Mandated paid family leave plan is financially unfeasible
Another reason good businesses will NOT establish themselves here
Mandated Paid Leave… So here they go again. Members of the State Rep. Josh Elliott wing claim that when a state forces its employers to pay people who want to take time off from work for family reasons it is appealing to employers.
Errrr. If it were so appealing, we’d see almost every state employer doing it now.
Instead, it’s appealing to a few special groups, groups from whom the Josh Elliott wing expects to win votes. It’s unappealing, indeed repulsive, to those of us who balance work and family life. It’s also another tax, falling most heavily on workers for whom even a 4 percent tax increase means almost zero left-over savings. (The single mom at $50,000 salary rarely saves more than $2,500 of it. Knock out 4 percent – that’s $2,000 – and there’s almost nothing left.)
Now the Josh Elliott wing’s proposal put the tax at only 0.5 percent, not 4 percent. That’s unsustainable for the amount of funding needed. Whether these legislators know this and are mischievous, or whether ignorant and following a trope that “feels good,” is hard to say. Either way, these “leaders” are dangerous. They can’t do basic math; or choose not to.
Let US do some math.
At 0.5 percent, the $52,000 a year salaried worker will see $260 a year extracted, but when used depletes the fund by $12,000 (12 weeks at $1,000 a week). To break even, this worker would use her benefit for 12 weeks every 46 years, aka less than once in a career.
Faced with a FREE benefit to staying home, many workers will indulge this benefit at every possible opportunity: grandma’s illness, an international marriage, a spouse’s therapy treatments. Don’t be surprised if a pet’s surgery gets added to the provisions of family leave.
So what financially can be used for 12 weeks every 46 years is likely to be used once every FOUR years. To make the fund self-sustaining, we’d need a payroll tax of at least 4 percent, and we’d need to make the leave benefit partial, not full.
More math (and logic): a fund needs time to build up. Those 0.5 percent extractions don’t result in even ONE fully-paid week off until at least four years of build-up. But don’t you think people will just wait until they have a deep need? Not when the whole scheme could go kaput quickly. Those who know how to work the state welfare systems will make depletions as soon as the state permits it. No ailment now? They’ll find one — “for long standing ongoing family / pet problems.”
But, the progressives contend, “some people actually need this kind of leave truly that often. Some need it EVERY year.”
Errrr. Those who find extraneous yearly needs are NOT the kind of desired employees those big employers are courting.
Now, we SHOULD want to make employees with truly high family responsibilities more capable of taking time off. Here’s my way:
1) Eliminate the state income tax. Ping. There’s 3 to 7 percent more money for you, tax sheltered if using an HSA.
2) Reduce energy costs. A family that can save $150 a month can fund four weeks of leave paid for after just three years. (Remember, in a 25 percent tax bracket, saving $150 is like earning $200).
3) Reduce property taxes. Whether owner or renter, living with lower property taxes means more money to take care of your family.
4) Allow partial federal income tax opt-outs. This will take negotiation with Washington, D.C., but we have a president who likes making deals. Opting out of the unconstitutional federal services a family chooses not to use (or will pay for as they use them) is a win-win for Donald Trump and for Connecticut families.
5) Reduce regulations on business. They are costly, and they cause higher prices for consumers. Your car would be at least 20 percent cheaper if the regulations on Detroit’s manufacturers were at the level of those in the 1950s. Your hairdresser, lawn care firm, tailor, and restaurateur would be able to charge 5 to 15 percent less if the state did not make it so much harder to do business.
If even two of the above five proposals were enacted, Connecticut would become an appealing place for businesses. That itself raises wages. If all five were enacted, Connecticut would be a business mecca.
That “mecca” can come about by vigorous government. A governor and General Assembly devoted the RIGHT WAY to getting people more free time, more job flexibility, and higher wages will make a noticeable difference.
The Josh Elliott way is the WRONG way.
Mark Stewart Greenstein is an educator based in Newington. He was a 2018 governor candidate and is seeking the 5th District Senate seat. He is also the founder of an academy for middle school enrichment: www.AmigoAcademy.us.
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