Tag Archives: paid sick leave

It’s Not What Employers Are Doing, But What They Can Do, That Matters

A few days ago, Buzzfeed reported that Staples, the large office supply chain, had stepped up its enforcement of a cap on hours worked for part-time employees. Despite the company’s unconvincing claim* that the policy is longstanding, it appears that Staples implemented the 25-hour-per-week cap in January of 2014 “to skirt impending rules requiring companies to provide health insurance” to employees who work at least 30 hours a week.

Staples' original memo to store managers, as published by Buzzfeed.

Staples’ original memo to store managers, as published by Buzzfeed.

Staples’ decision will undoubtedly renew arguments that the Affordable Care Act’s (ACA’s) employer mandate – the provision that requires companies with more than 50 full-time workers to insure employees who work at least 30 hours each week – has led to harmful effects on work. These arguments, like parallel narratives about minimum wage laws and paid sick leave ordinances, are largely inaccurate, and advocates of evidence-based, power-balancing policy are absolutely right to debunk them.

However, we cede too much when, as is often the case, we default to a defensive stance. “Yes, the negative incentive is there, but the data show such effects to be small or non-existent” should not be the full scope of our response.

Instead, it’s imperative that we change the nature of these conversations. As Thomas Pynchon astutely observed: “If they can get you asking the wrong questions, they don’t have to worry about answers.”

Opponents of an employer mandate, minimum wage, and paid sick leave want people to focus on what employers will do in response to each policy’s enactment. The more relevant question, however, is about what employers can do.

First, it’s important to remember that businesses can deduct employer-provided benefits from their tax bills, and that the employer contribution to health benefits is widely viewed as coming out of worker salaries. Providing employees with health coverage, decent wages, and paid sick leave costs less money than a lot of people think, though it’s certainly more expensive than offering meager wages and no benefits.

More importantly, providing such benefits is the right thing to do. And it is undeniable that a typical business, when confronted with the prospect of labor cost increases, has numerous options. The business can explore ways to improve its productivity. It can raise its prices. It can reduce the salaries of affluent executives, or maybe make a little bit less in profits.**

In the most recent quarter for which financial information is available, August through October of 2014, Staples made $216 million in after-tax profits. Their CEO, Ronald Sargeant, made over $10 million in total compensation in 2013, while other top executives raked in well over $2 million apiece. Barack Obama didn’t have those numbers when he was asked about Staples’ policy a few days ago, but his suspicion “that [Staples] could well afford to treat their workers favorably and give them some basic financial security” was clearly right on the money. The ACA didn’t make Staples cut its employees’ part-time hours; instead, Staples management consciously chose to prioritize a fifth car or third house for a few wealthy individuals over its part-time workers’ ability to put food on the table. Other large companies, from Starbucks to McDonald’s to Walmart, make similar callous choices on a range of issues all the time.

There are two ways to address this problem. The main mechanism currently at our disposal is to loudly call such decision-making what it is – greedy and unethical – and vote with our dollars for companies that treat their workers fairly. Opponents of labor standards focus on what businesses will do rather than what they can do in part because we let them avoid moral reckoning. We won’t win everyone over, but we must not underestimate the power that moral authority has to shape behavior.

The second mechanism is policy that addresses firms’ decision-making. Some recent legislative proposals, in fact, like Congressman Chris Van Hollen’s CEO-Employee Fairness Act, have the potential to begin to wade into these sorts of waters. If we’re worried that companies will choose to lay people off in response to a minimum wage increase, for example, we could raise taxes on the executives of companies that make this choice.

No matter the policy outcomes, it’s essential that we ask the right questions in these debates. It’s worthwhile and important to document the evidence that policies like the employer mandate, minimum wage, and paid sick leave have minimal consequences on work. But it’s also essential to point out that any consequences these policies do have aren’t inevitable.

*As Buzzfeed’s original coverage explained, Staples claims that their part-time hours policy has been in effect for over ten years, and that the memo Buzzfeed obtained only “reiterated the policy.” Yet the memo contained phrases like, “Beginning with the week ending 1/4/2014,” and “Staples is implementing a policy.” A Staples spokesperson did not respond to follow-up questions about the memo’s language.

**It’s possible, though I’ve never seen a study to prove it, that some businesses actually can’t afford to adequately compensate their workers, that they’re barely squeaking by as is with low executive salaries, non-existent profits, and the highest level of productivity they can possibly attain. To the extent these businesses exist – and I’m skeptical that many of them do – it’s worth asking whether a business’s right to keep its doors open should trump its workers’ right to make enough to provide for their families. I don’t believe it should.

Note: A version of this post appeared in The Huffington Post on February 16.

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Paid Sick Leave and the Three Lenses of Policy Analysis

Some political debates have two equally valid sides.  More often than not, however, the evidence is significantly more one-sided than journalists and pundits suggest.  AB 1522, a bill that the California Senate’s Committee on Appropriations just shunted into its Suspense File for consideration on August 14, is an example of legislation for which there is no ethical, intellectually honest opposition.  Three related lenses of policy analysis demonstrate why AB 1522’s minimum requirement of three paid sick days for all California workers deserves our support.

