Center for American Progress

RELEASE: CAP Outlines National Solutions to Make Paid Leave a Reality for All Americans
Press Release

RELEASE: CAP Outlines National Solutions to Make Paid Leave a Reality for All Americans

Washington, D.C. — Nearly all workers will experience a caregiving challenge during their working years, whether to welcome a newborn or adopted child, to care for a sick child or aging parent, or to attend to a personal illness or injury. Although communities across the country have implemented successful paid leave programs to help working families, the United States has yet to adopt a national solution that would guarantee workers the right to any amount of paid leave for any reason. The lack of a uniform national policy makes it harder for women, who often take on much of the caregiving responsibilities for their families, to participate in the workforce at a time when women’s incomes are increasingly central to the economic security of working families, reducing economic inequality, and growing the nation’s economy. Indeed, women’s labor force participation has been falling relative to other advanced economies, in part due to the lack of work-family policies, such as paid leave.

Today, a new report by the Center for American Progress details a series of options for how federal policymakers could administer an efficient and affordable national paid leave program using the best-proven elements of existing paid leave programs in the states and abroad as guidance.

“The United States is an extreme outlier among advanced economies in its lack of guaranteed paid leave, and working families and the economy are paying the price,” said Neera Tanden, President of the Center for American Progress. “Families deserve the economic security that comes from knowing you won’t lose your paycheck if you need to care for a loved one or decide to have a baby. It is time to update the nation’s workplace policies to recognize the realities of the modern American family.”

There are a number of options for how a national paid family and medical leave, or PFML, program could be structured and administered in the United States. Specifically, CAP’s report outlines three broad options to ensure workers have access to paid leave based on other countries’ experiences: Individual employer requirements, in which businesses are responsible for providing paid leave; social insurance, in which risk and resources are pooled to provide a fund for wage replacement while on leave; and publicly funded programs, such as business-government partnerships, in which government works with businesses to provide workers with paid leave without expecting employers to finance the leave on their own.

  • Individual employer requirements: Under this model, employers are required to provide paid leave to their workers and must finance the leave themselves. International experience with narrower programs providing maternity leave, however, shows that simply requiring employers to provide paid leave without robust workplace protections can lead to negative outcomes for working women.
  • Social insurance: The most common paid leave program structure, social insurance functions similar to private insurance plans, with individual premiums paid into a fund from which wage replacement can later be drawn. One option for a national PFML social insurance system was originally proposed and developed by the Center for American Progress and has been introduced in Congress as the Family and Medical Insurance Leave, or FAMILY, Act. Norway—which has one of the most generous parental leave policies in the world and one of the highest labor force participation rates of any Organisation for Economic Co‑operation and Development country—administers its program as a social insurance program.
  • Publicly funded programs: A handful of countries administer paid leave through the government using alternative revenue sources and administrative mechanisms. One compelling option was implemented in Australia, where benefits are administered through employers rather than through a government agency. This structure also streamlines the process for employees by delivering paid leave benefits through workers’ normal paychecks.

Importantly, in order to meet the needs of the current U.S. workforce, a national PFML program should be developed with the goals of supporting women’s labor force attachment, promoting gender equity, and reducing inequality. Therefore, in order to be truly effective, a national paid family and medical leave program must be universal, accessible, comprehensive, affordable, and inclusive.

A recent analysis by the Center for American Progress found that, between 1963 and 2013, the rise in women’s labor force participation and earnings slowed the growth of income inequality in America. CAP’s findings suggest that work-family policies—such as a national paid leave program—would not only support working families, but would also be a critical tool in fighting the nation’s staggering levels of inequality.

Read the report: Administering Paid Family and Medical Leave by Sarah Jane Glynn

Related resources:

For more information or to speak to an expert, contact Chelsea Kiene at ckiene@americanprogress.org or 202.478.5328.

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