With Paid Leave, Gates Foundation Says There Can Be Too Much of a Good Thing
nytimes.com
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The company paying means the company has a strong incentive to minimize how much of it is used. They don't really receive any benefit for paying out leave, it costs them a lot, both financially and in terms of work done. It creates strong incentives to discriminate against people who might take the leave in hiring process, to subtly retaliate against people who take leave, and so on. (Yes, all those are illegal, but proving that a hiring manager is doing so is next to impossible in all but the most egregious cases)
The whole "people might not come back" thing is just another instance of the misaligned incentives. It's probably good for society if we have people raising their own children, but it's bad for the employer who is currently expected to pay leave.
We should take all of this entirely out of companies hands, run it through taxes and the government (leaving the general payout scheme unchanged). It would remove the worst of the misaligned incentives (now at least companies aren't paying someone who isn't producing value for them) and should come at minimal cost (you'd have to worry more about fraud, companies and people conspiring to get more leave than they are entitled to).
The relatively severity depends on the company and employee for sure. Software vs McDonalds...
Maternity leave has the advantage of a good amount of notice, which can give time to mitigate the loss from a missing employee.
I would rather take the selfishness of a corporation instead of the apathy and incompetence of a US government bureaucracy.
You literally did not read my comment. Please read it again.
...
I said I prefer a selfish corporation managing this instead of the incompetent US government.
I think this policy is entirely reasonable and entirely reasonable. The side effect is that there are often "matt-leave" openings at companies (i.e. covering for someone while they're away), which is a good way to get to know a job on a temporary basis and for employers to get to know a hire without a long term commitment.
Now, with the parental leave, when your expenses rise (diapers, formulas, cloths, ...) you're expected to make do on the same barebone salary replacement. I've experienced this myself quite recently: I had a choice to take parental leave and get a huge pay cut, or just burn through all accumulated vacation time and get back to work early.
Currently, Service Canada web site says that "maximum yearly insurable earnings amount is $53,100" - which cuts your income 3-4 fold you choose to stay at home. I think many high-earners (read: more that 53k) would rather choose to have more deductions throughout the year, but have 70-80-100% matched.
The biggest point that I try to make when describing the system is that it's not a government handout, it's just an extension of unemployment insurance.
The idea of increasing deductions to bring up EI values seems reasonable, although I imagine it could be a hard sell for men who never intend to use it (not saying that's a reason to not do it, however I'm sure there would be opposition). An opt-in system could be better, but then that kind of goes against the idea of insurance (you'd likely only opt in if you knew you'd be needing it and it'd be advantageous to do so). I guess the argument against the idea would be "just save your money instead" which would bring us right back to where we are today.
And its not necessarily employers. Its also employees. The right group to pay for paid leave is a group of 1: the parent itself.
I think there is useful societal value in having parents spend time with their kids, and I think that as a society we should absorb some of the costs to cause that to happen.
I can understand believing otherwise though - it falls back to a difference in fairly fundamental opinions about how society should function (I expect).
What I hope you can agree with is that if we are going to have paid parental leave, it should be paid for by a shared pool across companies (i.e. the government).
I think only if its mandatory this makes sense. But it's not (significantly) mandatory in the us.
Company Benefits have 2 economic advantages: the first is that employees might care for the benefit more than its cost, thus having less salary for the benefit. (an example might be google's plethora of in-company benefits). The second is purely taxes: high incomes get high income taxes, which means that you get a 30%+ margin on any inefficient cost a company takes.
Paid leave is a combination of distortions. In the non-salaried world, its not even a debate: people freely choose what to do and to what degree. Think about offering paid leave benefits to small businesses and see what happens to the government coffers!
> Think about offering paid leave benefits to small businesses and see what happens to the government coffers!
Nothing if it's funded properly. If you have, say, 5% of people taking paid leave, you tax everyone 5% of their salary and give that to the people on leave (roughly speaking). This is just a question or redistributing income not creating money out of thin air.
