Paid Sick Leave Is a Failed Cure

Washington state already has a mandate. Contrary to Sen. Murray, it hasn’t helped arrest coronavirus

By Aaron Yelowitz and Michael Saltsman. Mr. Yelowitz is an economics professor at the University of Kentucky and a senior fellow at the Cato Institute. Mr. Saltsman is managing director of the Employment Policies Institute.

"Democrats in Congress have a cure for the coronavirus crisis: a nationwide paid sick-leave mandate. Sen. Patty Murray of Washington says this new benefit would allow people to “focus on staying healthy and preventing the spread of this disease.” Her House sponsor, Rep. Rosa DeLauro of Connecticut, said the lack of such a mandate could “make coronavirus harder to contain.”

Ms. Murray and Ms. DeLauro began advocating such a policy in 2004 and have clearly internalized Rahm Emanuel’s immortal political advice that “you never want a serious crisis to go to waste.” But the policy is poorly suited to the current crisis.

San Francisco was the first locality to require paid sick leave, starting in 2007. The law brought modest benefits and significant costs. A 2011 study by the Institute for Women’s Policy Research found nearly 30% of the lowest-wage earners reported layoffs or reduced hours, with employers unable to offset the cost through price hikes alone. Connecticut’s sick-leave policy was the focus of a 2016 study (of which Mr. Yelowitz was a co-author), which found a “sizeable decrease in labor demand” as a consequence of the mandate.

Today 12 states, the District of Columbia and several dozen other localities require some form of paid sick leave. In Washington state, employees earn one hour of leave for every 40 worked. In California, they earn one hour for every 30, or employers can provide 24 hours up front. Both states also have localities that require more-generous benefits.

The coronavirus’s domestic arrival in these two states complicates Ms. Murray’s promise that a paid-leave mandate could “prevent” its spread. A nursing home in Kirkland, Wash., northeast of Seattle, is described as the “epicenter” of the U.S. coronavirus outbreak. Employees, residents and relatives have all tested positive for the disease. California has the third-highest concentration of cases.

Why didn’t paid-leave regimes in California and Washington prevent the spread of the disease, as Ms. Murray imagines? According to Johns Hopkins researchers, it takes five days on average for coronavirus symptoms to present. That means paid sick leave is of limited use. No employee would come to work or a public gathering knowing he had the coronavirus, and no employer would want him to. But he might show up contagious before he has ever showed symptoms.

Ms. Murray’s plan is also uniquely ill-suited to the tenuous economic environment. Her proposal immediately grants 14 days of sick leave in the event of a “public health emergency,” including the current one. But employers are already cutting back in response to declining revenue. Local 360, a Seattle restaurant, announced this week it would close immediately “due to the impacts of the Covid-19 situation.” Others have done the same. Requiring struggling businesses to pay for two weeks leave for every staff member would only compound the damage.

This is where the government has a role to play. Rather than creating a new mandate on employers, Congress and the states should address the present crisis through enhancements to existing social-insurance programs. Boston University’s Jay Zagorsky proposes broadening workers’ ability to tap unemployment insurance, such as by dropping any waiting period to apply and eliminating any requirement to look actively for work. Others have proposed using the unemployment insurance system to reimburse employers for the wages of laid-off employees.

The relative benefits and consequences of paid sick leave must be considered carefully. Using a pandemic to justify its swift enactment would result in ineffective policy that may hurt the workers it’s meant to help."