Isabel: The public opinion polling suggests
the public, whether they’re Democrats or Republicans, are all in favor by large majorities of having
a paid leave policy. Aparna: Hi, I’m Aparna Mathur, and I’m a resident
scholar in economic policy studies at the American Enterprise Institute. And I’m really glad to have my co-director
from Brookings Isabel Sawhill. Isabel is a senior fellow at the Brookings
Institution, and we’ve both been working on what we call the AEI Brookings Paid Family
Leave project, which has involved people from multiple organizations, people with different
backgrounds, different perspectives, some of them have worked in Republican administrations,
some more on the Democrat side. This has been a year-long project. We’ve invited a diverse group of experts,
people from academia as well. And we’re really excited to be talking about
the issue which is the provision of a federal paid family leave policy in the United States. Isabel, I’m just gonna quickly turn to you,
and, you know, maybe you can talk a little bit about why we felt the need to bring together
this group of experts and why we need this policy in the U.S. Isabel: I think the main reason that the U.S.
needs a paid family leave policy is because we’re the only country in the advanced world
that doesn’t have such a policy right now. So if you are a young parent and you have
a new baby and you also have a job, you have no way, if you’re dependent upon your earnings
from work, to stay home with that baby. And so we think this is particularly a problem
for low-wage workers who can’t afford to give up the income, but who also need to be home
with a new baby. So that, I think, was the basic motivation
for this group’s work. And like you, Aparna, I’m really excited that
we got through this process with such a terrific group of people. And although we argued, and debated, and didn’t
always agree. Aparna: That’s right. Isabel: In the end, we got to a place where
we were able to find some common ground and make some recommendations. Aparna: That’s exactly right. And I think the other reason, you know, when
you look at sort of the changing demographics in the U.S. today, the fact that we have many
more mothers actively participating in the workforce, the fact that we have, you know,
the CEA did an interesting study, the Council of Economic Advisers did an interesting study,
saying nearly all of the middle income growth since the 1970s can be attributed to the increased
labor force participation of women and especially, you know, mothers with children. And so it’s really interesting to me that,
you know, we’re at a situation in the U.S. today where we’re still debating whether mothers
and, you know, fathers, should be able to take a few weeks off at the time of, you know,
having a child when we recognize the challenges that working families face in, you know, dealing
with work, having child care responsibilities at home. I think, you know, this is a policy whose,
as we say, in our report, whose time has come. Isabel: Yeah, let me just reinforce something
you just said because I think it’s so important and not well-understood. And that is this fact that if we care about
economic growth in the United States, if we think that we’re going to be able to raise
the growth rate from where it is now which is around 2% or a little bit under to something
like 3% or higher, the only way we’re gonna be able to do that is if we have more people
working. We’re an aging population. Therefore, labor force participation is falling
for that reason alone. The only bright spot in this picture in terms
of economic growth is the female labor force as you just said. And virtually, all of the growth in middle
class incomes in recent decades has been because more women were working. And now, we’re in a situation where if you
look at the U.S., and you look at how much women are working in the U.S., it’s going
down whereas it’s still going up in other countries that we compete with. Aparna: That’s absolutely true. And also talking about aging, well, I’m glad
you brought that in because I think we need to clarify why we focused on just parental
leave. And, you know, as you said, families have
a lot of responsibilities which is not just caregiving for children, but caregiving for,
you know, elderly parents or even, you know, the need to take time off for your own illness. And I think we need to make clear that we
are not sort of discounting those other reasons for leave. I think we, you know, as a group, we were
very clear that the reason we want to focus on parental leave is because we don’t have
enough data. We don’t have enough analysis of how we would
design a leave policy that covers not just parents, but also the need for leave other
reasons. But we hope to get into that over the course
of the next year. Isabel: Yeah, I think that it’s really again,
worth emphasizing that there are sort of three important reasons to take leave. One is birth or adoption of a baby, or even
adopting a child from foster care. But a second would be if you were sick yourself
for a long time period like if you had cancer, and a third would be if you had a family member
who needed your care. And it’s gonna be a lot cheaper in the long
run if we are able to take care of our own family members instead of putting them, let’s
say, in a nursing home that’s gonna cost a lot of money through Medicaid that’s gonna
be covered from taxpayer funds. Aparna: That’s exactly right. So having sort of, you know, spoken about