The reason I claim it is a very unfair situation, is because it offers a significant cushion to a particular class of people (parents), paid out of the taxes of everyone, and yet there are significant minorities of people falling through the cracks. For instance, due to a malfunctioning health-sector I've seen people who break a leg outside working hours get a significant paid leave, and yet people with job-caused mental illness (e.g. burnout) lose their job, and attain NEET status, with 0 state support (for the less fortunate, this is the road to homelessness and a whole lot of other problems). Of course, due to being low status groups, their are not in a position to negociate or lobby their interests to the law-makers. This is just an example, and I know the people disadvantaged by this policy are a small minority (single males for instance), but I think the state should provide equal opportunity to everyone, and for that reason, paying a certain subgroup of people with taxes taken from everyone is an unfair proposition in my book. (Of course, in this particular Eastern Bloc country, fairness is the least of worries, most state institutions are barely functional due to widespread corruption).
Of course, if you've got a population decline problem, like many of the European countries have, then incentivising birth is too good a solution to ignore.
But I still think the most fair/correct approach is having the employer pay for the leave, and factor that into wages/hiring. It's only fair to pay more/hire someone whose potential contribution/output is higher(although I know this is a sensitive topic that's become quite a taboo recently, I think around here people are more prone to think critically than the general public).
(Also here in Europe it's standard that the pay for parental leave is covered from the social budget making financial strain on companies marginal.)
[*] Or possibly future, if the employee does not have any more children.
For an individual, that might be the case. A mother who feels incentivized to drop out of the workforce due to childcare might later in life regret not having a career. A better balance of incentives that keeps someone working while ensuring childcare costs are taken care of (or at least subsidized) might make for a better outcome.
For society, well... who knows. You may believe that it's better for the kid to have a full-time parent in the home, but I don't think that's a settled argument with any degree of certainty. Certainly some amount of full-time parenting is great (some would say essential) for a kid, and lack of it can cause early development issues, but if -- just making up numbers here -- after 9 months, having a full-time parent only makes things 10% better for a kid vs. having a part-time parent and part-time third-party childcare, maybe that's okay?
I don't really believe either with any degree of certainty.
What I do believe, though, is that parents should be empowered and equipped to make that choice for themselves. Which I why I don't see the positive impact in a company putting more financial pressure on couples to pick one of those choices is a good thing.
Workers that are frequently sick are likely to be subsidized by other workers that are rarely sick. I'm not referring to pay, rather, to output. That's a form of subsidy. Does that mean there should be no sick pay and workers should come in sick? Of course not.
What is the alternative to vacation being a subsidy? A god given right? That's absurd. It's plainly a subsidy and one that is widely supported and liked.
Universal healthcare is a subsidy as well. Overwhelmingly the healthy subsidize the sick. The poor are subsidized by everyone else. It's nearly universally accepted as an approach to healthcare and yet it's definitely a system of subsidy.
Subsidy is not inherently evil. Civil society is filled with all sorts of contracts between peoples, including subsidies between classes and people in different situations.
It's not sustainable for a company that doesn't intend to stay in business for more than a generation. But for a multinational corporation the aging of both their consumers and especially of their workers is on the other hand pretty unsustainable. Just look at where Japan was in the late 1980s and where it is now, with no redress in sight.
So 95% of corporations?
Those are outliers and are not useful to talk about when discussing the economy as a whole.
"Life choices," moreover, don't happen in isolation. They happen within a broader social context. My wife and I basically have the same job--we're attorneys of similar seniority at corporate law firms. Over the years, she has faced so many more headwinds related to parenting than me. People stop my wife on the street to remark about how our 5 month old is dressed (warmly enough, etc.). I could stroll him down the street in nothing but a diaper in 40 degree weather and people would either offer to help or tell me how I'm such a good dad for not immediately ditching my family when he was born. (I'm joking but only a little bit.)
(One of the neat things about "Marvelous Mrs. Maisel" is that it shows how it was socially acceptable for rich people in the 1950s-1960s to completely delegate parenting. In 1965, 70% of kids were not breastfed even in the hospital. It's much more socially acceptable for women to work these days, but in some respects the expectations for "mothering" are much higher. Decisions about whether to return to work are made in the context of these differential social expectations.)
