Wednesday, October 29, 2008

Why Paid Sick Days Is A Sound Economic Development Measure


As academic researchers on economic development and workplace productivity, we urge Milwaukeeans to vote YES on the city’s sick leave referendum.

Milwaukee has the seventh highest poverty rate in the nation, a 51% African American male jobless rate and the largest racial disparities in unemployment and poverty in the country. 43% of the city’s workers earn less than $20,000 a year and many are among the 122,230 Milwaukeeans (47% of the private workforce) who do not have paid sick days.

In this economic context, everyone agrees that Milwaukee needs more family-supporting jobs. Yet, employment that lacks paid sick days forces employees to choose between their jobs and caring for their families. A job that does not provide employees with paid sick days so they can care for their families is not a family-supporting job.

The lack of paid sick days hampers economic development in Milwaukee in myriad ways:

• It costs workers job stability, as employees who become too ill to work or who take off to care for a sick child or parent are frequently fired;

• It costs companies in workplace stability and productivity, in turnover, training, and absenteeism, and health care expenses;

• It contributes to Milwaukee’s high rates of student absenteeism as older siblings stay home to care for their sick younger brothers and sisters because their parents are denied that right;

• It creates public health obstacles to workplace productivity, forcing sick employees with contagious diseases to work.

Opponents say mandatory paid sick days are a worthy objective but not economically viable. Some have even invoked the possibility of recession as a reason to oppose improving our city’s workplaces.

But these opponents simply offer the same discredited methodology and arguments that backward employers and their academic apologists have used throughout history in opposing child labor laws, the minimum wage, workers compensation, clean air and water regulations and virtually every other labor standard this nation has adopted. In every case the opposition characterized the new labor or community standard as a job killer. And in every case, after the standard was established, the business community adapted, the economy grew and our country, its workers and their families were better for it.

In the 1990’s business lobbyists used the very same arguments now being used against paid sick days to oppose raising the minimum wage. But after states and even cities raised their wages above the national minimum, economists found that the chicken little scenarios of the opponents did not occur: that incremental increases in the minimum wage did not increase unemployment or cause minimum wage paying firms to lay people off.

Facing similar dire warnings, San Francisco enacted a paid sick leave ordinance in 2007. However, despite an economic downturn affecting all counties in the Bay Area, San Francisco maintained a competitive job growth rate that exceeded the average rate of nearby counties.

Internationally, of the twenty most competitive economies, only the United States does not guarantee its workers paid sick leave.

Economies and firms can try to compete on price and cost. But in world where two billion people live on less than two dollars a day, Milwaukee will not succeed by trying to get poor. The only way Milwaukee can thrive is by getting smart- competing with high skill, high productivity, high-wage employees.

Indeed, opponents of the sick leave referendum, such as the Metropolitan Milwaukee Association of Commerce (MMAC) point out that many of their members already provide paid sick leave. These MMAC members should welcome higher standards for all employers, which would protect them against unfair competition from businesses without standards, and would prevent a destructive race to the bottom in workplace standards.

Providing all Milwaukee workers with paid sick leave is the right thing to do. It is also the smart thing to do because firms that treat their employees humanely benefit from increased commitment, inventiveness and productivity, the keys to competing in an increasingly competitive global economy.

We urge the citizens of Milwaukee to VOTE YES on the sick day referendum.

Zohreh Emami, PhD, Professor of Economics, Alverno College
Marc Levine, PhD, Professor of Urban Studies, UWM Center for Economic Development
Michael Rosen, PhD, Economics Instructor, Milwaukee Area Technical College


Unknown said...

Where do we think our employers will get the money needed to pay for this new benefit? What will stop them from just moving our jobs to Waukesha or even Wauwatosa?

What are employees going to do when their bosses make them part time to avoid paying the sick leave benefit?

What are employees going to do if their employer "adapts" by cutting paid holidays and vacation days?

Jeff Werstein said...

Nice letter, Mike and company!

Out here at the end of the world in Chile, we have UNLIMITED and mandatory paid sick leave AND THREE weeks mandatory paid vacation per year (that's right, you have to take them or your company is fined!)Plus women are granted 45 days PAID pre-natal leave AND 90 days PAID post-natal leave. Even fathers are granted 5 days paid "fraternal" leave after the birth of their child.

Chile has been considered to have one of the strongest economies in the region, outperforming regional powerhouses such as Argentina and Brasil at times, not to mention the other more populous and larger countries in South America. Without a doubt, Chile has been helped by their rich and plentiful natural resources, but their liberal and family-oriented labor laws have not put them at a disadvantage against their neighbors when it comes to attracting foriegn investment and foriegn companies to open offices in Chile.

Anonymous said...

@ Zes:

Instead of worrying about attracting businesses by exploiting workers (which always leads to an endless down spiral of degradation of life of the working class which in turns means they can not consume & hence causes a burst bubble, which is EXACTLY why capitalist economies always suffer them every 10-15 years) you should perhaps be worrying about making laws to keep businesses in America lest they pay tariffs from hell or you prevent anything from being imported here with exception to raw materials.

Moreover, if we provided the consumer class with social benefits for base necessities it frees up their income to actually consume & hence businesses make more profit.

The idea of appealing to businesses at the expense of the worker is exactly what caused this whole mess to begin with. Our companies out sourced a bulk of America's jobs to the third world where labor is cheap - they imported the trash here at inflated prices to be sold, yet because we suffered such job loss we now can't buy their products. Such is the soul of capitalism: businesses want IMMEDIATE profits without thought to later consequences.

To aggravate the situation, our social benefits provided by the government, SUCK. 59% of our federal budget is eaten up by the military to fight wars no one wants only to secure profits for the very few while the cost of health care eats up 400 dollars per employee for the average business owner and costs the average American 700 dollars worth of consumer dollars a month. With the continual suppression of wages pitted against inflation of housing prices we have managed to outpace minimum wage by 20 times! What does this get us? EXACTLY what we have now: an economy where 1 out of 8 Americans are losing their homes, nearly 30% of the unskilled labor force is unemployed & 25% of American children are on food stamps. This can NOT be fixed unless companies are prevented from outsourcing OR social benefits are put in place to save the duress on the average American until a new innovation comes out which opens a new market & hence employs people until we can start all over again with the outsourcing craze...

We are in the age of globalism, we have two choices: we either eliminate all borders & create a world union to prevent abuses of the proletariat, or: we continue to watch our standards of living reduce so the 1% of this country moves from owning 93% of America's wealth to ALL of it & then we have a bloody revolution... Americans, and the world for that matter, are not smart enough for option one. So number two will continue to unfold...

-Schnook's Kid