the need for different types of leave, I think it’s also important to highlight where the
U.S. is on this policy today, you know, in terms of the federal policy. As we said, there is no federal policy today
what we have is the Family and Medical Leave Act that was passed in 1993 that allows people
12 weeks of job protected, but unpaid leave for the reasons that you just mentioned. But we don’t have a federal paid leave policy,
and what we’re seeing is really a lot of state experimentation. So California was the state that had a leave
policy passed in 2004 that offered some types of paid leave. But even in those states, we’re not seeing
sort of really high take-up rates, and we’re seeing issues with people accessing that leave. And, you know, I think that’s worth mentioning. Isabel: So there are five states now, right? Aparna: That’s right. Isabel: There’s California, and New Jersey,
and Rhode Island and then two new ones very recent, the District of Columbia and New York,
who have all past paid leave policies at the state level. And two of the most generous, I guess, have
not gone into effect yet. This is gonna give us an opportunity to see
how well all of that works. Aparna: Right. And, you know, when you look at California,
I think…so we’ll get into our plan later. But I think the reason why, you know, people
are not that comfortable taking the six weeks of leave that comes with the California paid
leave program is that they say that it doesn’t come with job protection. Or, you know, the wage replacement rates are
really low. So California offers a 55% wage replacement
and people are, you know, especially low wage workers, are just not comfortable saying,
“Oh, I’m gonna go on for six weeks and accept a 50%, you know, or so wage replacement. So I think we’re seeing a lot of issues in
the state programs. And you’re right, you know, New York is going
to be fairly generous. And we have some worries about the cost estimates,
right? Like we are a little bit unclear on what that
means for the funding. Isabel: Yeah, let me say a word more about
cause. We did worry a lot about whether employers
are gonna be able to handle this. And we wanted to make sure that the costs
were not imposed directly on businesses. So this is not an employer mandate, and we’re
not expecting businesses to pay the cost. Instead, we’re talking about trying to have
a new payroll tax or a slight increase in existing payroll taxes to help families have
this leave when a baby comes. But there was a lot of concern in our group
about not burdening businesses with new costs and possibly reducing hiring. And you should say something about the gender
equality issue. Aparna: Oh, that’s a great thing. That’s right. I mean, so what we were absolutely emphatic
on in the working group, there were absolutely no disagreements on the issue that we need
to make this policy available to both mothers and fathers. I think, you know, we sometimes see even in
the way the private sector is doing it that, you know, the policies that are offered for
parental leave are longer weeks for mothers and, you know, slightly shorter weeks for
dads. And I think it’s about time we recognized
that dads play an extremely important role in the household in those initial weeks of
bonding with the child of being there to provide childcare. So I think it’s important to make the policy
gender-neutral, and it’s also important for economic reasons which is we don’t want businesses
to discriminate against women. We don’t want businesses to say, “Oh, we know
this woman is going to be taking, you know, the six or eight weeks that’s coming through
the parental paid leave policy so, you know, why should we hire her?” And I think that’s worth pointing out. You know, those are all the discussions we
had about why we don’t want an employer mandate and why we want the policy to be gender-neutral. So let’s talk a little bit about our compromise
plan that we offer. Isabel: Right. Again, we were both really excited, I think,
that we were able to get to a final compromised plan. Now, I should say, as you know, that not everybody
loves this plan. Aparna: Absolutely. Isabel: People from both the right and the
left were a little unhappy about some aspects of it. But they all signed on and they all were reasonably
enthusiastic in the end. Aparna: That’s right. Isabel: And what the plan said was that we
should provide eight weeks of paid leave to new parents either moms or dads. That secondly, we should replace the wage,
the normal wage that you would earn at a rate of 70%, that we should cap it at $600 a week. That means that if you are a much higher income
worker, the proportion of your earnings is gonna be replaced, is gonna be much smaller
because of the gap. Aparna: That’s right. Isabel: So it’s progressive, but that reflected
the fact that we wanted to make it somewhat progressive, somewhat targeted to lower-income
workers. Interestingly enough, the conservatives in
our group they wanted a new means-tested program for this purpose. And the more liberal colleagues that we had,
they were in favor of a longer leave and funded in a little different way. But in the end, we said it should be financed
by some combination of a payroll tax on employees, on workers, not employers. And also, some reduction in current programs
in the federal budget. Aparna: That’s right. Isabel: As long as those programs weren’t
already helping low-income families, we didn’t see any point in reducing some programs for