I imagine it is worse for women in some places, but plenty of people on the street are eager to share their opinions with parents in general. Not to mention those who just stick to frowning and shaking their heads without saying anything.
Back when he was a few months old, I was told on a regular basis by strangers that I was an ‘amazing’ father just for carrying him around, which is certainly something that mothers seldom encounter.
> One of the neat things about "Marvelous Mrs. Maisel" is that it shows how it was socially acceptable for rich people in the 1950s-1960s to completely delegate parenting
Judging from some of the raised-by-nannies-then-prep-school people I went to college with, this sometimes has mediocre results. YMMV.
The prep-school crowd could obviously afford to delegate the most, but if you are ages 30-60, it's highly likely you were formula fed, not worn around in a sling, babysat by the TV, etc. And everyone turned out fine. There was subsequently a reaction to that modern convenience which, in my view, is the modern equivalent of foot binding.
Your description more or less fits my parents (now ~70), though TV wasn’t anywhere near as pervasive during their childhood as a few decades later, and they spent tons of time outside as kids.
Whether “everyone” among my peers who were raised by screens turned out “fine” is debatable at best. Many of the kids of 2-parents-with-full-time-professional-jobs-and-not-much-time-for-family ended up with plenty of baggage and interpersonal problems. Not to mention chronic health problems caused by lifestyle, etc.
Of course, there has been plenty of shitty parenting (either coercive or neglectful) throughout history. New styles of shitty parenting are different than old ones, but it’s not clear they are “worse” per se.
* * *
From personal experience, the 2–3-year-olds I see who get more practice walking around town and running around on the playground (instead of being pushed in a little cart), playing with a wide variety of toys (instead of being kept away from the ones that say "age 3+"), engaging with adults (instead of handed over to a screen), working through their emotions with patient support (instead of having adults try to control their emotional responses), etc. are significantly ahead of their peers in strength, balance, agility, speed, hand-eye coordination, listening comprehension, speech, logical reasoning, emotional maturity, etc., even accounting for the inherent large variance of kids’ development. It’s not clear to me yet to what extent much school evens out those differences for older kids.
In my personal opinion, the biggest problems I see around town and on the playground are adults emotionally manipulating small kids and restricting their ability to direct their own attention, control their own actions, or deal with (minor) consequences. Some parents and nannies are real tyrants, and many others are pathologically overprotective.
Other stuff seems relatively minor. If parents need to feed their kids formula for whatever reason, or put them in daycare 9–5 out of financial necessity, or slather them in too much sunscreen, or dress them in gender-stereotyped clothes, or buy them too many commercialized movie-tie-in action figures, or give them too much candy at halloween, or don’t read to them for 2 hours per day, or .... I certainly won’t judge them.
This is complete bullshit, by the way.
But the question I am asking is, between a couple taking a year of leave and one (usually the woman) decides to become a full time parent vs. a couple takes 6 months leave to have a kid and both stay in the workforce. Why is the latter better than the former?
My first thought was that it would improve gender imbalance, but the article states that Gates Foundation employees are two thirds women. So that's out the window.
So the only other justifications require subscription to the belief that a woman who chooses to become a full time parent isn't as good a thing one that stays in the workforce. Sure, the latter improves a country's labor pool. But there's a lot of intangible benefits of having a full time parent. It seems kind of manipulative to cut workers' benefits and try and justify it because it makes more women keep working, when the evidence seems to be that many would have chosen differently if the benefits weren't cut.
I'm not sure how cutting parental leave eliminates pr reduced these headwinds. It seems to me that it's deliberately putting more financial pressure on women to tolerate those headwinds. Not eliminating those headwinds. Women's choice is strictly less with 6 months of paid leave as compared to 1 year. Women have the choice to take 6 months of leave instead of the full year (the article mentions that they use 77% on average).
It still seems like this is trying to justify limiting women's choices and benefits, because it makes more of them work.
Note that "reduced headwinds" isn't one of these. Countries with high rates of mothers in the workforce don't necessarily have more flexible gender roles. Sweden, Denmark, and Norway have the highest rates of working mothers, but have some of the strongest workplace segregation.
