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Idea of the Day: California Proves that Paid Family Leave Is Good Policy

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A decade ago, on September 23, 2002, then-California Gov. Gray Davis (D) signed into law Senate Bill 1661, which, with the stroke of a pen, made California the first state in the nation to provide paid family leave insurance to nearly every worker in the state. This remarkable achievement gave an estimated 13 million workers an insurance program that provides income when they need it to care for their family.

In the raucous debates prior to the passage of the law, the business community claimed the sky would fall if paid family leave were made available to all California workers. Opponents claimed the program would be a “job killer,” would encourage too many workers to take leave, and would bankrupt small businesses. Robert Manetta, a spokesman for Intel Corp., summed up the opposition’s position when he claimed, “it will create an extremely expensive and easily abused leave system.”

The last 10 years have proved every one of these arguments wrong.

The sky didn’t fall, and the California Paid Family Leave insurance program’s success validated the program’s worth. The vast majority of employers say the law either had no impact on their business or was good for their companies. In fact, small businesses are less likely to have experienced difficulties with the law compared to large organizations, proving that the worst fears expressed by the chorus of opponents were misguided at best.

California’s program provides up to six weeks of wage replacement to workers who need to take time off in order to provide care for a seriously ill family member, or after the arrival of a new child. An estimated 168,000 workers have taken paid leave annually since the program went into effect, according to the most recent figures. Because of this law, the median duration of breastfeeding by new mothers has doubled. Because the leave is paid, new fathers are increasingly likely to spend time with a new child, filing 26 percent of these paid leave claims in 2011, up from 17 percent in 2004. More workers were also able to take time to care for a sick parent or child. This is good for moms, dads, babies, and families.

Paid leave helps businesses because it lowers the costs of turnover when workers are able to take the time off that they need and then return back to work. And it costs business owners nothing since the leave is funded entirely through payroll taxes on workers.

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This is part of a regular column: Idea of the Day

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