low-income families in order to create this new paid leave policy. Aparna: That’s great, yeah. I mean, it was a really fun discussion, you
know, a lot of disagreements on how we designed this. And I think that speaks to sort of the political
climate we’re seeing in the U.S. today on these and the diversity of opinions on this
issue. You know, you have Republicans who are in
favor of a much, you know, much more targeted relatively inexpensive plan. And then we have, you know, the Family Act
and other sort of more Democratic ideas, which offer much more generous weeks of leave. And I think, you know, one of the reasons
why this compromise sort of made sense, I think to both sides, was, as you said, on
the funding. Yes, we need a payroll tax hike because we’re
talking about a new program. But at the same time, we don’t want to increase
debts and deficits. We recognize that, you know, the U.S. faces
a fiscal imbalance, and we need to be conscientious, and we need to be careful about any new spending
program. So we do talk about, you know, cutting spending
and making the entire plan budget mutual. Isabel: Right. Aparna: So I think that’s what [crosstalk
00:12:57] Isabel: If I were a Conservative, what I would
be arguing right now, is this makes a lot of sense. But if we’re gonna add a new, it might be
viewed as a new entitlement program for parents, we need to cut back on entitlement somewhere
else in the system. Now, it’s interesting when President Trump
was campaigning, he was in favor of doing this through the unemployment insurance system. And the proposal that he put forward would
require either raising unemployment insurance taxes or reducing benefits. Interestingly enough, and you may wanna say
more about this, we went over, and we were invited over to the west wing of the White
House to brief Ivanka Trump who, of course, is the big champion of paid leave. And she looked at our report, and she seemed
to really like it. She also said that they were open to other
ways of doing this. Aparna: Yeah, I think that was a really exciting
development for us because I think, you know, there’s been so much discussion about the
Trump campaign idea about how to fund paid leave through state unemployment insurance. I know we had a big discussion about it in
our working group. There are lots of concerns about trying to
do it at the state level, you know, does that mean higher payroll taxes on employers? You know, what about eligibility? What about benefits? And so there’s a big concern about trying
to shift the burden onto the states. And so it was really nice to have that meeting
at the White House to have them read our report carefully and say, “Yeah, you know, this is
fantastic.” And in so many ways, it’s sort of trying to
get that common ground from the Republican or the Democratic side of the conservative
and the liberal side. And yes, this is, you know, a policy that
probably will help to get that conversation started. So that was really exciting for our group,
and I think it speaks well about the report that we managed to, as you said, despite all
the disagreements, get people to come together on this platform. So where do we think this is heading, you
know? Isabel: Yeah, that’s the big question. And everybody asked us this question, you
know, where is it heading, and are we gonna have legislation this year? And as much as I would like us to make progress
on this, I can’t say I’m terribly optimistic right now about legislation this year given
everything else that’s on the agenda and all the difficulties the Congress is having with
their priorities on tax cuts and health care and so forth. But I think the good news here is the issue
is very much in the public domain now. It’s on the radar. The public opinion polling in favor of it
suggests the public whether they’re Democrats or Republicans are all in favor by large majorities,
of having a paid leave policy. So that’s the good news here, and we can find
the right window, I hope, to get this actually enacted. Aparna: That’s exactly right. And I think that also gives us time to sort
of get into the details as we said, of other types of leave. Because, you know, you probably would have
more people sign on to such a policy if you said, you know, “This is not just about parental
leave, this is about the need for leave for you when you need to take time off for your
own illness, for you when you need to take time off for your parents.” I think, you know, right now, sometimes the
pushback that we get is why should I be paying for someone else to have a child, right? And I think over the course of the next year,
we definitely want to expand this proposal to include other types of leave at least get
on the same page about what that might mean for a federal policy. So we’re really optimistic we hope to do much
more on this over the course of the next year. And, you know, let’s see how this plays out
on the political level. But thank you so much, Bel, for coming here. We hope to continue this conversation with
you, and it’s been great having you as a co-director specially. Isabel: Aparna, it’s been my pleasure, and
it’s been really great to work with you. And I think this partnership between Brookings
and AEI is a real role model for people going forward. Thank you. Aparna: Hey, everyone. That’s the end of our discussion with Isabel
Sawhill. Thank you so much for watching. As always, let us know what other topics you
would like AEI Scholars to cover on viewpoint. And to see a full report on paid family leave,
check the links in the description below. Thank you.