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How Obama’s Budget Helps Working Women And Their Families

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"How Obama’s Budget Helps Working Women And Their Families"

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Our guest blogger is Sarah Glynn, a policy analyst at the Center for American Progress.

President Obama submitted his budget for fiscal year 2013 to Congress this morning, with the explicit goal of “rebuild(ing) our economy and strengthen(ing) the middle class.” The $3.8 trillion budget includes $5 million to help individual states launch paid leave programs – similar to those in California and New Jersey – that allow workers to take paid time off from work to provide care to a new child or ailing family member.

While some have argued that government intervention into work-family policies will only increase the cost of employing women, and that the marketplace will respond by voluntarily providing policies in order to retain valuable employees, the evidence does not support these arguments. At present, there are huge gaps in access to maternity leave for working women. According to the U.S. Census Bureau, between 2006 and 2008 about two-thirds of mothers with a bachelor’s degree or higher received paid maternity leave, but only 18.5 percent of those with less than a high school degree did. New mothers who have access to paid maternity leave are more likely to return to their previous employer, and 97.6 percent of those who return to the same employer do so at their previous pay level or higher. When women have to change employers after giving birth, often times because they are forced to quit or are fired in the absence of paid maternity leave, more than 30 percent experience a drop in pay.

New research on California’s Family Disability Insurance program illustrates how offering paid leave to women after childbirth helps individual workers and the economy as a whole. California’s program was passed in 2002, and became available to workers in July of 2004. Paid leave is administered through the State Disability Insurance program, and is funded through payroll taxes on employees. Eligible workers in California who take leave receive 55 percent of their regular pay, up to a maximum of $928 per week, for up to 6 weeks to bond with a new child or to care for a seriously ill family member.

California’s program has increased both job retention and the number of hours worked by employed mothers. More than 95 percent of workers who took leave in 2009 and 2010 returned to work; 80 percent returned to the same employer. Workers who made $20 an hour, meanwhile, returned to the same employer 83 percent of the time. And according to researchers from the University of Virginia and Columbia University, paid leave increased hours worked by mothers six to nine percent.

Working mothers are often the ones keeping their families afloat. The typical working wife now brings home 42.2 percent of her family’s earnings, and while married families with a male breadwinner and a female homemaker haven’t seen incomes rise since the 1970s (when adjusted for inflation), families with a working wife have seen incomes grow by 30 percent. Families where wives work, work longer hours, and receive higher pay are thus more likely to maintain their position on the income ladder or move up.

If every woman in America had access to paid leave when she had a baby, estimates are that this would increase employment by approximately 40,000 new mothers each year. Imagine how many families that would help raise up into the middle class, or secure their foothold there. If we are serious about repairing the economy, we must remember that a rebuilding a strong middle class is not just about helping the unemployed find work, but also about helping workers keep the jobs they already have. Paid family leave is one policy that can help us meet those goals.

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