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Can D.C. afford 16 weeks of paid leave for workers? That depends. Can D.C. afford 16 weeks of paid leave for workers? That depends.
(about 13 hours later)
In the four months since D.C. lawmakers proposed making the nation’s capital the most generous place in the country for paid family leave, there has been a giant hole in the debate: the missing financial analysis explaining how the city could afford to be more like Europe and let workers take 16 weeks of paid time off. District lawmakers’ support for a proposed landmark law giving workers 16 weeks of paid family leave appeared shaken Thursday after a series of reports showed disagreement over how much the benefit would cost local businesses.
On Thursday, such a study funded by the Obama administration will be released. And to the delight of proponents, it will show that a new tax of less than 1 percent could pay for the entire program. Mayor Muriel E. Bowser’s administration released the first of the reports, a study funded by the Obama administration. And to the delight of proponents, it showed that salaries of every worker in the District who would take paid time off for the birth of a baby or to care for a dying relative could be covered for about the cost of a proposed 1 percent salary tax on employers.
It also will be hotly contested. A competing study set to be released by business groups will say that costs to employers could be about 150 percent higher. And the District’s chief financial officer may weigh in with an even bigger range, saying that the total price tag of the new policy remains unclear because it’s not apparent how many more people would take leave if they were paid for it. Within a few hours, however, it wasn’t clear that the lawmakers believed those figures, which found that the initiative could cost $300 million.
The barrage of competing numbers promises to increase pressure on the D.C. Council to dial back what proponents have hoped would be a landmark advance in paid time off for new parents, grieving families and sick workers, allowing them to recuperate without the worry of being able to make ends meet. Some paid sick-leave proponents are blaming the administration of D.C. Mayor Muriel E. Bowser (D) for orchestrating the confusion. Aides to Bowser (D) distanced the mayor from the study funded with a Department of Labor grant. A Washington-area business group presented a competing study to the D.C. Council, claiming that the costs would be north of $700 million, or 150 percent higher. Meanwhile, Jeffrey DeWitt, the District’s chief financial officer, said the total price tag could top all business taxes collected annually in the city, but that still may not be enough to cover costs. And in perhaps the most stunning moment of the debate, a top researcher at the left-leaning Urban Institute said that even D.C. business owners had underestimated the costs. The price could top $1.3 billion a year, he estimated, or five times the cost that the researchers funded by the Obama administration had concluded.
Under the legislation before the council, almost every part-time and full-time employee in the city would be entitled to 16 weeks of paid family leave to bond with an infant or an adopted child, recover from an illness, recuperate from a military deployment, or tend to an ill family member. The conflicting reports illustrate a major step back for the proposal, which was enthusiastically supported by the Obama administration and would be the most generous family leave law in the country.
The barrage of conflicting reports and figures left even the bill’s authors publicly searching for ways to dial back a plan proponents unveiled with great fanfare last fall, when a majority of the D.C. Council signed on as co-introducers and the council appeared poised to fast-track legislation that could give European-style benefits to city residents and have ripple effects nationwide in a presidential election year.
[D.C.’s family leave measure would be the most generous in the U.S.]
Democratic frontrunner Hillary Clinton lauded the 16-week paid family leave bill late last year on social media, and even some Republican candidates have weighed in, saying that although government should be less involved than what D.C. has proposed, the country must do more on the issue to help working families.
On Thursday, for the first time, the D.C. Council confronted the difficulty of determining the true potential cost of the benefit.
Top aides to Bowser, who testified even before the most confounding information was presented, urged the council to slow down and, in fact, stand back while the mayor’s office took the lead in forming a working group to study the possible costs to businesses. City Administrator Rashad M. Young said the mayor’s administration needs time to analyze family leave costs in connection with a proposed initiative for the November ballot that could raise the minimum wage in the city to $15 per hour.
Council Chairman Phil Mendelson, who will be in charge of crafting the final legislation, said he would not abdicate the council’s role in deciding whether to move forward on family leave to the mayor. But as the day wore on, he was increasingly critical of advocates, saying they would have to do better at analyzing the potential costs. “You all are talking about the benefits,” he said, “but the benefits of leave are not the challenge before us. . . . The issue this council faces is the cost.”
