Economy

Why Marco Rubio’s New Family Leave Plan May Only Help The Well-Off

CREDIT: AP Photo/Mark J. Terrill

Republican presidential candidate and Florida Senator Marco Rubio

With a paid family leave proposal released Friday morning, Republican presidential candidate and Florida Senator Marco Rubio became the first vying for his party’s nomination to offer such a plan.

Rubio’s proposal consists of a 25 percent non-refundable tax credit for employers who offer their employees between four and 12 weeks of paid family leave to new parents, those caring for sick family members, and the families of members of the military. Pay would be capped at $4,000 per employee per year, but it would apply to “all employee arrangements,” his plan says, including those working part time.

“Expanding access to paid family leave is part of Marco’s pro-family, pro-growth agenda,” the plan states. “The status quo too often forces workers — especially new mothers — to quit their job permanently when they need time away from it, making it harder to return to work one day.”

He’s the first Republican candidate of the 2016 election to take this issue head on. By contrast, Ted Cruz and Carly Fiorina have said they think the government should not play a role in mandating leave.

And he’s right that the current situation puts a financial strain on many families when a new baby arrives. The United States only guarantees 12 weeks of unpaid leave to qualifying employees, and a quarter of first-time mothers either had to quit or were let go when they had their babies. Rubio is also right that paid leave helps women reenter their jobs: women who take unpaid leave are more likely to end up in a different job, and paid leave has been shown to keep people in the labor force. The fact that the U.S. is virtually the only country that doesn’t mandate paid maternity leave means that we are being quickly outpaced by our developed peers in the share of women in the workforce.

But businesses are likely already aware of the benefits of offering paid family leave when it comes to employee retention. Those concrete benefits have not been enough to encourage a widespread adoption. Only 12 percent of American workers has access to the benefit at work. Just over a quarter of businesses say they offer it, a number that has barely budged over the last five years.

And there is a sharp income divide. Just 5 percent of the lowest-paid 25 percent of workers gets paid family leave, compared to 21 percent among the top 25 percent. All of the 30 top-rated companies for working mothers offer paid maternity leave and 90 percent offer paid paternity leave, but the benefits haven’t flowed further down the ladder to those who don’t work in white collar environments that offer generous benefits.

A tax credit may not be enough to encourage all employers to offer family leave, which could worsen that divide between high-earning employees who get paid time off and the low-wage workers who need it most to survive financially. That’s why Democratic candidates have endorsed a paid family leave mandate for the entire country. Hillary Clinton, Bernie Sanders, and Martin O’Malley all support 12 weeks of paid leave, paid for through an insurance-like system that collects payroll tax contributions from employees. Those plans mirror one proposed by Democrats in Congress, which would require a 0.2 percent contribution from employees and not require employers to pay employees on leave themselves.

Rubio’s support for any paid leave plan is still notable, however, given that Republicans used to stand in staunch opposition to the notion of even unpaid leave. Speaker John Boehner (R-OH) called the Family and Medical Leave Act, which today guarantees unpaid leave, “another example of yuppie empowerment” at the time that it was being debated.