Despite all President Donald Trump’s talk of fighting for working families and investing in working women, his presidential budget tells a different story.1 The proposed budget contains draconian cuts to crucial programs for women and families, and it doubles down on an unfunded, unworkable, under-inclusive proposal for paid parental leave.2 It requires states to provide six weeks of paid parental leave to new birth and adoptive parents through the unemployment insurance (UI) system. But this amounts to little more than a false promise.
Despite claiming that the cost of the parental leave proposal is “fully offset,” the Trump administration pushes the program’s cost onto states while failing to specify how states are expected to finance it.3 This new pressure will further strain state resources, and risks reducing the benefits available under the Trump paid leave proposal or states’ UI programs—or both. The proposal also does not cover the majority of circumstances that cause families to need paid family and medical leave. Thus, most families needing paid leave will continue to struggle with caregiving challenges even if the Trump plan takes effect. The end result is a proposal that would exclude millions of working families—those with caregiving needs not covered by the plan, those who would not be able to afford to take leave given the program’s meager expected benefits, and potentially those who are not eligible for UI. These flaws reflect the plan’s fundamental failure to adhere to the core principles essential to an effective, comprehensive paid family and medical leave program,4 and are exacerbated by its use of the UI system to provide the program’s infrastructure. This issue brief looks at how Trump’s proposal would fall far short for families and workers, and threatens to undermine states’ already-underfunded UI programs.
A UI-based parental leave program would exclude too many workers
Trump’s plan would deliver paid parental leave benefits through the existing UI system. UI is designed to temporarily replace a share of involuntarily unemployed workers’ wages while they search for their next job. Similar to paid leave, UI is intended to help families make ends meet during times when a worker is not working for an extended period and prevent workers from dropping out of the labor force. But there is tremendous variation across states in UI eligibility and benefits—and the UI system disproportionately excludes groups such as women, people of color, and low-wage workers. A comprehensive paid family and medical leave plan must be available to all workers—but Trump’s proposed new benefit may not be available to many of the women and low-wage workers who most need leave.
Women are disproportionately excluded from UI
According to Trump’s budget, his proposal apparently would rely on states to establish eligibility standards to determine who could access the proposed new parental leave benefit through their existing UI programs. But states’ UI programs fail to cover a huge swath of today’s workers, in large part because many states tightened eligibility criteria and restricted access in response to the financial challenges of the Great Recession. As a result, in recent years, a historically low one in four unemployed workers received UI benefits nationwide—and in 13 states, this number was less than one in five.5 Therefore, if Trump’s plan requires workers to qualify for UI, many of the workers and families who need paid leave the most may not be eligible for it. This includes women, who are already disproportionately excluded from UI protections because of how much they work and how much they earn.
Women are more likely to earn low wages and work part time
Although women make up less than half of the workforce, they are more than twice as likely as men to work for low wages, and they account for more than two-thirds of workers in low-wage jobs—defined as jobs that pay $10.50 or less per hour.6 Eligibility for UI benefits is largely based on total wages earned during the preceding four or five quarters of employment. Low wages make it hard for workers to meet some states’ stringent eligibility thresholds, especially since low-wage workers are more likely to experience unpredictable schedules and fluctuating incomes. In nearly half of states, for example, a worker who earned the minimum wage for 15 hours per week over a period of 20 weeks would not qualify for UI, even though a higher-wage worker would. These challenges are magnified for black women and Latinas, who face steep disparities in pay.7 Even though these women experience unemployment at more than 1.5 times the rate of white women, they are less likely than white women to receive UI when they lose a job.8
The challenges associated with low wages and UI eligibility are particularly acute among part-time workers.9 Overall, women work part-time at nearly double the rate of men, and make up 71 percent of prime-age workers—who are between age 25 and 54—in part-time jobs.10 Part-time workers are more likely to have jobs that pay low wages—$10.50 or less per hour—and three-quarters of workers in these part-time low-wage jobs are women.11 For many families, part-time work is critical to making ends meet. Far from freely choosing to work part-time, however, many women feel that part-time work is their only option due to family responsibilities or the difficulty of securing affordable childcare. Women are seven times more likely than men to cite “childcare problems” as the primary reason they work part time, and four times more likely than men to cite “other family/personal obligations” as the primary reason.12 One-third of states currently deny UI access to laid-off part-time workers if they wish to look for comparable part-time work, even if they are otherwise eligible.13 But even when part-time workers who would otherwise qualify for UI lose a job—or must leave a job for compelling reasons—they are less likely to meet states’ earnings and employment requirements. President Trump has not said whether his paid parental leave plan would be available to the one in five American workers in part-time jobs.14
Many women would be left out of a paid parental leave program run through the UI system
In March 2017, unemployed workers were only slightly more likely to be men than women nationwide, yet UI recipients were about 1.7 times more likely to be men than women.15
As seen in the table below, UI recipients are more likely to be men than women in 42 of 50 states and the District of Columbia, even after accounting for the facts that men are both more likely to be in the labor force and to be unemployed.16 The data make clear that, absent specific interventions, most states’ UI rules depress women’s participation. Yet, the Trump proposal includes no detail on whether or how he would ensure that the women who need leave the most have equitable access to the benefit.
