Paid family leave act could help CT economy and prevent foreclosures

In May, the Hartford Courant reported that first-time foreclosure filings in Connecticut are down but we are still the eighth worst state for foreclosures for 2014. The fact that the housing crisis is taking its time moving out of Connecticut should be no surprise; Connecticut lacks a paid family and medical leave policy.

As part of my work for the Women’s Economic Agenda for Connecticut Working Families, I spent the legislative session collecting the stories of women who earn, on average, $15,000 per year. Many don’t have any health insurance outside of Title 19 and they have no savings. Lack of paid family leave devastated their lives when they gave birth or underwent surgery.  As a result, many have lost all hope that they can ever own a home.

But higher income Connecticut residents – homeowners – are affected by the lack of paid family and medical leave as well, perhaps in even more drastic ways and they don’t even know it.

To find more stories of people affected by loss of paid leave, I observed cases on various foreclosure dockets. If I reviewed a transcript of an entire day’s foreclosure proceedings, the phrase “got sick/hurt” would appear well over 100 times; foreclosure defendants in Connecticut either got sick and lost their jobs or had to quit their jobs because a family member became ill.

While there is no data specific to Connecticut, a study of foreclosures in four states, conducted by researchers at Harvard Law School, found that half of the people in foreclosure attributed their financial problems to an illness or injury.

But the half of the respondents in the study who attributed their foreclosures to medical problems is probably not an accurate reflection of illness’ true  impact on their wallets because 69 percent of those same respondents reported one or more of the following objective, measurable problems prior to being served with foreclosure papers: paying more than $2,000 in out-of-pocket medical expenses, missing two or more weeks of work because of illness, disability to the point of not being able to work at all or using home equity to pay medical bills.

Almost 20 percent of the survey respondents – directly affected people — didn’t even realize how their health problems had contributed to their foreclosure which means most people who are lucky enough to remain untouched by the housing crisis don’t comprehend that problems in the housing market are often medically induced. It’s understandable; very few people have studied this connection.

Even though first time foreclosure filings are down in Connecticut, the number of scheduled auction dates is up by 8 percent from the same month last year. This indicates that people are having a much harder time uprighting themselves after a setback.

This is most likely why Connecticut renewed the judicial branch’s foreclosure mediation program – started in 2008 when the number of first-time foreclosure filings boomed – at a cost of $6.7 million dollars because our legislators want to keep Connecticut homeowners who are undergoing foreclosure living in their investments. The program is authorized through 2019.

It made even more sense for the Connecticut General Assembly to pass the Paid Family and Medical Leave Act – at $4 million, a program that costs less than foreclosure mediation – to look beyond 2019 to prevent Connecticut homeowners from going into foreclosure in the first place.

Even though the Paid Family and Medical Leave Act established an insurance program that is entirely employee funded and would have paid for itself in two years,  pro-business legislators – like so many of us – weren’t making the connection between their constituents’ health problems and their local economies. The bill barely squeaked out of the Appropriations Committee.

The Connecticut legislature ultimately didn’t pass Paid Family and Medical Leave into law, but instead included in the budget a commissioned study on how this proposed $4 million paid family and medical leave program can impact the state.

Because so few of us understand the link between health problems and the lack of paid leave, we need it spelled out for us. The researchers conducting the study must include analysis of the lingering foreclosure crisis in Connecticut and how it correlates to health problems that force people out of work.

The report has the potential to make the connections that we have been missing for so long, as well as make paid family and medical leave a priority in the next legislative session.