Business Attitudes Toward Paid Sick Leave Are Changing

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Eileen Appelbaum
Economic Intelligence (U.S. News & World Report), March 6, 2013

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The tide is turning in the debate over whether all employees should be able to earn paid sick leave. The benefits for those who need to be able to take a day off when they have the flu or want to keep a sick child home from school have not been in doubt. From a people perspective, it has never made sense for workers to face the hard choice between going to work sick or staying home and losing a day’s pay and maybe even being told not to bother coming back. Managers and professionals have always been able to use paid sick leave to recover from a routine illness, of course.

The sticking point has been whether American companies could create jobs and would stay in business if they had to allow hourly workers to earn paid sick days. Business organizations and lobbyists ranging from the U.S. Chamber of Commerce to the National Federation of Independent Businesses and the National Restaurant Association answered with a resounding "No!" And in some places, that was enough to scuttle efforts to make a minimum number of paid sick days an employment standard that all workers could rely on—although business owners have been part of all the campaigns for sick days and essential to its success in several places.

The argument that paid sick leave is bad for the economy is much more difficult to make today. As the editors of Philadelphia’s newspapers noted on March 5 as they explained why they changed their position and now support a paid sick days ordinance in Philadelphia,

…what’s also changed is a few years of hard times for many workers, including a confluence of worker-punishing trends … while worker productivity in the U.S. has surged, income and wages have stagnated.

Workers who lack earned sick leave, the editors argued, are vulnerable to job loss and hits to their income that weaken the city’s economy and cost everyone more in higher health and social service costs.

Just as important, we can now draw on the experiences of business owners in Connecticut and in cities such as Seattle, Washington, D.C., and San Francisco, which have had a paid sick leave policy since February 2007. A study of the effects of the San Francisco paid sick leave ordinance  found that the law is rarely abused by workers, most of whom don’t use all their sick leave. And the law is supported by two-thirds of employers, 90 percent of whom report that they have felt little impact from it. The senior vice president of the San Francisco Chamber of Commerce characterized the effects of the earned sick leave ordinance as “fairly benign”.

In Connecticut, labor department data on employment showed that jobs increased in the state’s hospitality and health sectors since the law passed. This led the CEO of the U.S. Women’s Chamber of Commerce to endorse Connecticut’s paid sick leave initiative.

There has been push back from the business lobbyists, of course. With official employment data showing jobs increasing in the Connecticut industries most affected by the law—in sharp contrast to the predictions of many restaurant companies prior to passage—industry lobbyists needed a new line of attack. The Employment Policies Institute, founded by long-time fast food industry lobbyist Richard B. Berman, unveiled a report  purporting to show that even if employment didn’t decline, there were other terrible impacts on Connecticut businesses. But the shoddiness of the research undermines the report’s claims of economic harm.

According to the authors of the report, the 156 companies they surveyed consisted of a hand-picked group of business owners provided “by the Connecticut Business and Industry Association and the Connecticut Restaurant Association….The results,” they write, “should not be interpreted as being representative of the experience of all businesses in the state.” Their survey began in April 2012, not quite four months after implementation of the law and too soon for any part-time workers or most full-time worker to have used any paid sick days. When it was completed in October, nearly half of the businesses in the study still had no experience with an employee who used a paid sick day earned under the new law.

Much of the survey substituted conjecture for experience, and respondents were encouraged to speculate on whether they would hire fewer workers in the future, offer fewer raises, require employees to pay more for their healthcare, or raise prices for their products. Even among a group of respondents most likely to report negative effects, the great majority do not intend to do any of these things. Less than a quarter expect to hire fewer workers, raise employee contributions for healthcare, offer fewer raises, or raise prices. It’s not possible in any case to put much credence in the study.

In the meantime, encouraged by the lack of evidence of job loss as a result of letting workers earn paid sick leave as well as the urgency to keep pay in people’s pockets, legislators in the states of Maryland, Washington, and Massachusetts, and in the cities of New York, Philadelphia, and Portland are considering requiring employers to allow workers to earn paid sick days. In many parts of the country, the idea that workers should not have to go to work sick is gaining a serious hearing.


Eileen Appelbaum is a senior economist at the Center for Economic and Policy Research and the co-author of 'Leaves That Pay: Employer and Worker Experiences With Paid Family Leave in California.'