Why Paid Parental Leave Is a Huge Economic Benefit

Why Paid Parental Leave Is a Huge Economic Benefit

Like most new parents, the birth of my daughter completely turned my world upside down. Unlike most new parents, I was adopting and I had only one week of notice before she arrived. Which meant there were no months of preparation or time spent analyzing how I would make it work to stay home with her for at least those first few weeks.


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Before she was actually born, I told my job I would only need a week or two off. I had 10 paid vacation days saved up — I figured I would use them and then get back into the swing of things. A friend of mine had already offered to watch her for me, and I knew I wouldn’t be recovering from labor, so I never dreamed I would need more time than that.

The second she was actually in my arms, however, that all changed. With a quick and fierce boom of love that told me this little girl needed her mommy home during those early stages of life. She needed to learn my smell, to know that she was wanted and safe and loved. She needed the stability of being home and the comfort of knowing where she belonged.

She needed me. And taking her off to someone else’s home for 40+ hours a week when she was only a few weeks old would have been monumentally wrong for both of us. So instead, I opted to take advantage of the full 12 weeks of FMLA I was entitled to. Even though that would mean giving up my salary for those three months.

Thankfully, I was in a position to be able to work from home on various writing projects. So at least I was able to somewhat supplement my lost income. But it wasn’t easy. There was no sleeping when the baby was sleeping. There was only working. Splitting my time between this little girl and paying our bills as best I could.

It certainly wasn’t ideal, but it was better than the alternative.

Still, there were many times during those first few months when I lamented the barbaric leave policies within the United States that allow only for 12 weeks off with the birth of a new child — none of it paid.

Compared to every single other developed nation (and plenty that wouldn’t be otherwise considered developed) we are severely lacking in this way. In fact, based on a report by the International Labor Organization (an agency of the United Nations), out of 170 countries and territories surveyed, only the United States and Papua New Guinea fail to provide some sort of paid leave in the months following the birth of a new child. Not only do we offer the shortest period of leave (compared to up to a year in some other countries) but we are the only developed nation who doesn’t provide any kind of financial support during that time.

President Obama has now declared his intent to change that, announcing plans to bring the United States in line with the rest of the world during a Working Families Summit in Washington on Monday, June 23, 2014. He further outlined his plans that same day in an op-ed reiterating his commitment to creating a 21st century workplace, more specifically, "the challenges that working parents face every day and how we can address them."

Reactions to Obama's announcement have so far been varied. It seems there are many on both ends of the political spectrum who recognize what a good thing this would be for our country — both socially and economically. But there are plenty still quick to lump this as a move pushed by lazy Americans who are only looking for excuses to get paid without working.

Anyone who has ever cared for a new baby should know that there is nothing at all lazy about that act.

But if you haven’t actually researched the social and economic benefits of paid parental leave (as well as the reasons why every other developed nation has embraced plans that support new parents in this way) then perhaps I can see how you would come to think of this as just another handout.

Let me explain to you why it is anything but that.

There are several far-reaching societal benefits to a decent paid parental leave plan. First, it encourages extended breastfeeding, which can lead to healthier babies and also help new moms to bounce back sooner from the trying physical and emotional effects of labor. Healthier moms and babies also, by extension, mean less financial strain on public health services.

The long-term benefit on children is significant as well. Paid parental leave shows that as a society, we value the work that goes into raising healthy, productive and happy children. It places a priority on those initial bonding experiences that have been proven time and time again to be so crucial to a child’s healthy development. A 2012 University of Iowa study found that “infants who have a close, intimate relationship with a parent are less likely to be troubled, aggressive or experience other emotional and behavioral problems when they reach school age.”

That certainly isn’t the only societal benefit, however. According to the 2008 Australian Productivity Commission Inquiry into Paid Parental Leave:

  • There is compelling evidence of child and maternal health and development benefits from a period of absence from work for the primary caregiver of around six months;
  • There are sound rationales for stimulating women’s labor force participation rates to overcome the disincentives imposed by the existing welfare and tax systems on women’s labor force participation; and
  • PPL could advance broad social objectives, such as achieving greater gender equity and balance between paid work and family life.

Then there are the economic benefits. Because, yes, there are economic benefits to supporting parents during those difficult first months of a child’s life.

The first is that paid maternity leave encourages women to remain in the workforce, which is actually an incredibly important deal, economically. According to a Rutgers report by the National Partnership for Women & Families, “Women who report taking paid leave are more likely to be working 9 to 12 months after a child’s birth than those who report taking no leave at all.” When that leave isn’t available, women are more likely to leave the workforce entirely. But when it is offered, women consistently report a stronger labor force attachment and positive changes in wages.

And do you know what happens then? According to the same report, those women who receive paid leave are 39 percent less likely to go on public assistance and 40 percent less likely to become food stamp recipients.

That is a huge economic benefit.

Men who return to work after paid family leave are also much less likely to receive public assistance than those who never received paid leave at all.

Beyond that, an opening is created during that paid leave for new workers to get training and gain skills they may not otherwise have had access to. Thus providing opportunities to train up the future workforce and creating jobs that otherwise may not have been there.

Paid parental leave also has the added benefit of reducing the gap in wage disparity between men and women, which continues to be of economic concern nationwide.

Recent legislation introduced by Rep. Rosa DeLauro of Connecticut would provide for up to 12 weeks of paid leave for new parents. The cost? A federal tax increase of .2 percent of wages. That’s two cents for every $10 you make. Or roughly $100 annually for someone who makes a salary of $50,000 per year.

With that increase, every worker in the country could take advantage of the new baby bonding time that has such drastic societal and economic benefits. Benefits that ensure even those who never have children at all, are still better off because of the availability of leave than they would have been otherwise.

We are the only developed nation in the world who doesn’t recognize the value in that.

It’s time for us to change. Not because we are a nation of lazy citizens looking for another handout. But because there is intelligence in recognizing the value that comes with supporting those bonds. And our children deserve that. So that the next generation can continue to grow up healthier, happier and more productive than the last.

Originally published on Mom.me.

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