It's also a largely circular justification: more working mothers are better because their daughters are more likely to become working mothers. Again, this only functions as a justification for those that subscribe to the belief that working mothers are categorically better than non-working mothers.
My original point, from which we have diverged significantly by now, is that this article and many in this thread seem to believe that working mothers are categorically better than full time mothers. This seems to have led us to respond positively to measures that increase the former, even when those measures are coercive (in this case, cutting benefits and putting more financial burden on mothers).
I think the point may be that employer paid family leave is meant to help people make having a new child fit in with their career. If you are switching to full time parenthood you are quitting your job, not taking a leave from your job.
They aren't implying that working parents are better than full time parents, or more desirable to society. They are just saying that as employers they are designing their program around people who are going to remain employees.
While it's definitely a good thing to have parents spend as much time as possible with their family, the economy would be better served by having these parents back in the workforce while a lower-skilled person takes care of the children during the day.
I think the best way to have your cake and eat it too, in terms of overall economic productivity and parent-child bonding, is to subsidize childcare so that the economic incentive to stay home is removed. The choice to stay home would only be made with the consideration of the child in mind.
Here in New York for example, we pay $25k on daycare per child. Depending on the parent's individual salaries, the gains in income vs childcare expenses becomes marginal after 2-4 children.
That's also a good point to make in a parent's calculation as to whether or not going back to work makes sense. A member of my extended family decided she wouldn't go back to work for a while after giving birth (going on 3 years now), because a public school teacher's salary, minus childcare costs (while still a positive number), wasn't worth the extra hassle of dealing with work+childcare logistics. And that's just with one kid.
Which shows at least for Norway and Sweden women participation was on the increase for the study.
So maybe it's not the leave of 9+ months that's the problem, but that in combination with other factors?
A blanket statement that one year is too long, sounds like bullshit - when the listener is in one of the Scandinavian countries, anyway.
If you have 1 year off for parental leave, and probably months before and after to hand off work and take it back up, that would be almost half the job tenure on parental leave efforts.
That's rough for the company and the employee.
An employee with no interest in having children should also accrue parental leave, which can be cashed in in some manner. That keeps the system from being unfairly biased against people with no interest in having children.
The only alternative is to socialize the matter fully. Take the average salary from the prior N years and the government then pays for the parental leave out of taxes. That would also require all workers to pay into the system. One issue would be how to make it fair for people that never draw against that system. It would also take about five minutes before the first stories started showing up about how people earning $300,000 per year were being paid large sums by the government for parental leave. I suppose there could be an attempt to scale it based on pay as a percentage of income.
Entitlement systems are always fraught with edge cases though. Both of my parents died before they were able to draw social security, despite paying into the system for a combined ~70-80 years. That money was stolen from them by a flawed system.
People should get parental leave when they need it..
Is that really all you have to offer?
> So ppl should get children at 50, when they have acruued parental leave
The very obvious flaw in your "thats simply stupid" conclusion is incorrectly speculating on how fast I think parental leave should accrue. Why would it take decades to accrue? N months per year, then cap it at a reasonable maximum until or unless it's used, with the accrued time/value persisting (which could have benefits for grandparents, people that adopt at older ages, and so on).
Accrued Paid Paternity Leave, wouldnt work because of these reasons.
What if you get pregnant "by accident"?
What if you want to change jobs/company?
What if you get fired?
The rest of the world, solves this by having the leave not directly paid for by the employer, but by a fund. This also means that female employees, are more or less "risk free" for employers, as the leave, is not a direct expense.
This fund is paid into, by all employers, for about 43USD pr quarter pr Employee. (Danish figures). That small amount means 28 weeks of fully paid paternity leave for all. (After that, you get a smaller amount, based on sallary but capped)
In theory yes. However, if past politics as it relates to tax reg are any indication then it seems unlikely. Both marriage and children have an incentive at the federal level. Great for getting votes, but hardly fair and equal at the societal level.
I'm sorry about your parents, but that's how the system was intended to work. There are very few people who can save like they'll live to 120. Their livelihoods are going to be subsidized by who don't live as long under any system.
