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Business School Faculty Call for National Paid Family Leave

Emily Crockett

In what paid leave advocates called an unprecedented move, more than 200 business school faculty members from 88 leading institutions signed a letter urging Congress to pass national paid family leave.

More than 200 business school faculty members from 88 leading institutions signed a letter urging Congress to pass national paid family leave in what paid leave advocates called an unprecedented move.

“For the sake of both the business leaders and professionals we teach and the workforces they will direct, it is well past time for a national paid leave policy,” the letter reads.

The faculty members who signed the letter want to see Congress pass the FAMILY Act (Family and Medical Insurance Leave Act), sponsored by Sen. Kirsten Gillibrand (D-NY).

That bill would guarantee all workers two-thirds of their earnings for up to 12 weeks in order to care for a new child, or to deal with their own or a family member’s serious health condition. Funds for the program would come from a 0.4 percent payroll tax, split between employers and employees.

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It’s a “small, well-distributed” cost that’s absolutely worth the benefit, according to Stewart Friedman, director of the Work/Life Integration Project at the Wharton School of the University of Pennsylvania, who spearheaded the letter effort and spoke to reporters on a Tuesday press call with other professors and advocates. On that call, it was estimated that funds for the program would max out at about $250 per employee per year.

It’s important for business leaders to talk more about the benefits of paid leave, Friedman said, because some business interests still have a “knee-jerk” negative reaction to any potential new tax.

“The evidence we see is that [paid leave] is good not just for families and for parents and for children, it’s good for business,” Friedman said. “The evidence that we have shows that when you invest in the whole person, when you provide the kind of supports that we’re talking about here, what you get in return is loyalty and commitment and engagement.”

The FAMILY Act is inspired by similar measures in California, New Jersey, and Rhode Island that have so far proven successful, with the vast majority of businesses either happy about the change or reporting that it didn’t affect them one way or the other. Paid leave policies tend to save money in part because they reduce employee turnover, which reduces hiring and training costs.

Passing paid leave would also make the United States look less like “Neanderthals” in comparison to other developed countries, all of which support families with some kind of national paid leave, Friedman said. Though 13 percent of American workers have access to paid family leave through their employers, many people don’t qualify even for unpaid time off through the Family and Medical Leave Act (FMLA), and many of those who do qualify for FMLA don’t use the benefit because they can’t afford to go without a paycheck.

Friedman said there has been a “radical” cultural shift on paid leave in the last 30 years, with both men and women calling for more flexibility on the job so that they can be better parents who take on more equitable caregiving roles.

This is fueling a shift in corporate culture, Friedman said, and some tech companies have been “falling over each other” in recent months to offer more generous benefits and attract the best talent.

But this cultural shift only benefits some workers, mostly white-collar ones. Low-income working mothers of color, for instance, are hit particularly hard by lack of paid leave.

“The many, many other employees who are not MBA graduates are often the ones who really suffer because of the lack of a required [paid leave] standard in the country,” said Amy Edmondson, who teaches leadership and management at Harvard Business School.

The FAMILY Act would create a “floor” that protects all employees at a basic level and sets an example for more widespread changes, Edmondson said. That includes cultural changes where taking family leave is seen as typical and not a “weakness.”

“The sad reality is that there will always be employers who refuse to establish supportive policies and states that fail to create their own programs,” Vicki Shabo, vice president at the National Partnership for Women and Families, said in a statement. “That is why a national standard is so important.”

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