trump was campaigning, he was in favor of doing
this through the unemployment insurance system.
And the proposal that he put forward would require either raising unemployment insurance
taxes or reducing benefits.
Interestingly enough, and you may wanna say more about this, we went over, and we were
invited over to the west wing of the White House to brief Ivanka Trump who, of course,
is the big champion of paid leave.
And she looked at our report, and she seemed to really like it.
She also said that they were open to other ways of doing this.
Aparna: Yeah, I think that was a really exciting development for us because I think, you know,
there's been so much discussion about the Trump campaign idea about how to fund paid
leave through state unemployment insurance.
I know we had a big discussion about it in our working group.
There are lots of concerns about trying to do it at the state level, you know, does that
mean higher payroll taxes on employers?
You know, what about eligibility?
What about benefits?
And so there's a big concern about trying to shift the burden onto the states.
And so it was really nice to have that meeting at the White House to have them read our report
carefully and say, "Yeah, you know, this is fantastic."
And in so many ways, it's sort of trying to get that common ground from the Republican
or the Democratic side of the conservative and the liberal side.
And yes, this is, you know, a policy that probably will help to get that conversation
started.
So that was really exciting for our group, and I think it speaks well about the report
that we managed to, as you said, despite all the disagreements, get people to come together
on this platform.
So where do we think this is heading, you know?
Isabel: Yeah, that's the big question.
And everybody asked us this question, you know, where is it heading, and are we gonna
have legislation this year?
And as much as I would like us to make progress on this, I can't say I'm terribly optimistic
right now about legislation this year given everything else that's on the agenda and all
the difficulties the Congress is having with their priorities on tax cuts and health care
and so forth.
But I think the good news here is the issue is very much in the public domain now.
It's on the radar.
The public opinion polling in favor of it suggests the public whether they're Democrats
or Republicans are all in favor by large majorities, of having a paid leave policy.
So that's the good news here, and we can find the right window, I hope, to get this actually
enacted.
Aparna: That's exactly right.
And I think that also gives us time to sort of get into the details as we said, of other
types of leave.
Because, you know, you probably would have more people sign on to such a policy if you
said, you know, "This is not just about parental leave, this is about the need for leave for
you when you need to take time off for your own illness, for you when you need to take
time off for your parents."
I think, you know, right now, sometimes the pushback that we get is why should I be paying
for someone else to have a child, right?
And I think over the course of the next year, we definitely want to expand this proposal
to include other types of leave at least get on the same page about what that might mean
for a federal policy.
So we're really optimistic we hope to do much more on this over the course of the next year.
And, you know, let's see how this plays out on the political level.
But thank you so much, Bel, for coming here.
We hope to continue this conversation with you, and it's been great having you as a co-director
specially.
Isabel: Aparna, it's been my pleasure, and it's been really great to work with you.
And I think this partnership between Brookings and AEI is a real role model for people going
forward.
Thank you.
Aparna: Hey, everyone.
That's the end of our discussion with Isabel Sawhill.
Thank you so much for watching.
As always, let us know what other topics you would like AEI Scholars to cover on viewpoint.
And to see a full report on paid family leave, check the links in the description below.
Thank you.