In Denmark Corporations pay a fee of about 43USD pr. quarter, pr. Employee, and then the found and the government, pay the paid leave for any employee.
There are many versions of parental leave in Denmark, but everyone has it from people working at mcdonalds to ceos.
That’s at least a much less serious limitation to job creation.
Especially "at least" 2 years. As in, 2 years was the minimum and maybe 5 would be better?
Does it (1) go undone, (2) do those not on leave have to do it in addition to their normal work, (3) do companies set their staff sizes so that they have extra capacity to take up slack from those on leave, or (4) do they hire temp workers to fill in until the person on leave comes back?
Therefore, it is more selfish to raise your child yourself than to have an expert to do it for you.
I shouldn't have to disclaim this by argument by saying that I'm not making a serious recommendation to anyone, but because parents are so defensive and irrational when it comes to how they raise their children, I feel that I must. I don't have kids and don't plan on having kids, so this is merely an intellectual exercise for me.
Choosing to procreate, period, is selfish. And yet we don't scorn people for taking that path.
Why is it that everyone leaves the invention of the birth control pill out of this conversation? It is likely more significant (in its effects on the world) than the invention of nuclear weapons.
The alternative is we end up with many more unwanted children, which I hope we agree isn't a good outcome either.
I'm ok with our nation as a melting pot, I think we end up stronger for it in the mix, but when you combine demographics with Ebenezer Scrooge capitalism it ends up with groups in nations on the tail of economic expansion are the ones who end up with expanded population.
But beware any unequal treatment of men and women with generous leave. It creates big incentives not to hire women of a certain age and family status. It's a lot harder to oppose discrimination when the discrimination is obviously rational and arguably not even wrong.
Imagine like, a CFO or specialist mechanic takes 2 years paid leave. What do you do? You hire a new CFO/mechanic. You can't function well without one, certainly not for 2 years.
Then when the paid-leaver returns, what do you do? Fire the person you hired to fill the gap? Have 2 CFOs or redundant mechanics on staff?
No surprise that even the most socially responsible companies in the US are skewed towards the extreme low end of parental leave allowance relative to other countries.
US employment law doesn't incentivise long term employment full stop, so little wonder some on here find it hard to understand why it is worth paying employees to come back.
Is it still better than formula if Mom drinks or has some health problem? Stuff passes into breast milk. If Mom takes an ibuprofen, into the breast milk it goes.
Can HIV pass through breast milk? No clear answer:
https://www.ncbi.nlm.nih.gov/pubmed/8826332
If you look at the scientific arguments about how breast milk is better, they revolve around hair-splitting. Like increased risk of necrotising enterocolitis in pre-term babies.
My thought for the original post was of an average healthy woman.
Ibuprofen is considered safe to take while breastfeeding. A brief web search didn’t turn up any concerning evidence (maybe you know of some?). There are some medicines which concentrate in breastmilk, but ibuprofen is not one of them.
Women who need certain prescription medicines, are undergoing chemotherapy, have HIV or certain other viral diseases, have had significant lead exposure, etc. are clearly warned not to breastfeed.
Mom has to drink alcohol extremely heavily on a regular basis to make a serious problem for a breastfeeding baby.
Alcohol content in breastmilk is roughly comparable to blood alcohol content. 3 drinks and it’s like 1 part in 1000. I wouldn’t advise breastfeeding women to drink several drinks at a time, but more for their own health than their infant’s – if mom loses motor control, becomes belligerent, starts making poor choices, etc. that isn’t great for her family. People in general should use alcohol sparingly, but new mothers don’t deserve any special scorn for drinking.
At worst, some studies suggest that babies drink less on average in a breastfeeding session immediately after the mother was drinking, presumably because the taste is strange.
The dangerous one for the baby is not a mother drinking while breastfeeding, but regular or heavy drinking during early pregnancy. The period of time when alcohol can have the most severe negative effects often comes before a woman realizes she is pregnant.
Mind you, that takes some coordination, but it's not impossible, is it?
How can you correctly price how much the time with your kid is worth if you get gifted money for inflating it?
