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It would be one of the largest expansions to the US Social Security Network in decades – a new policy of federal paid leave for all workers.
That’s what President Joe Biden is expected to propose on Wednesday night when he launches his $ 1.8 trillion spending and tax credit plan to get the country’s economy back on its feet after a devastating year.
The national paid family and sick leave program would cost around $ 225 billion in a decade, and the White House says it would be paid for primarily by increasing taxes on the rich.
Within 10 years, Biden’s plan would guarantee workers 12 weeks of paid vacation that they could use to “bond with a new child, care for a critically ill loved one, cope with a relative’s military mission, find safety from sexual assault and.” Stalking. ” or domestic violence, healing from their own serious illness or taking time to deal with the death of a loved one, “according to a draft published by the White House.
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Workers could earn up to $ 4,000 a month while on vacation, with at least two-thirds of their average weekly wage replaced. The low-wage workers would receive 80% of their previous income. Biden’s plan also provides that workers have three days of bereavement leave per year from year one. Grief was a major theme of Biden’s presidency. He often talked about losing his son Beau to brain cancer at the age of 46.
The President also called on Congress to pass a law requiring employers to give workers seven paid sick days a year.
Currently, companies with 50 or more employees are required to grant up to 12 weeks of unpaid time off thanks to the Family and Medical Leave Act of 1993. However, the United States is one of the few countries that does not guarantee workers paid time off when they have a new child or deal with an illness.
In Japan and Norway, new parents receive more than a year of paid leave.
Why is the US different from other countries? “We have had low taxes and a tight safety net in the past,” said Isabel Sawhill, senior fellow at the Brookings Institution.
For the same reason – corporate opposition – the US lacks universal health coverage, said Ruth Milkman, a sociologist and labor expert at the City University of New York.
“You are allergic to government intervention in the job market,” said Milkman.
The vast majority of American voters – around 80% – support the idea of a national paid vacation program.
But while Americans want access to paid family and sick leave, “a government program is not the solution,” said Rachel Greszler, research fellow at the Heritage Foundation.
“Most would much rather have flexible and accommodating guidelines from their employers than deal with government bureaucrats and the constraints of a unified government program,” Greszler said.
In the absence of a federal paid vacation policy, some states – including California, New Jersey, and Rhode Island – have implemented programs of their own to compensate workers who take time off.
As most workers are at the mercy of their employers’ policy, fewer than one in five have access to paid family or parental leave. Less than half of the paid leave is now offered. Access is even rarer among people of color and low-income workers.
“Too many people have been forced to make impossible choices between the incomes they need and the families they love because they don’t have paid vacations,” said Ruth Martin, senior vice president of the MomsRising community.
“It has become an even more devastating problem during the pandemic that has made millions sick, brought hospital stays to unprecedented levels and forced even more people to take time off to care for relatives with Covid-19,” Martin said.
By one estimate, the typical working-age adult will lose more than $ 9,500 after taking 12 weeks off without pay.
A national paid vacation program would likely be funded through payroll taxes, much like the unemployment system funded, Sawhill of the Brookings Institution said.
In shaping its policies, the federal government should learn lessons from states that offer paid vacation, said Linda Houser, a professor at Widener University.
“One of the many fascinating elements of the state’s paid vacation laws is how they’re paid,” said Houser. “Most of them are funded mainly through employee bonuses.
“In some cases, both employees and employers contribute,” she added. “As with other social security programs in the US and elsewhere, the idea is that everyone pays in.”
Another feature of the state programs that the federal government should investigate is how they have found a way to engage the growing numbers of freelancers, gig workers, and the self-employed, Milkman said.
“It’s pretty cheap, so the self-employed and gig workers choose to do it by just paying the tax, just like some do with Social Security,” Milkman said. “These programs are an insurance model.
“When you pay the tax, you can make a claim when an insured event such as a new baby occurs.”
While Republicans endorse certain paid vacation policies, they oppose Biden’s plan to collect taxes to fund the program. This could make such laws difficult to pass, although Democrats could also use the budget vote process to introduce paid vacation.
This avenue enables them to pass laws by simple majority, which is all they have. Other bills typically need 60 votes to move forward, thanks to Senate procedural rules. The next budget vote process is expected to take place in autumn.
“Paid leave certainly has an impact on the budget so it can go through the reconciliation process,” said Martin.