Family leave proposal pays for itself
Monday, February 12, 2018
Proposals to have the federal government help new parents take paid leave from their employment have generally come with serious disadvantages.
If the government makes companies eat the cost, it might also make them less willing to promote or hire women of child-bearing age. If the government instead makes taxpayers as a whole pay for leave, then it penalizes families that have chosen to have one parent stay out of the paid labor force to take care of children. This seems especially unfair since those families have lower average incomes than two-earner families.
A new proposal on paid leave, however, avoids these pitfalls. It would instead let new parents finance time off from their jobs by slightly delaying the time at which they would collect Social Security benefits. Kristin Shapiro, a lawyer in Washington, explained the idea in a recent paper for the Independent Women’s Forum. She estimates that new parents could finance 12 weeks of leave in return for a six-week delay in taking Social Security checks.
While the Trump administration and Republican senators have expressed interest in the idea, it has already drawn some criticism from the left and the right. None of their arguments seem compelling.
On the left, the critique is that the plan “would penalize the elderly for their decision to have raised families,” and penalize them even more if they had large families. It wouldn’t. The plan wouldn’t force anyone to participate; it would just give them the option to collect an existing government benefit now or later. Having more children would not lower (or raise) anyone’s total Social Security benefits.
There’s a case that fiscal policy should treat parents better, and I’ve made it. If we want to go down that route, we should do it by providing additional tax relief for parents, which they could use to finance leave from work, or other things. But wanting additional pro-parent policies is not a good reason to object to the Shapiro proposal.
The criticism of the proposal from the right has been no stronger. The conservative and libertarian critics say that people shouldn’t have to pay for other people’s time off with their infants, and that Social Security is already underfunded without its taking on new burdens.
But this plan wouldn’t add a new burden to the program or raise anyone’s taxes: It would just let parents move some federal spending from the future to the present. It wouldn’t make Social Security’s overall finances any worse.
Nor would it make reform of the program any more difficult. Policymakers in the future could still moderate the growth of Social Security benefits, as they should, while leaving the option for parents to pull a small fraction of their benefits from their retirements to their children’s infancies.
It is probably just a matter of time until someone raises another concern: that employers will be less likely to pay for time off themselves if their employees have access to future Social Security benefits. But this is also a misplaced worry. Employers will offer the compensation packages that bring them the workers they want at a cost they can afford.
If the federal government makes these funds available to parents, employers might offer employees less money in the form of paid leave — although they could always supplement what Social Security pays for — and more in the form of wages. There’s no reason to think employers would offer less compensation overall.
Shapiro’s idea, in short, is a good one. I still haven’t seen a better plan, or a valid criticism of her idea.
Ramesh Ponnuru writes for Bloomberg View, is a senior editor at National Review, visiting fellow at the American Enterprise Institute and contributor to CBS News.