Work-Life Policies That Work At Work:
What Does Research Show?
Eileen Appelbaum
Professor and Director
Center for Women and Work
School of Management and Labor Relations
Rutgers, The State University of New Jersey
January 13, 2004
National Press Club
Washington, DC
Like all other industrialized countries, the U.S. has experienced fundamental changes in the nature of both the family and the corporation – the two basic institutions of modern societies. The employment of mothers of young children has increased dramatically since 1970. At the same time, companies have come under intense competitive pressures, giving rise to far reaching changes in how work is structured. These changes have created difficult choices for working families.
American families are making heroic efforts to find private solutions to the challenges of balancing work and family. But leaving working families to cope on their own has imposed extremely high costs on families, workers, employers and the economy. “Split-shift” parenting, latch key kids, high turnover, unplanned absenteeism, poorly paid child care workers, economic insecurity, as well as the loss of skilled employees and labor shortages in occupations as diverse as nursing and high technology all have roots in the failure of public policy to respond to the increase in women’s employment.
The types of challenges facing working families that have to balance the requirements of paid employment with the needs of children are not unique to the U.S. The problems of achieving a workable balance are more acute here than in Europe, however, because of the lack of public policies to support working families.
Early in the last century, when the U.S. shifted from a farm and family economy to an industrial economy and men left home to work for pay, there was a strong public policy response. The country put in place a system of social insurance for families in the event that the male breadwinner was no longer available to work – unemployment insurance if he became unemployed, workers’ compensation if he was injured on the job, social security if he became disabled or died.
Now, the U.S. faces an equally dramatic change in the growth of dual earner families and the increase in the number of working moms. Families need new forms of social insurance and policies that will support both paid and unpaid caregivers.
Paid family leave is critical for workers, for families and for the workplace. Children in low- and middle-income families are particularly at risk when their parents do not have paid leave to care for a new child or a sick family member, or fulfill other critical family care responsibilities. Early bonding lays the foundations for a child's healthy physical, intellectual, and social development. Older children are healthier and more successful in school when a parent is able to attend school meetings and stay home when the child is sick. Jody Heymann found that half of the parents of children scoring in the bottom quartile on math and reading tests were or had recently been in jobs without any paid leave. According to a recent survey by the Kaiser Family Foundation, half of working mothers and 30% of working fathers miss work when a child is sick with a common illness. Two thirds of low-income mothers and one third of moderate and upper income mothers who miss work when a child is sick also lose pay. Not surprisingly, parents of all income levels who have paid leave are more likely to stay home with a sick child, and medical studies have found that children recover more quickly when a parent is present.
In addition to responsibilities for children, growing numbers of workers are providing care to older relatives. Roughly 40% of working Americans now provide unpaid assistance to their parents or parents-in-law. The majority of workers caring for senior family members lose income both in the short term and in the long run, because of lost hours of work, passed up promotions, and reduced Social Security and pension benefits.
In today's economy, all workers need annual paid leave to deal with such routine needs as a child's flu or a school meeting, and also need paid family leave for more critical needs. While most middle-class workers take for granted access to a limited amount of sick leave and vacation, many lower income workers have no paid leave of any kind. Thus low-income workers are often forced to take time off without pay to provide family care, not only losing immediate family income, but risking losing their jobs altogether. They also lose opportunities for the long-term career growth and asset development that would enable them to work their way permanently out of poverty. Studies show that welfare leavers and other low-income workers have high rates of job churning (moving from one job to another), often because of family care responsibilities. Work cannot pay if it does not last – and it cannot last if it jeopardizes children.
In short, lack of leave adds to the high cost of being poor. It has a direct impact on child and family well-being and on the ability of low-wage workers to stay employed.
European countries are ahead of us in facing up to this challenge.
In Western Europe, social insurance systems (similar to unemployment insurance in the U.S.) provide fully or partially paid maternity leave of between 14 and 18 weeks, depending on the country (UK: 6 weeks at 90% of wages, 12 weeks at the equivalent of $92 a week).
Parental leave of between 13 weeks and 3 years is available to parents of young children in all of the Western European countries, with at least 10 weeks paid (except for the UK and the Netherlands where the leaves are unpaid, and France where they are unpaid for the first child).
In the U.S., only five states have temporary disability insurance programs for workers who have temporary health problems, and these states provide disability benefits to women who have given birth (typically 6 weeks for a vaginal birth and 8 weeks for Caesarian). California has passed a paid family medical leave act, which went into effect on January 1, 2004 and will start paying benefits on July 1 of this year. It is financed by a payroll tax paid entirely by workers, and provides up to 6 weeks of paid family leave.
