Veronique de Rugy on how mandatory paid family leave backfires

Do We Treat Children Worse than Dogs?

"At a recent hearing on Paid Family Leave before the House Oversight and Reform Committee, Rep. Alexandria Ocasio-Cortez, D-N.Y., thought herself brave and appropriate to harangue the only free-market witness – one out of seven – there. 

In a typical AOC fashion, she went on a rant about how the free market treated “women and people who give birth” (whomever those non-women giving birth are) worse than we treat puppies. Why? Well because at least puppies get to stay with their moms for eight weeks, and apparently, the ‘free-market’ deprives women from eight weeks of paid leave after giving birth (seriously watch the whole thing here).

I can only imagine what was going on in the mind of the Heritage Foundation’s Rachel Greszler, the conservative witness at which this idiocy was directed. Had I been in Greszler’s shoes, I would have been tempted to burst out laughing and say, “Behold, ladies and gentlemen, this is who is responsible for making policy for this country!”

Greszler was wiser and she just stood there in silence—not that she was even given the courtesy of being allowed to reply. Always the thoughtful one, she waited to be back in her office before drafting a response to the representative that included this gem:

“It’s also a terrible comparison, considering that puppies are taken from their mothers and sold after eight weeks (most states require an eight-week period for vaccination purposes). These puppies also never get to meet their fathers.”

By now we are used to ignorant statements and bad analogies from this particular representative. But what made this episode a little different is that AOC, who has never had kids, was lecturing Greszler, a working mom of six (all under the age of 11), who had just been the only witness of the bunch to present actual data about the impact of the federal government mandating a paid leave – data based on her study of the impact of such programs at the state level.

This fact-freeness is what is infuriating about this debate—and it was on display at this hearing. What you get is a lot of emotions and opinions. You also get stories about how paid leave is great and useful to mothers and families, which no one denies. But these stories about the benefits of paid leave are meant as evidence that the government should provide it, which of course they aren’t.

There were many other fact-free arguments presented that day. Many of them aren’t unique to Democrats. Indeed, it is common these days to hear Republicans/conservatives who support this program echo claims usually made by Democrats, such as the fact that not all women have access to paid leave is a market failure. Never mind that they never really try to show that there is indeed such a market failure at play here (Don Boudreaux makes that point again here).

And on the rare occasions when they do, they casually toss out claims such as “the United States is the only country that doesn’t have a national paid leave program” – as if this is a meaningful argument. Such “arguments” are even more amusing coming from conservatives who are always so insistent on “America’s exceptionalism.”

Advocates of paid leave also repeatedly claim that the lack of a federal mandate means that American women don’t have access to paid leave. I assume the almost complete absence of paid leave is what AOC was implying. They love to quote the number provided by the Bureau of Labor Statistics, that reports only 19 percent of women have access to paid leave in the U.S., in spite of many scholars having commented on the fact that this number leaves out multiple options enjoyed by mothers.

In fact, when including all the ways that employers provide paid leave to their employees, the number is not 19 percent but, instead, close to 65 percent. These eager advocates also fail to look at who are the women who indeed do not now have paid leave as part of their employment contracts.

Scholars who have undertaken the effort to look for this information find that the women who don’t receive paid leave are lower wage and low skilled, and typically hold part-time jobs. These findings do not reflect any widespread abhorrent treatment of employees by employers. Instead, these findings reflect the understandable wish of most of these low-wage workers to receive as much as possible of their compensation in the form of take-home pay.

The most frustrating aspect of the current debate, however, is the fact that paid-leave advocates ignore (or refuse to acknowledge) the ample literature that shows what happened in countries and states that have adopted the kind of paid-leave policies they would like to see implemented in the U.S.. Greszler devoted an entire section of her testimony to showing that the number one lesson learned from these examples is the U.S. government shouldn’t emulate them.

As she writes, these programs are regressive (especially when financed through a payroll tax), and they redistribute money from low- income earners to middle- and upper- income earners. They also exacerbate gender inequities by leading to fewer women being promoted and landing managerial positions. These programs are costly and a prime target for expansion, which is no laughing matter considering that Uncle Sam is $22 trillion in debt as it is.

It is worth noting the most recent study about the California paid-leave program. The authors find that it didn’t boost women’s work (as Democrats had predicted), nor did it boost fertility (as conservatives had predicted), but it did reduce women’s earnings in the long-run (as free-market scholars had predicted). Here is an excerpt from the executive summary:

“For new mothers, taking up PFLA reduced employment by 7 percent and lowered annual wages by 8 percent six to ten years after giving birth. Overall, PFLA tended to reduce the number of children born and, by decreasing mothers’ time at work, increase time spent with children.”

This, of course, was not a new result, and it is consistent with the large literature that studies government provisions in Europe in particular. (I have written about Denmark’s experience with paid leave here). Why anyone would want to implement such a program with its inevitable outcome is inconceivable to me.

And yet here we are today. In Washington DC, this week, at a congressional hearing on the issue, the one witness presenting data and warning Representatives about these negative consequences was ridiculed."