The worst part of this debate is that its a constant pull between two players that understand the same policy in different ways: employees think they are getting free money, but in reality the employer distributes the cost from one employee to the others. (ie. if you have a budget for 10 employees, and you make employees 10% more expensive, now you get 9 employees).
So employees ask for something thinking its in their benefit, and employers are thinking "as long as the competition gets hurt as much as we do, we don't care".
And to add insult to injury, its the richest of the richest that get the longest paid leave benefits, longest pto, etc etc, mostly to reduce tax burden.
This is delusional or dangerous thinking. Are you an ultra privileged & sheltered young man? You do realise that even if a parent chooses to work, they have to pay someone for childcare?
> You do realise that even if a parent chooses to work, they have to pay someone for childcare?
That is an argument against paid leave: if a worker takes up the "nanny job" for their own son, they are capturing 100% of the value they do. No need to pay them twice for it.
The sheltered people in your life. Are they the ones that have mortgages?
Also, my bad - not sure where you live but it sounds horrifying. I can't believe there is somewhere in the world where people on 6 figure salaries are the only ones with access to basic employment benefits, and those less fortunate have no government provided safety net (now that sounds morally bankrupt to me).
I'm curious as well to find out if there are any people considered to be in the middle classes? Say...two full time earners taking in less than 6 figures, for instance? Is that a rarity in your country?
>im pretty sure you will find that most paid leave is taking by people that dont need it.
Not where I'm from, no. Most of the people I know that take paid leave are families where both parents need to continue to work to cover cost of living.
San Francisco, US.
It's interesting, how is it in other countries?
The Gates Foundation is a private entity, so they're free to make whatever HR decisions they see fit. Realistically, 6 months of paid leave is still very generous compared to what's legally mandated. And their justification for reducing it from 12 months makes sense when you look at it from their perspective. They have work to do, and it's disruptive to have new parents leave, and be paid to do work that is unrelated.
Which is exactly why it's a shared financial burden when you look at other countries with paid parental leave. The benefit of paying a parent to take care of a new child is not seen directly by the parent's employer. Instead, that benefit is seen by the rest of society, insofar as the child is properly taken care of.
I'm a new parent, my son just turned 5 months. My wife is taking 18 months of paid leave, since that's become an option here in Canada. It comes at a reduced payout rate (i.e the same money you'd get if you took 12 months, but spread out over 18 months), so my wife has not met another mom who has taken 18 months. Furthermore, our new budget is adding 5-8 weeks of secondary parental leave that is only available to the other caregiver/parent.
There is a lot to do when a new baby arrives. Realistically, even though I didn't take time off, my productivity dropped, since I did my best to help out as my wife adjusted and healed. Furthermore, there is a lot to do as our son grows, to ensure he grows and learns enough to enter the education system by age 4. To turn him into a productive, functioning adult is 18+ years of work. As a society, we're asking every parent to make a significant investment in our future.
Therefore, it makes much more sense to socialize the cost. Paid parental leave should be provided by the government, not (directly) by the employer. And that support shouldn't just end at some arbitrary age cutoff. Sure, an 18-month-old is much more developed than a newborn, but my wife and I cannot imagine putting our son into daycare at that age. Instead, we're asking our family to take care of him until he's 2 years old. Then he's going into daycare, which we have to pay for out of pocket. Oh sure, there are some tax breaks available, but even when you factor that in, my wife's salary barely covers the cost of daycare. His daycare will cost more than my engineering tuition + housing cost.
My point is that in Canada, we've socialized the cost of the first 12-18 months, given some tax breaks for the 18 months to 4 years point, and then finally, socialized the cost of education when the child enters school. There's a gap there that should be filled.
In short, private employers cannot be expected to bear these costs alone, which is why most countries socialize it. We all know the US is way behind on this, and kudos to the Gates Foundation for trying to do something for their employees.
But this move is shortsighted, but it's endemic of the shortsightedness of our society as a whole. We expect everyone to be well-adjusted, educated, and functioning members of society, but are unwilling to bear the costs of supporting parents in raising children. Then, we wring our hands wondering why certain kids/adults seem to be lagging behind.