Total expenditures for cash benefits for families (family allowances for children, family support benefits such as TANF, single parent benefits, paid family leave, refundable tax credits such as the EITC) are 2.0 to 2.4% of GDP in the countries with the most generous benefits. The median is 1.5% of GDP. The U.S. spends 0.5% of GDP on cash benefits for families, mostly for the EITC. (By comparison, defense spending is about 8 times as large as a share of GDP.)
The share of children ages 3, 4, or 5 years old served in publicly financed care (including kindergarten) is 53% in the U.S. It ranges from 66% to 99% in European countries (77% in the UK) with a median for European countries of 77%. Only a few countries provide much in the way of publicly financed childcare for children 2 years of age or younger.
The U.S. is the only advanced industrial country where it is legal to pay part-time workers less on an hourly basis than is paid to comparable full-time workers – the last legal form of pay discrimination in this country. Other countries have outlawed this pay practice as a form of indirect sex discrimination in wages, since it is mainly (although not exclusively) women who are disadvantaged by this practice.
Since 1997, employers in European Union countries have been required to pay part-time workers the same hourly wage and pro-rated benefits and to provide the same employment conditions as are enjoyed by a comparable full-time worker.
Pro-rated unemployment compensation benefits are more widely available to part-time workers and to those seeking part-time jobs in Europe than they are in the U.S.
Since 1993 the EU countries have had a maximum hours of work law that limits working time, including overtime, to 48 hours a week. Moreover, employers cannot require employees to work more than 13 hours per day – dangerous double shifts are not legal.
One final example: The Netherlands has addressed the issue of high employee stress and high employee turnover for health care workers (a serious problem in the U.S. as well) by reducing the work week for these employees to 36 hours a week (typically five 8-hour days one week, and four 8-hour days the next), with no mandatory overtime.
Polling data for the U.S. shows that Americans favor paid family and medical leave benefits for workers. These benefits provide partial replacement of wages for workers who take leave because they are sick, to care for a new child (birth or adoption), or to care for a sick parent, spouse, partner or child. The most recent poll of a random sample of adults was conducted this past fall in California. It found that:
European employers have been able to adapt to these policies. In 2000, I was part of a research team that visited for-profit (and highly profitable, well-known) companies in Sweden, Germany, the Netherlands, Italy, Australia, and Japan to learn how they manage to be profitable with such very different rules of the game (see the report “Shared Work, Valued Care” at www.epinet.org). Among our findings is that, with most benefits paid through social insurance and not by individual companies, employers were able to adapt and be profitable – much as U.S. companies do with unemployment insurance. Moreover, countries like the Netherlands face immediate labor skill shortages while countries like Japan and Italy face such shortages in the foreseeable future as a result of low birth rates. Such policies are a way to overcome these shortages by making it possible for women as well as men to work and for families to successfully raise children. Swedish respondents raised concerns that if Swedish women, who are as highly educated as Swedish men and have very high employment rates, were to reduce their employment, per capita income would fall dramatically. (Could the U.S. maintain its position as one of the wealthiest countries in the world without the labor market contributions of women; and could middle class families maintain that status on just one income?) (See also the research paper “Organizations and the Intersection of Work and Family: A Comparative Perspective at www.cww.rutgers.edu.)
Despite much trepidation, U.S. employers have adapted to the 1993 Family and Medical Leave Act, which provides unpaid leave for employees. A 2000 survey of establishments found that 84% reported that the FMLA had no noticeable effect or a positive effect on business productivity, and 90% reported the same for business profitability and growth. (A third of establishments reported difficulty maintaining necessary records, coordinating state and federal leave policies, and coordinating federal and company leave policies.)
In line with these findings, human resource managers at a recent workshop agreed that the 1993 FMLA had been a “nonevent” for them. It may well turn out that paid leave and other work-life policies will have similarly benign effects for most U.S. employers. Access to benefits is uneven, but a 2000 Labor Department study found that 65% of employees already get some pay from their employers when they take family or medical leave. These employees and their employers would probably experience little change as a result of national paid leave policies, except that many of these employers would experience a cost savings as a result of a shift to social insurance for such leaves. Less fortunate employees would not have to choose between caring for a sick child and putting food on the table. Research is underway to determine the impact on different types of employers and, if necessary, to propose remedies such as subsidies for those disproportionately affected. For most employers, this is unlikely to be a problem.