Under the legislation, almost every part-time and full-time employee in the city would be entitled to 16 weeks of paid leave to bond with an infant or an adopted child, recuperate from a military deployment, tend to an ill family member or recover from an illness.
Salaries would be reimbursed at 100 percent for those who make up to $52,000 a year, maxing out at $3,000 per week.
The benefit would be paid through a fund that all private employers would have to pay into, as would federal employees, because the District cannot legally tax the federal government or compel it to contribute on behalf of its employees.
The District’s plan would dwarf the handful of paid family leave programs in existence nationwide, which now max out at six weeks of partial salary reimbursement in California and New Jersey.
A major point of contention centered around just how many employees in the city would avail themselves of paid leave if it were offered.
There wasn’t much disagreement about the group that has become the face of the initiative: mothers of new babies, seeking time to bond.
In 2014, about 10,000 women in the District took at least some time off to care for new children. Proponents said the number taking leave could rise to about 12,500, or 99 percent of all new mothers and some fathers under the plan. Proponents and critics also agreed that family leave would likely not encourage more city residents to have children or have a measurable effect on the city’s birthrate.
But advocates and business leaders differed on estimates of how many new fathers would put in for the paid leave to spend with newborns if it were covered at 100 percent of salary. And the two sides had wildly different assumptions about how many people would take time off to care for a dying relative and, especially, how many would seek paid time off for a personal illness and for how long.
Testimony presented Thursday made clear that a major problem for the District’s plan is rooted in how it would stand up the equivalent of a state temporary disability system under the umbrella of a family leave program.
Even though new mothers have packed the District’s council chambers with strollers and crying infants, the majority of leaves would be by workers who take time off for personal illnesses.
Advocates for the bill, titled the Universal Paid Leave Act, said that despite the costs, medical leaves should remain included because such cases are the leading cause of personal bankruptcies and because low-income workers often have the fewest resources to hold on to a job when they are struck by a major illness.
Politically, the debate presented a new challenge for Bowser as Young, her city administrator, at one point suggested that the council consider tabling the idea and wait for a national policy on paid family leave to come from Congress.
David Grosso (I-At Large), a co-author of the bill, fired back that it could take 50 years for Congress to act, and he questioned from the dais how Young could propose that “with a straight face.”
Bowser’s reluctance to quickly embrace an ambitious family leave program could further strain her relationship with liberals and progressives, some of whom have questioned whether she is too cozy with business interests since she reversed course and backed a merger of Pepco, the city’s electric utility, with Exelon, a Chicago-based nuclear energy giant.
Some even said the mayor’s office contributed to weakening prospects for the bill.
[D.C.’s family leave program could be the most generous in the U.S.][D.C.’s family leave program could be the most generous in the U.S.]
The financial analysis underpinning the plan was launched under former mayor Vincent C. Gray (D) and paid for with a grant from the Obama administration. The Labor Department has encouraged local jurisdictions to do what a Republican-led Congress won’t by advancing aggressive new paid-leave policies, calling them important to closing the economic divide between the rich and working class. The Labor Department has encouraged local jurisdictions to do what a Republican-led Congress likely won’t by advancing aggressive new paid-leave policies on the local level, calling them important to closing the economic divide between the rich and the working class.
The government-funded report by the Institute for Women’s Policy Research was delivered to the city in mid-November, and the president of the organization said she was promised it would be made public a few days later. But it was kept under wraps until now and is being released on the same day as the competing proposals by groups that have urged Bowser to move more slowly. The $100,000 report by the Institute for Women’s Policy Research was delivered to Bowser’s administration in mid-November, and the president of the organization said she was promised that it would be made public a few days later. But it was kept under wraps until this week and made public only as competing proposals were by groups that have urged Bowser to move more slowly.
Bowser spokesman Michael Czin said the administration was busy vetting the IWPR report through the holidays. He also said the administration would propose further study in testimony before the council Thursday. Bowser spokesman Michael Czin said the administration was busy vetting the Women’s Policy Research group’s report through the holidays. He also said the administration would propose further study in testimony before the council Thursday.
City Administrator Rashad M. Young will propose that any change in the city’s paid family-leave program be studied in conjunction with a possible November ballot measure that could force the city to raise its minimum wage to $15 and with other worker benefit expansions under consideration by the council. Heidi Hartmann, president of the Institute for Women’s Policy Research, said her organization modeled the likely costs to the city after the experiences of New Jersey and California, which have had smaller paid family leave programs for years.
