Paid Leave Isn't Free Leave

'Everyone thinks it is a great idea because they think somebody else is paying for it and it’s not them'

A recent Michigan Public Radio story promoted a poll's finding that found 86 percent of Michigan voters support the concept of employees getting paid time off for illness or to provide care to a family member. The poll was done by Denno Research.

The story pointed out that Democratic state lawmakers had introduced House Bill 4167 and Senate Bill 101, both of which would require employers to give paid sick leave to their employees. The paid leave would be between 40 to 72 hours annually, depending on the size of the business.

But an advocate for small business owners and an economics professor say forcing paid leave on employers would have negative consequences.

“This is government micromanagement of the workforce,” said Charles Owens, the state chairman for the National Federation of Independent Business.

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Owens said medium and large businesses already have policies to cover paid leave, and small businesses work with valued employees on issues that require time off.

“Everyone thinks it is a great idea because they think somebody else is paying for it and it’s not them,” Owens said. “The (business) response would be to cut jobs.”

The NFIB Research Foundation did studies in three states on the impact of mandated paid leave. The studies project that mandated paid leave would result in an average of a decrease in real output by $17.4 billion within ten years. Mandated paid leave would also result in an average loss of 80,000 jobs over the next 10 years.

Owens said if employers are required to pay for employees’ leave, that will mean there is less money available for optional benefits such as retirement programs or wage increases.

Mark Perry, a scholar at the American Enterprise Institute and a professor of finance and business economics at University of Michigan-Flint, said if passed it would be the third recent government mandate on private business.

Perry pointed to the increase in minimum wage and the national health care law that mandated business provide coverage for employees or face a penalty.

“This will have negative consequences for many small businesses and other employers of unskilled and low-skilled workers,” Perry said in an email. “It will also reduce employment opportunities for entry-level workers in Michigan. Overall, a government mandate for paid sick time would have very serious negative effects on Michigan businesses and Michigan workers.”
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See also:

The Machinations Behind Michigan's Minimum Wage Hike

Harming the Competition


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