a thoughtful web.
Good ideas and conversation. No ads, no tracking.   Login or Take a Tour!
comment
user-inactivated  ·  3808 days ago  ·  link  ·    ·  parent  ·  post: "US should join rest of industrialized countries and offer paid maternity leave" - Obama

    Some businesses will bear the costs of the benefit, that may be bad

Actually, it's the working families who will bear the costs of the benefit as well.

An employer is indifferent between paying $X in salary or $Y in salary plus $Z in benefits, where X = Y + Z. If this benefit is mandated, salaries and other benefits will simply fall until total compensation is roughly where it was before. Actually, since wages are sticky, what will probably happen is that pay rates won't fall, but rather stagnate or increase more slowly than they otherwise would have, until the pre- and post-mandate curves converge. The long run effect will be the same, though.

Those who prefer the newly mandated benefit to the forgone salary & benefits - and who didn't already have paid parental leave, and are still employed after employers adjust to the mandate - will be net winners. Those who would prefer any other bundle of salary & benefits will be net losers. And of course there will be people at the margins who are only employable today because this mandate doesn't exist. Mandating an additional benefit will either drive the pay of these workers below minimum wage, or make it unprofitable to employ them, in either case costing them their jobs.

In theory if that first group is large enough then the mandate could be a net benefit, but I don't think that's the way to bet. And even in that case it would still be the most vulnerable who bear the greatest costs.