Trump’s proposal would threaten states and leave families behind
Because the Trump budget proposal stresses that states will be allowed maximum discretion to design a program, and states control and administer their own UI programs, it is not clear to what extent Trump’s plan actually would compel states to provide a specific paid parental leave benefits to a specific group of parents—especially without any substantial offer of funding assistance to states.17 Even if or when states adopt Trump’s proposal, the significant state-by-state variation in UI eligibility and benefits could lead to huge disparities in access to and adequacy of paid parental leave. In many states, benefits would likely be too meager to ensure economic security.18 At the same time, the Trump proposal robs Peter to pay Paul, forcing a competition between the needs of unemployed jobseekers and working families.
An effective paid family and medical leave plan must apply to all families, instead of depending on where they live or what kind of job they have. It must cover the reasons for which workers need to take leave, including to deal with their own medical condition or to care for a new child, a seriously ill family member, or a family member who is an injured veteran. A comprehensive plan must offer a benefit substantial enough that low- and middle-wage workers can actually afford to take leave when they need it; it should also be sustainably and responsibly funded. A comprehensive plan must be inclusive of all types of families and ensure that working families do not face adverse consequences for using the paid time off to which they are entitled.19 Trump’s proposal fails by every measure.
The proposal threatens to undermine economic stability for state UI programs and families
Trump’s proposal pushes the bulk of the cost for the parental leave benefit onto states, largely leaving states to identify funding sources on their own. To make matters worse, Trump seeks to implement his program through the UI system but does not address the significant challenges that system currently faces. These include the fact that many states’ programs are already deeply underfunded and unprepared to fulfill a primary goal of UI—helping stabilize the economy in the event of a recession.20 Indeed, only 20 states and the District of Columbia are equipped to provide unemployment protections during even a mild recession.21 Trump’s plan also does not come with any added funding for states to bolster their UI programs or make the paid parental leave proposal sustainable or feasible. And it provides no funds to update critical technological infrastructure or expand staff to administer the new benefit.
The proposal pushes costs onto already-struggling states
Trump’s proposal would offset more than two-thirds of its cost by saddling states with a new requirement to maintain a minimum level of reserves in their trust funds—demanding that states hike taxes or slash programs for working families.22 This puts additional strain on cash-strapped states.
An additional funding mechanism Trump puts forward—reducing fraud in the UI system—runs afoul of reality. In his original campaign plan, Trump suggested that all of the plan’s cost could be offset by reducing fraud—a claim that the administration has now evidently walked back.23 In general, workers are more likely to be underpaid benefits that they are owed than to be overpaid due to fraud.24 Even so, two-thirds of overpayments occur because of errors made by employers or UI-administering agencies. This means that reducing overpayments would require investing more resources in overworked, underfunded agencies.25 Moreover, overpayments vary by state, and some states, such as Connecticut, have already taken significant steps to address UI overpayment issues in their programs.26 These states would expect little or no further savings from increasing program integrity. And even if some states were able to save money by addressing UI overpayments, these savings would not constitute an ongoing funding stream that could support continuing benefits such as paid parental leave.
