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2 Opposing Groups Wrote the Ultimate Compromise For Paid Family Leave

Ideas
Mathur is a Resident Scholar in Economic Policy Studies at the American Enterprise Institute. Sawhill is a Senior Fellow in Economic Studies at the Brookings Institution.

Republicans and Democrats are finally on the same page about something. Almost.

While Democrats have long called for a paid leave policy, Republicans have been reluctant until recently. The Trump Administration became the first Republican administration to include paid parental leave in their budget, thus indicating a bipartisan desire for change. At a cost of $20 billion over ten years, the plan provides six weeks of paid leave after the birth or adoption of a child. It also makes good on a promise the President made during his campaign. While it seems unlikely that the proposal would be adopted in its current form, it is nevertheless a useful first step for the only advanced country without a paid family and medical leave policy.

The sticking point about a paid leave policy is how best to design it so that it benefits working families without being overly costly. Earlier last year, a group of bipartisan nationwide experts joined forces to explore the issue. Under the umbrella of the American Enterprise Institute–Brookings Paid Family Leave Working Group, comprised of many people with government experience in both Democratic and Republican administrations, put forth a different approach to designing a federal paid leave policy. Not everyone agreed on such questions as how generous the benefits should be, how they should be paid for, whether they should be targeted to low-income families or made available to the middle-class, how strict the eligibility rules should be and how much job protection should be provided. But it is worth noting: We all agreed that a paid family leave policy is needed in the U.S.

Today, there are a multitude of reasons for paid family leave. It enables workers to take time off to address certain life events and medical emergencies — the birth or adoption of a child (paid parental leave), one’s own illness (personal medical leave) or the illness of a family member (family care leave) — without sacrificing an entire paycheck. The participation of women in the labor force, the growing number of single parents and fathers wanting to be more involved with their children are also fueling interest in this issue. The increase in working women has contributed to economic growth and has been the primary reason for improvement in standards of living for the middle class. But that increase has now stalled. One reason why is the difficulty women have in balancing work and family responsibilities.

It is no wonder then that polls show overwhelming public support for paid family and medical leave, with almost 71% of Republicans and 83% of Democrats in favor of a paid parental leave policy. The federal Family and Medical Leave Act, passed in 1993, offers 12 weeks of job-protected, unpaid leave, but only about 60% of the workforce is eligible for its protections.

While the federal government has been slow to act on this issue, some private employers and states have adopted their own benefit policies. Paid family leave is currently provided in California, New Jersey and Rhode Island, and policies will soon be implemented in the state of New York and the District of Columbia. Tech companies such as Apple, Google and Netflix offer many months of paid leave to accommodate the needs of working parents in their organizations. However, employer-provided paid leave is concentrated among high-income workers; a majority of lower-income workers receive no pay while on leave.

To answer this growing need, the AEI-Brookings working group put forth the following compromise proposal: Federally paid parental leave would be available to both working mothers and fathers (with strict eligibility requirements) to prevent new parents from having to return to work within days of a child’s birth or adoption. The plan would be budget-neutral by splitting the costs of financing it between a payroll tax, pruning government spending or cutting tax expenditures elsewhere in a way that does not adversely affect low-income families. It would offer a 70% wage-replacement rate up to a cap of $600 per week, for eight weeks. States and private employers would be free to supplement this leave if they choose to do so. Job protection would be included, and it would require an independent study of the policy’s effects to assess the impact on workers and businesses over time.

This is a compromise plan — none of the group members found this design entirely to their liking. But this also reflects the political debate, where Republicans seem to want a minimalist policy that is more targeted towards low-income workers, and Democrats would like relatively more generous benefits for all working Americans. It was important in these partisan times to work toward a compromise that all of us could support to some extent. We hope our efforts will help educate and encourage others with divergent views to come together to expand the access of American workers to paid family leave in a way that balances the needs of families with those of employers.


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