A decade after bonus-chasing executives like Angelo Mozilo crashed the economy, we need tax incentives to push companies to narrow the gaps between CEO and worker pay.
Narrowing the Paid Leave Divide
A pet salon owner in Washington, D.C. helped win one of the country's most generous family and medical leave plans.
Blogging Our Great Divide
January 05, 2017
Being able to take time off when you’re sick or need to care for a new child or sick parent shouldn’t be a luxury enjoyed only by those who are financially well off. And yet while paid family and medical leave is standard for most white collar employees, low-wage U.S. workers who are most in need of such benefits are typically denied them.
Activists in Washington, D.C. recently overcame stiff opposition from corporate lobbyists to win one of the country’s most generous paid leave policies. The law guarantees eight weeks of paid time off for new parents, six weeks for those caring for sick family members, and two weeks of personal sick time.
Small businesses were key to this victory. The coalition behind the new law published a list of more than 80 business supporters and encouraged residents to patronize these local firms. One business leader who became very active in the fight is Ethel Taylor, the owner of a local pet grooming parlor called the Doggie Washerette.
Taylor said she first got involved when an activist with the Main Street Alliance was going door to door down D.C.’s Georgia Avenue, talking to business leaders about the paid leave plan. Affiliated with People’s Action, the Alliance works to ensure that small business leaders have a voice in public policy.
Key to Taylor’s support was the novel mechanism for paying for the paid leave benefits. The D.C. law will use a “social insurance model” funded through a 0.62 percent payroll tax on all private sector employers. “I would’ve been gone tomorrow if I’d had to pay out of pocket for the cost of an employee’s leave time,” Taylor said in an interview. The payroll tax will amount to just $186 per year for an employee making $30,000.
The compensation employees will receive during their leave is exceptionally generous compared to other cities and the four states that have paid leave policies. The District government will reimburse employees for 90 percent of their first $900 in weekly pay and 50 percent of their remaining weekly pay, with a limit of $1,000 per week. By comparison, private sector employees in California can receive only up to 55 percent of their wages, which makes it difficult for some low-wage workers to take advantage of the program.
The coalition behind the plan points out that the rather complicated formula for reimbursement is designed to help reduce racial and economic disparities in the District. The lower an employee’s weekly pay, the higher proportion of that pay he or she will receive.
Other than taking her beautiful Standard Poodle, Joy, to campaign events for candidates she supported, this was Taylor’s first time becoming deeply involved in a political issue. One reason for her motivation was that her own family had been hit hard by a lack of paid leave benefits. After her husband was diagnosed with cancer over a year ago, she had to take a lot of time off without compensation. Under the new D.C. law, business owners like Taylor can also tap into the paid leave fund.
But Taylor’s commitment went beyond her own personal situation. “I’d always been active in my neighborhood of Shepherd Park. But when I opened the Doggie Washerette there five years ago, I felt a whole other level of responsibility to serve the public.”
Working with the Main Street Alliance, Taylor attended public meetings, penned a commentary in support of the paid leave law in The Hill, and did other media interviews, including in the Afro American. The new legislation, adopted on December 20, will cover everyone working in the District for a private sector employer — whether a for-profit or non-profit — including the self-employed.
Given the new political landscape at the federal level, most of the action in the near future to pass family-friendly work policies will be happening at the city and state levels. D.C.’s successful campaign for comprehensive paid leave, in particular the involvement of small business leaders, offers important lessons for other communities.
Sarah Anderson directs the Global Economy Project and co-edits Inequality.org at the Institute for Policy Studies.