The ethical lens: The debate about paid sick leave, at its core, is about values.  It is undisputed that high percentages of low-income workers, particularly women and Latinos, currently lack the access to paid sick leave enjoyed by more privileged populations.  Supporters of a guaranteed minimum number of days recognize that low-income workers must often decide between working through illness and leaving bills unpaid.  Nobody should have to make that choice.

Opposition to guaranteed paid sick days, on the other hand, elevates considerations of employer profit and flexibility above the job security and subsistence of sick low-income workers.  No matter its professed motivation, therefore, anti-paid sick day activism is immoral by most people’s standards.

The factual lens: Few opponents of AB 1522 explicitly state a disregard for the plight of the working poor.  Instead, they call the bill a “job killer,” enumerating a long list of reasons that guaranteed paid sick leave will allegedly harm working Americans.  Some of the listed reasons are obvious fabrications; for example, the idea that employers who already offer paid sick leave “will have to completely change their existing policies and accounting procedures” is directly contradicted by the law’s provision that “an employer is not required to provide additional paid sick days…if the employer…makes available an amount of leave that satisfies the accrual requirements.”

Other opposition arguments, though slightly more time-consuming to debunk, are no less untrue.  To contend that AB 1522 “will reduce jobs,” its detractors, like those who oppose paying employees a living wage, embrace an economic theory that’s inconsistent with the facts.  Even studies that rely exclusively on the unverified assertions of employers fail to suggest negative economic consequences of paid sick leave laws.  The first report opponents of AB 1522 attempt to marshal in support of their claims concludes only that it was “too early to make a definitive judgment about” the economic effects of Connecticut’s paid sick leave law in February 2013.  A more comprehensive study of the Connecticut law’s effects in March 2014 notes:

most employers reported a modest effect or no effect of the law on their costs or business operations; and they typically found that the administrative burden was minimal.  [Despite] strong business opposition to the law prior to its passage, a year and a half after its implementation, more than three-quarters of surveyed employers expressed support for the earned paid sick leave law.

The findings from the opponents’ second citation, a 2011 report from the Institute for Women’s Policy Research, similarly contradict their claims.  The study finds that “most San Francisco employers reported that implementing the [city’s Paid Sick Leave Ordinance] was not difficult and that it did not negatively affect their profitability.”  While “a relatively small share of employers and employees” reported negative effects, the study concludes that the law “is functioning as intended.”  Just about every study on the economic effects of paid sick leave legislation, in fact, refutes the myths propagated by opponents of the laws.  Research studies also clearly demonstrate “that gaps in paid sick leave result in severe impacts on public health.”  This clear consensus helps explain why “the rest of the world’s rich economies have taken a legislative approach to ensuring paid sick days.”

The political lens: Despite the clear ethical arguments, research consensus, and overwhelming public support in favor of guaranteed paid sick day laws, several states have passed bills that preempt cities’ attempts to enact such legislation.  In 2008, a more robust sick leave bill (AB 2716) died after ending up in the Suspense File of the California Senate’s Committee on Appropriations, the same place in which AB 1522 currently resides.  A coalition of corporate lobbyists, led by chambers of commerce and the American Legislative Exchange Council (ALEC), is responsible.  This coalition has, in the words of David Sirota, successfully recast their “desire to exploit workers as fight-for-the-little guy altruism” by confusing the public and politicians with a relentless stream of unfounded claims.

A simple analysis of the broader advocacy decisions and agendas of the parties to a debate can help us assess the likely veracity of each party’s claims.  For several years now, the corporate coalition that opposes AB 1522 has been systematically “reshaping the fundamental balance of power between workers and employers.”  They have misled the public about a wide variety of issues and maintain clear power and profit motives for misleading the public about sick leave.  People unfamiliar with the specifics of AB 1522 could compare the backgrounds of its opponents with its supporters (typically academics, labor organizations, and other groups that advocate for low-income people) and recognize that proponents of AB 1522 are significantly more likely to be telling the truth.  This political lens heuristic isn’t failsafe – first impressions can be wrong and even the worst organizations sometimes endorse correct policy decisions – but it always provides valuable perspective.  Funding sources and political allies are especially important indicators of truth when topics involve complex research findings and/or similar ethical arguments from each side of a debate.

On the issue of guaranteed paid sick leave, however, each of the three lenses – ethical, factual, and political – is extremely straightforward; if anything, the three days required by AB 1522 are too few.  California lawmakers should rectify their predecessors mistakes and move the bill forward on August 14.

Note: Versions of this post originally appeared on The Left Hook and The Huffington Post.

Update (8/30/14): An amended version of the bill that “would exempt in-home caregivers from the requirement” has “cleared the legislature.”  The SEIU and other unions pulled their support because of the unnecessary and unethical exemption, and I believe they were correct to do so.

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