Let’s Not Take Leave of Our Senses
Author: Michael Saltsman
Publication Date: February 2013
Newspaper: Boston Herald
Topics: Paid Sick Leave
Flu season has activists from the Massachusetts Paid Leave Coalition working overtime to ensure that they don’t miss a golden chance to argue for a statewide mandatory sick leave law. They’re supported by Reps. Kay Khan (D-Newton) and Jason Lewis (D-Winchester), who last month filed a bill that would grant this new benefit to most Massachusetts employees.
Before rushing ahead with a new mandate, policy makers should consider the evidence from their neighbors in Connecticut, which last year because the first state in the nation to mandate paid sick time.
A new report from the Employment Policies Institute finds that, since the law took effect in January 2012, some Connecticut businesses have taken — or plan to take — cost-cutting measures to adapt to the law, including a reduction in employee benefits, hours, wages, and even jobs.
The employment institute began surveying Connecticut’s employers in April 2012, with technical assistance from state business and restaurant associations. More than 150 businesses participated in the study, and several businesses agreed to in-depth follow-up interviews.
Some of the surveyed employers reduced costs prior to the law’s implementation. For instance, 31 of the businesses surveyed had scaled back on employee benefits or reduced paid leave (or both) to account for the cost of the new law. Twelve had cut back employee hours, and another six reduced employee wages. There were even six businesses that laid off employees.
Perhaps most concerning for economic development experts — in both Hartford and Boston — are the 16 businesses that decided to limit or restrict their expansion within the state as a consequence of the law.
Employers weren’t just preparing for the law, they were anticipating how to run their business after the law took effect. For example, 38 businesses said they were likely or highly likely to hire fewer people as a consequence. Thirty-five businesses were planning to offer fewer raises, and 38 said they would likely increase the cost of other benefits, including health insurance.
Overall, about 70 percent of the businesses surveyed ended up responding that the paid sick leave law was not good for their business.
This study isn’t representative of every employer’s experience, of course, and further study will be needed to pass final judgment on the law and its consequences. But this first look suggests that the “everybody benefits” rhetoric used by the supporters of paid sick laws is misleading at best and outright false at worst.
Unfortunately, the Mass. Paid Leave Coalition has so far shown little interest in engaging in a serious conversation about the law’s potential consequences. Instead, they’ve attempted to demonize local businesses with loud rallies that demonstrate their ignorance. (Witness their protest of “corporate greed” at a Dunkin’ Donuts shop, where activists apparently forgot to research the fact that Dunkin’ Donuts locations are almost all owned by franchisees.)
Policy makers should ignore the noise and look instead at their neighbor state’s experience with mandatory paid sick leave before they continue down a path toward another new mandate.
Michael Saltsman is the research director at the Employment Policies Institute.