Prepared by Jodie Levin-Epstein, June 2004
with funding from the sponsors of the Ian Axford (New Zealand) Fellowships in Public Policy
Jodie Levin-Epstein is Deputy Director of the Center for Law and Social Policy (CLASP) in Washington, DC. At CLASP, Jodie’s advocacy contributes to the political re-emergence of poverty. She also focuses on paid leave and workplace flexibility. She has previously been the deputy director of Advocates for Youth, an aide to Sen. Dick Clark, an appointee at Agriculture in the Carter Administration, and served on the White House and National Academy of Sciences’ hunger task forces. She sits on the National Advisory Council of the Women’s Economic Security Campaign. A graduate of Grinnell College, she received it’s honorary Doctorate of Laws.
During Jodies Ian Axford Fellowship exchange to New Zealand she was based at the Ministry of Social Policy in Wellington, where she researched how New Zealand and US social policies promote a balance between work and family, particularly for sole parents including those receiving welfare.
High Wire Act: Balancing Families and Jobs at Precarious Points examines two work-leave policies: parental leave and sick days’ leave. It considers the implications of these policies, both for families and for businesses, in New Zealand and the United States.
In New Zealand, national laws establish a minimum for Paid Parental Leave (around the birth or adoption of a child) and for paid sick leave (for those days when a worker or worker’s family member is sick). The United States has no such federal laws. In the United States, the Family Medical Leave Act (FMLA) provides for 12 weeks of unpaid leave for some employees to take time at the birth or adoption of a child and to address their own or family members’ serious health conditions. The FMLA addresses serious illness and it is not intended to be used for sick days now and then; this paper is particularly focused on New Zealand’s paid-leave law that covers sick days.
Government policy can influence the relationship between families and employers and provide a net beneath the high wire on which some families and some businesses balance when employees take leave.
Work-leave can be precarious for both families and businesses. The time around the birth of a child and days of sickness is stressful for all working parents; however, if the time off from work is unpaid, the challenge of such moments is even greater for families with lower incomes. Time taken out of the workforce can sometimes trigger poverty and more generally will influence future earnings capacity. Businesses have an economic stake in the absences of workers. Companies must make adjustments to accommodate worker absences. This can be stressful for any company but, for some businesses, particularly those that are smaller, it may be more difficult than others.
High Wire Act identifies key research that addresses four fundamental questions:
The four questions raise considerations with almost Talmudic depth. For example, while research demonstrates that parental leave can be valuable to the well-being of families, the business bottom line, and an ageing society’s need for workers, it fails to inform us about the ideal length of parental leave when all of these elements are considered together. How long can a job stay protected without hurting business operations? How long can a parent be absent from the workforce without harming long-term earnings, and is shared caring between parents the best way to address earnings capacity? What length of leave is best for a child’s development? How do different ‘family friendly’ policies impact on these three considerations? What is the right cost-benefit calculus for different kinds of businesses? How can businesses weigh immediate returns against those that are longer term?
While many questions remain unanswered or insufficiently nuanced, the data make clear that, without statutory policy, some workers would not receive adequate, or any, access to work-leave. This happens when the businesses that employ these workers do not voluntarily provide these benefits. The workers in these firms tend to be, but are not necessarily limited to, those who earn lower wages.
High-Wire Act follows the four questions with:
To gain a better understanding of how New Zealand’s statutory parental and sick days’ leave provisions are perceived and experienced at the ground level, interviews were conducted with New Zealand solo mothers, lower-wage workers, and employers with fewer than 50 employees. Virtually all of the interviewed businesses support government’s role in establishing Paid Parental Leave and, most particularly, in funding it through general tax revenues. Both because the law is new and because parental leave is relatively infrequent, few of the interviewed businesses had yet implemented it; and some were misinformed about certain provisions. There is also worry about a pending government proposal to expand eligibility to more workers. Yet, while not without concern about how to manage a worker’s absence, a number of the employers believed the paid leave would help retain workers. Solo mothers, many of whom planned to return to their employers, valued the parental leave income. Nevertheless, most found that the drop in income translated into housing dislocation. Information about the interaction of certain benefit programmes was not readily available; in contrast, the application process and payment procedures were fairly seamless for these mothers. The interviewed businesses also supported government’s role in defining a minimum standard for sick days’ leave. Interviewed employers and employees alike felt paid sick days were necessary to address the need for wages when someone is sick; they also felt that sometimes an employee or employees would abuse the sick days’ leave. Interviewed employers are generally worried about new restrictions on their ability to require certification of sickness. The businesses which provide higher wages tend to provide more sick days’ leave.
The stakeholder interviews, along with the research related to the four questions, suggest that New Zealand has established important work-leave schemes. The Government has made significant strides in its work-leave policy. The analysis and the interviews also indicate that New Zealand’s policies, to be on the cutting edge, should be subject to on-going review.
Consideration should be given in New Zealand to policies in which the Government would:
Consideration should be given in the United States to lessons from New Zealand’s experience, including:
New Zealand and the United States are different in many respects but they share a fundamental economic truth: they both must operate in a manner in which every worker counts. Policies that enable working parents to work-and to parent-are a vital part of that framework.
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