As the topic of paid leave moves in and out of the news, it rarely receives the attention it warrants. With the changing landscape of the needs of families, the definition of what constitutes a family, and the rapidly increasing number of older people needing care, American companies and governments must face the reality that paid leave is becoming a necessity for American workers. Workers of all ages and levels of employment are caught in the dilemma of whether to work or care for a loved one. This situation creates all sorts of emotional and financial difficulties for Americans distracting them from their ability to work and be productive citizens. Fundamentally, the situation boils down to a moral imperative where we as a society decide which is more important, the well-being of each of us as individuals or the well-being of the companies for whom we work. Ultimately, the well-being of the individual drives the well-being of the company, but present leadership does not always take the long view and maintains the status quo of granting unpaid leave or none at all. Those paying attention to trends though, know that the time to pay the price for neglecting this issue is at hand.
Carol Harnett, a disability insurance specialist and Human Resources professional, speaks to the issues and trends we can anticipate in an interview I conducted with her in September. Harnett theorizes that trends in both family make-up and our aging population make it imperative that companies begin offering paid leave on a regular basis in order to keep their employees happy and their companies thriving. She noted that the first changes with regard to paid leave started in the 1990’s when the Family Medical Leave Act (FMLA) went into effect. While FMLA does not offer paid leave, it was a first step in guaranteeing that workers could take up to 12 weeks off without fear of losing their job. Although it is a step in the right direction, presently only 57% of American workers qualify for FMLA. Harnett says that “FMLA was a good start, but when more than 50% of people despite their socio-economic status live paycheck to paycheck (because many people live to their paycheck even if they make a lot of money), it helped, but it didn’t help, it was a little unrealistic.” Harnett believes that if more employers had offered more short-term disability coverage to cover the needs of employees, it would not have become a big enough issue because then workers would have had some guaranteed income. She went onto say, “Employers made some missteps. They did not anticipate the cultural changes that were happening. They were lagging instead of watching and going ‘this is an increasing trend we are seeing. We’d better figure out how to deal with this.’”
Changes in family make-up
American families are changing every decade in terms of who lives in a household and is considered family. A 2014 poll by The Pew Research Center found that the number of children living in two-parent families had decreased from 87% in 1960 to 69% in 2014. They also found that marriage and childbearing are no longer necessarily linked with only 5% of children born outside marriage in 1960 increasing to 40% in the mid-2000s. Because fewer couples with children are married, the rules regarding whom you can use FMLA leave to care for do not always apply. FMLA allows people to take leave to care for themselves, a parent (no in-laws), or a son or daughter under 18 years of age or a child with a disability who is older. This means that the members of an unmarried couple cannot take FMLA leave to care for one another. Now, due to the scourge of the opioid epidemic, many grandparents are taking care of grandchildren with no FMLA protection or funds from the foster care system.
Additionally, as we have become more mobile and no longer have the family support ecosystem of earlier decades, paid leave is becoming a necessity rather than a nicety. Family circles are changing drastically. Whom you consider family is changing rapidly as well. By necessity, people are broadening their definition of whom they consider family when they are far away from their biological families or no longer have family members who can help. The demographics of who constitutes a family is shifting, and our laws and support systems must adjust to the ways that we define family members for the purposes of care.
Our Aging Society
Caregiving for older family members has become an increasingly larger issue and will only continue to grow as the baby boomer generation ages. Grandparents, siblings, and non-blood relatives are increasingly needing care. According to the American Society on Aging, “ We already know that the 45- to 64-year-old population will grow only 1 percent between 2010 and 2030, while the age 80 and older baby boomer population increases by 79 percent. As the age 80 and older baby boomer cohort grows, the number of family caregivers available to assist them drops dramatically, from 7.5 in 2010 to 2.9 in 2050, a more than 50 percent decline. Alarm bells have been going off and researchers and advocates have been busy estimating the impact on the long-term-care system.” Additionally, baby boomers have not been good at saving for their retirement and the financial burden will fall on their children. This leaves us in a situation where there are half as many family members available to give care with fewer financial resources.
As health insurance providers allow less and less time in medical facilities, family caregivers are now expected to perform many medical and nursing tasks at home. For example, administering injections and caring for wounds are common at-home tasks. Family members receive little training or support in performing these tasks. According to AARP, “As health care and long term services and supports (LTSS) shift from institutional to home-based care, the burdens on family caregivers will likely increase without adequate supportive services for caregiving.“ We are quickly coming to a point where the demographic shift requires a comprehensive policy for long term services and supports for both the older persons needing care and the family and friends providing the caregiving. If we do not get ahead of this crisis in caregiving, we will see the results in loss of employment and many more people facing bankruptcy as they have to choose between caregiving and work. Employers, as well, will find that they cannot keep employees because many will need to leave for caregiving purposes. As Harnett has been speaking about this issue nationally for a number of years, she has encouraged employers to improve their employee’s financial wellness by offering a no-interest loan program or a slush fund when they are encountering big caregiving expenses. The alternative is that people go to payday lenders which are known for incredibly high-interest rates and predatory practices.
Harnett also noted that the tremendous financial burden is about $10K-30K/year on caregiving and lasts about 5 years. In her own family situation, Harnett paid $80K toward her own mother’s care even though her parents were dutiful savers. It just turned out that both parents needed extended, expensive care. When 40% of Americans cannot make an unexpected $400 payment, we know that most cannot afford the caregiving fees without employer support.
The good news is that some states and Washington, D.C. have already stepped up and passed mandatory paid leave laws while others are in the process of doing so. While the exact amount of leave and percentage of salary paid varies, most provide at least six weeks of leave and expand the number of people who can be considered family members to include domestic partners, in-laws, and grandparents. In June, Connecticut passed an even more generous paid family leave law that includes twelve weeks of paid leave and anyone whose “close association whether by blood or affinity, is equal to that of a family member.” All of these laws are funded by a payroll deduction of anywhere from .08% to 1.2%.
Harnett also mentioned that some larger companies are leading the way with generous paid leave packages. One example she gave was MassMutual. The company decided to revamp its paid leave program to include all employees from their first day of employment. They included paid absence, caregiving, maternity, and parental leave, and bereavement leave. In 2018, Microsoft informed their suppliers that in order to do business with them, the suppliers must provide their employees with both paid leave and family leave. These are just two examples of large companies taking the lead in extending paid leave.
While we are a long way from having everyone covered with paid leave of any type in the United States, the changing demographics and family needs will force this issue. Popular opinion is also moving toward paid leave policies. Pew Research Center completed a recent survey about paid leave in America and found that Americans are overall in support of paid leave. 85% believe that you should have paid leave for your own health condition, 82% agree for the birth of a child, 69% agree the non-birth parent should receive paid leave, and 67% agreed that paid leave is necessary when caring for someone other than a child. However, Americans were split as to whether the government or the employer should pay for the leave. Whichever solution we end up using to fund paid leave, there is no question that paid leave is a necessity in our economy, and the time has come to take serious action.