In an April address to Congress, the Biden administration proposed the $1.8 trillion American Families Plan (AFP). The aim is to invest in families by providing universal preschool education, mandating comprehensive paid family leave, and extending tax cuts to lower and middle-class families.
The plan not only intends to provide aid in the wake of COVID-19’s economic destruction, but also to make the U.S. provide paid family leave, as it is one of the few Western countries that does not. Biden’s proposal would guarantee 12 weeks of paid family leave or medical leave with the pay being equal to two-thirds of average weekly wages, meaning up to $4,000 a month. The paid leave section in the American Families Plan would cost $225 billion over 10 years.
How helpful are these proposals to American families?
Rachel Greszler, research fellow in economics, budget, and entitlements at the Heritage Foundation, and Carrie Lukas, president of the Independent Women’s Forum, argued in a virtual talk on June 8 hosted by the Heritage Foundation that Biden’s plan fails to empower families and strips control from women. They primarily discussed how universal paid family leave would negatively impact women, the lower-class, and children.
The AFP intends to empower women, but Greszler says it would actually decrease flexibility and agency for working mothers. She noted that a recent study conducted by the National Bureau of Economic Research observing Austria’s history of progressive family policies (paid leave, government subsidized child care, etc.) found that those policies have no positive impact on women. According to the study, the wage gap between men and women would have been two percentage points smaller had those policies not been in place.
According to Greszler and Lukas, the number of women in leadership roles significantly decreased when and wherever these progressive family policies were implemented. Oddly, enough, women’s likelihood of having more children decreased under these policies.
Greszler and Lukas argued that women will lose opportunities in small business, as dynamics become less flexible when employers are forced to submit to Biden’s federal plan. These plans, they said, also often lead to less job creation, higher taxes, and a loss of a personable work environment, as Lukas described many companies having to relinquish email and database access from employees to prevent lawsuits.
The honest conversation between an employer and employee regarding time off and compensation would also be abolished with Biden’s federal plan. Lukas reinforced this idea, saying, “Once you’re in a government system, the conversation is over.” She added that the “stringent” rules of a blanket federal system, like the one the Biden administration is promoting, dismantle freedom and flexibility between both family and business.
In the U.S., numerous companies support and maintain their own paid leave programs that they determine for their employees. Greszler and Lukas explained how these businesses will be forced, if the AFP is approved by Congress, to implement a universal plan that does not work efficiently for all families.
Last year when Washington state kicked theirs [paid leave program] in, people were waiting 10 weeks before they got benefits or even found out if they were eligible for benefits. Everybody has to wait one week … and then after that you can apply when you actually have the need. People were taking out loans because they didn’t know if they would qualify for these benefits.
The delay in benefits can be especially disadvantageous for lower-income families as they do not have the luxury or funds to wait. In support, Lukas referenced an Independent Women’s Forum study to demonstrate that these programs often do not help low-income workers, as these workers are more likely to be unaware of these programs, ineligible, or prefer shorter leaves. Since Biden’s plan taxes everyone, she said, the majority of the funds primarily benefit the upper-middle class.
Greszler explained that the Left often stresses that child care is an investment, meaning wages are essentially lost when parents take time off work or pay for child care. In reality, she said, mothers’ and fathers’ investment should lie in time and energy spent for the child and for the family.
Both speakers responded to the claim that child care is a burden, which the Biden administration aims to alleviate. Greszler said, “Frankly, I think it is insulting to the millions of mothers and fathers out there who do give up that time to be at home with their children because it has very positive consequences for them.”
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