The Future of Paid Family Leave in Massachusetts Conference Summary

The passage of a paid family leave policy for workers - stalled by the economic recession and the events of September 11 - is still possible in the next legislative session but will require a process of consensus-building as complicated as the Education Reform Act of 1993.

That was the outcome of a major conference - "The Future of Paid Family Leave in Massachusetts: Private Responsibility or Public Good?" - sponsored in April by the Rappaport Institute for Greater Boston at Harvard University's John F. Kennedy School of Government and the Center for Women and Enterprise (CWE). The April 24, 2002, conference was held at The Boston Foundation.

Many of the 100-plus conferees called for continued work on the issue before the November elections. The Boston Foundation volunteered to host gatherings of a working group of all stakeholders to develop greater consensus on the issue. Other organizations - from CWE to MIT's Workplace Center - agreed to participate in the process.

Stakeholders agreed that the costs of paid leave should be shared among families, employers, and the state, as no one sector is capable of bearing the full cost.

At the conference, the Rappaport Institute and CWE released a Working Paper - "Home and Away: The Politics and Policy of Family Leave in Massachusetts," by Charles H. Yelen - that provides an overview of the recent issues and legislative alternatives for paid family leave in Massachusetts. The positions of gubernatorial candidates on the issue were distributed to participants in a handout.

At the center of the conference discussion were Massachusetts House Speaker Thomas N. Finneran, known as the leading "hawk" on state fiscal matters, and Ann Crittenden, award-winning author of The Price of Motherhood: Why the Most Important Job in the World Is Still the Least Valued. A panel discussion moderated by Margie Reedy, anchor at New England Cable News, followed the addresses.

Virtually all of the conference attendees - from all points along the ideological spectrum - agreed on the goal of providing workers with more opportunities to take time off for the birth or adoption of a child, to care for elderly parents, or to tend to sick family members. The questions concerned when, how, and how much.

Crittenden argued that Massachusetts - and the rest of the U.S. - has failed families by forcing them to choose between necessary income and the time they need to care for their children, elders, and other family members with medical emergencies. By not offering paid benefits, Crittenden argued, American policy undermines the stability and health of both families and businesses. The lack of paid benefits also subtly undermines efforts to get young people to form stable families and exacerbates poverty and dysfunctional welfare systems.

"Right now we are throwing the baby out with the bath water," Crittenden said. "No country talks about family values more than America, and no country does less."

Crittenden emphasized that the United States is one of only five countries in the world without paid family leave. She asserted that family leave policies in countries comparable to the United States such as Sweden (where paid leave is available to new mothers for one year and to new fathers for one month) and Canada (where mothers are eligible for 15 weeks of paid leave and either parent may take an additional 35 weeks of leave up to a maximum of $413 per week) contributed to higher productivity, greater participation and stability in the workforce, and stronger morale.

Finneran agreed that family leave is an important issue that should be addressed by the state, but countered that a mandatory and comprehensive paid family leave policy could create a financial burden that would threaten the state's fiscal strength and drive businesses out of the Commonwealth into neighboring states with lower tax and regulatory burdens. He argued that the ideal must be balanced with the real, and that overly ambitious state social policies in the late 1980s were responsible for the loss of 400,000 jobs.

In a lively question-and-answer session after the keynote addresses, a variety of different points were raised.

The day-care tradeoff: Marta Rosa of the Child Care Resource Center argued that paid family leave could reduce the burden on the overburdened day care system. Rosa noted both the high costs of infant care ($10,000 to 12,000 per year) and the long waiting lists for state-subsidized slots (17,000 for children younger than school age).

Finneran and Crittenden agreed that the state and families would save money by providing family leave opportunities rather than more slots in overburdened day care programs for very young children. They both agreed the care at home was preferable since infants benefit from breast-feeding and the opportunity to bond with their parents in their first weeks of life.

A call for incrementalism: Finneran and business advocates said that family leave policy should be developed incrementally and through incentives rather than mandates to avoid unexpected costs and other adverse consequences.

Representative Marie St. Fleur of Dorchester also counseled caution. Recalling her experience as a prosecutor, when she pursued small companies delinquent on their unemployment insurance payments, she argued against using unemployment funds to cover family leave costs. She also advised against mandatory programs that imposed unfair costs on small business.

A call for a comprehensive approach: Crittenden and others countered that only a universal policy would avoid the distortions and inequities of piecemeal private action on the issue. Jennifer Lane, owner of an accounting business that assists other small businesses in complying with regulations, observed that small businesses are unlikely to offer paid leave unless it is mandatory. In almost all cases, she said, businesses do only what is required and slight long-term benefits of a program when confronted with short-term costs.

Kathy Walsh, owner of a small firm in Wellesley, suggested that she would rather be faced with costs for paid family leave than see her daughter and grandchildren continue to struggle with these issues that she herself confronted as a young woman.

Costs in dispute

Both keynote speakers and panelists sparred over the costs of implementing a paid family leave policy in Massachusetts.

Estimates for different policy options range from $10 million in the first year for Finneran's tax credit proposal to $300 million per year for a mandatory employer-paid proposal set forth by Representative Patricia Jehlen and Senator Susan Fargo. Jim Klocke of the Greater Boston Chamber of Commerce estimated that costs could run as high as $1 billion, although some panelists thought this estimate was inflated by a high assumed "take-up" rate.

At a later panel discussion of experts, Randy Albelda, an economist at the University of Massachusetts at Boston, said a paid leave policy would represent a "shifting and smoothing of costs" rather than an increase of costs. The cost of paid family leave programs, she said, would be no greater than the current cost of lost wages, lost pension, and out-of-pocket health care costs of those who leave the workforce on unpaid leaves, the unemployment costs borne by the government, and the cost of lower productivity and morale faced by employers. "We'll all pay" for paid family leave, Albelda said, "but we'll all benefit."

