NCPA - National Center for Policy Analysis


November 20, 2009

Congress seeks to use the H1N1 pandemic to do what Democrats have wanted to do for years -- to write into federal law, for the first time, a requirement that employers give workers paid sick leave, says Diana Furchtgott-Roth, an adjunct fellow at the Manhattan Institute.

On Tuesday Connecticut Democrats Senator Chris Dodd and Representative Rosa DeLauro released the Pandemic Protection for Workers, Families, and Businesses Act:

  • It would require that all employers with more than 15 workers offer full-time workers seven days of paid sick leave, and part-time employees a share commensurate with hours worked.
  • But with an unemployment rate of 10.2 percent and forecast to rise even further, the additional cost of paid sick leave would discourage hiring, lower some workers' wages, and cause others with low skills to lose jobs.

Under the bill:

  • Paid sick time would not just be available when workers were sick.
  • An employee would also be able to use leave to look after sick children -- to stay home with them when they were sick, to take them to the doctor for routine as well as sick visits, or to stay home with them when schools were closed due to the sickness of other children.

Use of sick leave in the bill is restricted to contagious diseases, but it's a fair bet that as soon as Congress hears from breast cancer patients, HIV/AIDS sufferers, and car accident victims that the law would be extended to cover all sickness, says Furchtgott-Roth.

Bills to require sick leave have never passed Congress for a simple reason, says Furchtgott-Roth: they don't make sense.  More than three-fourths of workers already have sick leave and would derive no benefit from a new federal law; workers without sick leave are often in entry-level jobs and might lose their jobs altogether.

Economists such as Harvard University's Alberto Alesina and the Massachusetts Institute of Technology's (MIT) Olivier Blanchard, now International Monetary Fund (IMF) chief economist, have reached the same conclusion: European labor market regulations, including those that award sick pay, have resulted in higher unemployment because employers substituted labor-saving machines as the cost of low-skill workers went up.

With the U.S. unemployment rate at a 26-year high, this is not the time to price American workers out of jobs, says Furchtgott-Roth.

Source: Diana Furchtgott-Roth, "'Sick Leave Mandates We Can Ill Afford," RealClearMarkets, November 19, 2009.

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