“We’re going to put together a working group of stakeholders from government to really look and take a holistic approach and leverage our resources to create pathways to the middle class,” Czin said. The model of Hartmann’s group predicted that 110,000 people in the city would take paid leave in the first year, compared to roughly 100,000 who do so now. Less than 13,000 of those would be for maternity and bonding with new children. Less than 20,000 would be for taking care of family members, and almost 50,000 would be for workers dealing with their own medical problems.
[D.C. residents love the idea of paid leave, just not the idea of paying for it] The total cost in benefits paid would be about $281 million, according to an analysis by the organization.
Bowser’s reluctance to quickly embrace an ambitious family-leave program could further strain her relationship with liberals and progressives, some of whom have questioned whether she is too cozy with business interests since she reversed course and backed a merger of Pepco, the city’s electric utility, with Exelon, a Chicago-based nuclear energy giant.
Heidi Hartmann, president of the Institute for Women’s Policy Research, said her organization modeled the likely costs to the city on the experience of New Jersey and California, which have had smaller paid family-leave programs for years.
The IWPR model predicted that a total of 110,000 people in the city would take paid leave in the first year, compared with roughly 100,000 who take unpaid leave now. Less than 13,000 of those would be for maternity and bonding with new children. Less than 20,000 would be for taking care of family members and almost 50,000 would be for workers dealing with their own medical problems.
The total cost in benefits paid would be about $281 million, according to an analysis by the organization.
The study, provided to the city in November, did not directly analyze the legislation introduced in October, but the group has paid for modeling with other grants it has received from philanthropic groups to help inform the debate in the city, Hartmann said.
The group’s report, though, made clear that it supported the proposal. For employers, the report said, paid family leave would increase employee productivity, morale and loyalty. For workers, it would improve peace of mind and better health outcomes for children.
The District currently requires businesses with 20 or more employees to grant workers the right to take as many as 16 weeks of unpaid family leave and 16 weeks of unpaid medical leave in a 24-month period. The city also requires employers to provide three to seven days of paid sick leave a year, depending on the size of the company.The District currently requires businesses with 20 or more employees to grant workers the right to take as many as 16 weeks of unpaid family leave and 16 weeks of unpaid medical leave in a 24-month period. The city also requires employers to provide three to seven days of paid sick leave a year, depending on the size of the company.
D.C. government employees may receive up to eight weeks of paid leave under a measure passed two years ago.D.C. government employees may receive up to eight weeks of paid leave under a measure passed two years ago.
The IWPR said the costs of increasing all of those benefits to 16 weeks of paid leave were manageable, with a 0.63 percent tax on employers. The Institute for Women’s Policy Research said the costs of increasing all of those benefits to 16 weeks of paid leave were manageable, with a 0.63 percent tax on employers.
“Based on the experiences of states that provide paid family and medical leave, and the simulation model results reviewed, D.C. could set up and administer any of the programs examined for less than 1 percent of payroll,” the report said.“Based on the experiences of states that provide paid family and medical leave, and the simulation model results reviewed, D.C. could set up and administer any of the programs examined for less than 1 percent of payroll,” the report said.
A report prepared for the Greater Washington Board of Trade disputed that. It found that the total costs could exceed $700 million annually and require a much larger tax increase on employers.A report prepared for the Greater Washington Board of Trade disputed that. It found that the total costs could exceed $700 million annually and require a much larger tax increase on employers.
Jim Dinegar, head of the board, said that the organization was willing to work on a compromise but that proponents must take into consideration the regional effects if businesses in Maryland and Virginia do not have to provide comparable benefits and pay similar costs. Jim Dinegar, head of the board, said that the organization was willing to work on a compromise but that proponents must consider the regional effects if businesses in Maryland and Virginia do not have to provide comparable benefits and pay similar costs.
Council member David Grosso (I-At Large) said he was willing to adjust the benefits so that employers pay no more than 1 percent of payroll to provide the benefit. Grossosaid he was willing to adjust the benefits so that employers pay no more than 1 percent of payroll to provide the benefit.
“We can do this,” he said.“We can do this,” he said.