Sick over sick leave
Sen Ted Kennedy is introducing legislation requiring employers to give part and full-time workers up to one week paid sick leave. This is a tough one philosophically, I get that staying home with a child is crucial. However, when Sen Kennedy says,
"As members of Congress, we don't lose our pay or risk our jobs if we stay home because of illness.He's right, as "members of Congress," which also means, "since we're not employees of a real business." See, Congress never faces a revenue shortfall, nor does it ever face the problem of too many expenses, going out of business, not being able to produce as much because someone's out, etc. You simply cannot compare Congress to business, especially small business.
I fully get that a large percentage of working American's work paycheck to paycheck, and that missing even one lands them in financial dire straights. But I also know that more than half of all businesses fail in the first year, and that the attrition rate in the first five is horrible. Contrary to popular belief, small business' fears and concerns largely mimic employee fears and concerns. A bad revenue period can kill a business, just as losing a paycheck or two can wreck an employee's life. While sick leave is a real problem, I'm not sure that there is much the Government can do. Pushing the expense to employers, by mandate, only means that more businesses will fail, or that the reward for the risk of starting them goes down enough to slow growth, and setting arbitrary numbers, like "less than 15 employees, just means that business will slow down employee hiring to avoid a massive new expense, which only hurts employees. All of these outcomes put even more pressure on employees (less substitution, less hope, etc). If the goal is to help, you have to think through ramifications, not just do what feels good and look away.
There is a problem with sick leave in this country, but when Senator Kennedy compares his experience working in Congress to the problems with low wage employees working for small businesses, I think he's going to do more harm than good. His reference base is just a fantasy for most employees and employers.
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2 comments:
Couldn't the same arguments be made against a living wage? What is the true cost to businesses that give paid sick leave? Is the immediate cost counteracted by a more loyal workforce?
Like everything else, it depends. A government mandated living wage is nothing but an expense for businesses with no upside. There are two types of business minds. The "keep expenses down period" crowd, and the "Run the best business" crowd. The latter will pay more, offer more benefits, and expect lower retraining costs, lower gaps in production/work capability, higher quality workers and product, and higher margins. While the former will always pay the lowest possible wage, ignoring retraining, quality of employee, quality of product, etc and wonder why they are getting beat by the latter.
In a free market the "good business" crowd will expect higher loyalty. In a government mandated living wage/sick leave environment, since all employers must provide these services, there is no loyalty from the worker because there is no real variance in offers. Think of it as a consumer. If a product has a "lifetime warranty" that separates that product from the others in its class, and may instill loyalty to that brand from you, the buyer. However, if the Feds mandated that ALL products in that category have a "lifetime warranty," then having one will instill no benefit, nor will it instill any additional loyalty form the consumer. All it is at that point, is additional expense iwth no upside to the producer. Sure, the "good business" crowd can increase their package (no, not that one Stalin), but at each level it gets more expensive and there is less room in the both the ability to increase the price of the product and in the operational margins.
Plus, not all businesses have any room in their budgets for even modest cost increases. Again, businesses fail every day. Opening your own business is not an automatic ticket to the plush life, in fact, more often than not (statistically) you will fail.
Again, I respect Sen Kennedy's awareness and empathy for working Americans, however I do not respect his awareness and empathy for small business owners, and they're American's too.
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