The costs of implementing a paid family leave policy, Crittenden argues, are far lower than the cost of not doing so. In the absence of paid family leave, government expenditures on child care subsidies and welfare payments rise. Studies show poorer health and decreased success in school among low-income families that cannot afford time off to tend to family needs. Calling paid family leave a critical investment in America's greatest source of wealth - its human capital - Crittenden challenged policy-makers and citizens to push for paid family leave.

Finneran said many employers have already made a business decision to offer paid family leave without the "lash of government" mandating this policy. At the same time, Finneran said he recognized that leaving the issue of paid leave to the discretion of the private sector alone will not lead to rapid changes. He called for passage of a tax credit that would compensate employers for part of the cost of financing family leave to quicken the pace of change.

Under the Finneran plan, employers with 250 or fewer employees - a group that encompasses 90 percent of Massachusetts employers and 50 percent of workers - would be eligible for a 20-percent tax credit to offset costs. Employees would bear 20 percent of the cost of family leave policies through decreased wages, while the employer would pay the remaining 60 percent.

Finneran said his plan gives appropriate weight and recognition to both smaller employers, who cannot afford to pay the full cost of paid family leave, and larger employers, such as Raytheon and Gillette, which can.

Jim Klocke of the Greater Boston Chamber of Commerce echoed Finneran, saying that the business community embraces the concept of paid family leave but needs to insure that the policy would not create an uncompetitive tax burden or mandates on business.

Advocates from all sides agreed that families, businesses, and the state should share costs of a program and that no party should bear the entire cost.

Focus on mothers … or family?

As the conference progressed, panelists and others remarked on the "gendered" nature of the discussion. While paid leave should affect both sexes and people throughout the life cycle, the issue was often referred to as a concern for mothers. The tendency to consider family leave a "mother's issue" has contradictory effects on the debate.

On the one hand, limited participation in leave programs would limit the overall costs. The large gap in cost estimates was due to different estimates of the "take-up" rates. Some panelists suggested that the take-up rate would remain low, while others said it would grow over time, as families understood their right to take advantage of a new entitlement program. The higher the take-up rate, the higher the costs of the policy.

On the other hand, restricted participation limits the potential coalition for family leave. By restricting the debate about family leave policy to challenges surrounding childbirth, the coalition cuts itself off from many potential allies.

Ann Bookman, the executive director of the MIT Workplace Center and a former Labor Department official in the Clinton Administration, noted that advocates need to educate Americans about the price children pay for America's lack of attention to family leave. With more awareness of the importance of paid family leave, the general public would be much more likely to support these policies in the voting booth and at tax time. The take-up rate of any paid family leave policy and the cost of such a policy would also rise if families, both men and women, were aware of the importance of leave to their children, but it would be more politically supportable.

Cindy Rizzo, a program manager for the Boston Foundation, noted that family leave policy should not forget the wide range of emergencies and everyday needs that require family members to take time off from work. All panelists agreed that the state should provide at least some financial assistance for missed work due to the need to care for elderly parents, children with serious medical problems, and spouses and other family members with medical needs.

Toward a new paradigm of public and private

Ultimately, a new family leave policy could change the way Americans understand social policy - creating the opportunity for a more efficient as well as inclusive policy.

In introductory remarks, Charles Euchner, executive director of the Rappaport Institute, argued that the family leave debate could lead to a more sophisticated understanding of the appropriate roles for the public and private sectors in American life.

Under the classic understanding of the public-private distinction, articulated by theorists from John Stuart Mill to Hannah Arendt, the public and private realms are considered fundamentally separate and distinct. Although the public realm plays important role in setting the ground rules for society, under the classic understanding, it should be restricted from interfering in the everyday activities of families and firms.

But the debate about family leave underscores the need for private entities to have the support they need to fulfill their distinct roles. "Both families and firms can make the strongest contribution to the larger community," Euchner said, "if they themselves have the support they need to do what they do best." A strong family leave policy - if designed well - could actually reduce the overall role of government in fundamentally private activities.

"Sometimes the best way for government to allow private entities to be free to do their own thing is to provide a basic support structure," Euchner said. "We need to explore whether a paid leave policy should be part of that support structure."

Andrea Silbert, the founder and chief executive officer of the Center for Women and Enterprise, spoke from two perspectives - as a mother and as the head of a nonprofit corporation.

"I understand that businesses need to keep their operations lean and efficient to survive," she said. "I also understand that they need help to provide the support that their employees need to make the best contributions they can to the enterprise. When you think about family leave, it's really a win-win proposition. It's a way of caring for our families at the same time we strengthen our private and nonprofit businesses."

Silbert underscored the need for a partnership to realize the goals of the family leave movement. "The Speaker and the Chamber of Commerce are right that business should not have to bear the brunt of this. They're right to be concerned about the long-term impact on our competitiveness as a state," she said. "Clearly, we need to find a way to create a policy that answers this basic need without breaking anyone's bank."

Calls for action

At several points in the conference, participants noted that with more participation of women in the political process, both as active citizens and as elected officials, the heavy "double burden" of caregiving and wage earning that currently falls on many women is more likely to be at least partially redistributed-to men, to the state, and to the rest of society. Calling mothers "the sleeping political giant of this country," Crittenden urged mothers and other concerned citizens to press for paid family leave. Women legislators urged women to run for political office. Bookman called for the creation of a statewide work-family council - with representation from all stakeholders from business to labor to women's groups - to push the debate over paid family leave.

Silbert closed the conference by noting the agreement that paid family leave is still just as important to Massachusetts as it was the day before September 11, despite the current economic downturn. "Family friendly can be business friendly," she said.