Finally, Trump projects that one-fifth of proposal’s cost will be offset by savings from moving unemployed UI recipients into jobs more quickly by providing more reemployment services.27
The proposal leaves out caregiving and medical leave
Even if all workers were eligible for UI, at most, Trump’s plan would cover just one in five of the 20 million workers who annually take family and medical leave for reasons covered by the Family and Medical Leave Act, or FMLA.28 Instead of building off the FMLA standard—which offers 12 weeks of unpaid job-protected leave to workers who need to take time off to recover from a health crisis or to care for a child, a seriously ill family member, or an injured military service member—Trump’s proposal only provides six weeks for new adoptive and birth parents. By restricting the program to parental leave for a new child, Trump leaves out families who are taking care of seniors, people with disabilities, sick children, and veterans.29
The proposal’s wage replacement is unlikely to be enough to enable families to take leave
Low-wage workers are more likely than higher-wage workers to need UI to make ends meet during unemployment—and to need paid family and medical leave to make ends meet during caregiving. But as discussed above, they are less likely than high-wage workers to qualify for UI benefits or have access to paid family and medical leave through their employer.30 Even for low- and middle-wage workers who are eligible for UI benefits, it is unclear whether Trump’s plan would replace enough of their wages to help families stay afloat. Furthermore, the wage replacement rates are unlikely to be sufficient in many states, since UI programs vary significantly and many are underfunded. An average full-time worker in Massachusetts or New Jersey could expect to receive more than $500 per week, but an average worker in Arizona or Mississippi could expect $240 per week at most.31 The average UI benefit is less than one-third of the average wage in 22 states.32 This is far too little to provide economic security, especially for workers facing the financial strain of caregiving.
Trump’s budget does not disclose what wage replacement rates workers should expect under his proposal, but the cost estimate—$18.5 billion over 10 years—may give some indication of the average weekly benefit. Even if six weeks of leave were taken for only 1.3 million of the 4 million births in the United States each year—as the campaign initially predicted33—the average weekly benefit would be less than $240. This is less than a minimum-wage salary, and just 28 percent of the median usual weekly earnings.34
Furthermore, Trump’s cost estimate for his revised plan is $6.5 billion less than his campaign’s cost estimate for its initial proposal, which only covered maternity leave.35 Yet by extending the program to fathers and adoptive parents, Trump has more than doubled the number of potential leave takers. If the cost estimate has shrunk while the potential beneficiaries have more than doubled, it follows that the wage replacement rate is even lower than in the initial plan.36 Replacement rates would likely be far too low for many low- and middle-income families to afford to take leave, because few would be able to make ends meet on such a small share of their accustomed income.
The proposal does not appear to ensure that all families can take parental leave without facing repercussions
In addition to falling short for families who need paid family and medical leave for reasons other than the arrival of a new child, it’s not clear how the policy will apply to blended or foster families. The proposal does not specify whether parents must be married or have full custody of their child to receive the benefit. It also makes no mention of anti-discrimination protections to ensure that all families, including lesbian, gay, bisexual, and transgender (LGBT) families, can access the proposed leave.
Finally, Trump’s plan does not mention any protections for workers to ensure they do not face retaliation for taking leave. On top of the questions about eligibility and wage replacement rates, the lack of serious provisions to protect workers who take leave is deeply concerning. Trump’s plan could leave even eligible workers who can afford to use the benefit vulnerable to negative repercussions when they return to work. This issue is especially troubling since Trump’s paid parental leave plan comes alongside other budget proposals that would undermine the government’s ability to enforce existing protections for workers.37
The UI system needs reform, not new requirements, and workers deserve real paid family leave
In 2015, two-thirds of mothers were primary, sole, or co-breadwinners in their families, and 65 percent of American children younger than age 6 had both parents in the workforce.38 Women are central to economic growth and prosperity, but without modern workplace supports—including a robust UI system and comprehensive paid family and medical leave—many women face barriers to staying in the labor force.39 Both UI and paid family and medical leave are intended support families as they undergo transitions, but the UI system has not been adapted to the challenges working women face, and it often fails to provide adequate protections to workers who lose a job. Furthermore, the unemployment system faces severe financing challenges and is unprepared to take on the additional strain of a paid parental leave program.
Trump’s plan fails to address the realities that today’s working families face, or the limitations of the already-underfunded UI system. An effective paid family and medical leave program would be widely available, covering all workers; would comprehensively address families’ variety of medical and care needs; and would provide sufficient wage replacement so that families do not sink into financial ruin while caregiving. It would also be inclusive of families of all compositions and strong in combating discrimination and other adverse actions aimed at coercing or discouraging workers from taking leave. One example of a robust family and medical leave program is offered in the Family and Medical Insurance Leave Act (FAMILY) Act, as reintroduced in 2017 by Sen. Kirsten Gillibrand (D-NY) and Rep. Rosa DeLauro (D-CT). For the same qualifying reasons covered under the FMLA, this act would provide up to 12 weeks of paid family and medical leave each year to eligible workers.40
Far from offering the robust solutions families need, however, Trump’s proposal would extend a meager paid parental leave benefit to a narrow swath of working families, all while threatening to erode critical unemployment insurance protections.
Sunny Frothingham is the senior researcher for women’s economic policy at the Center for American Progress. Rachel West is an associate director for the Poverty to Prosperity Program at the Center.