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PPI - Universal Paid Leave - Atkinson (2003)

PPI - Universal Paid Leave - Atkinson (2003)

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Putting Parenting First
Why it’s Time for Universal Paid Leave 
by Robert D. Atkinson
Policy Report 
March 2003
In today’s New Economy a growing numberof Americans are struggling to balance work andfamily responsibilities, particularly theirresponsibilities to care for their newborn children.Research points to the great benefits for infantswhen a parent can stay home with their newborn.Yet, many families cannot afford to have one parentstay at home, even during the first year of life. Whilein 1965 only 17 percent of mothers of one-year oldsworked full- or part-time, 58 percent did by 2001.
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So many parents of newborns must work becausethey cannot afford to give up the second wageearner’s income.
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While the Family and MedicalLeave Act (FMLA) made it possible for someparents to take unpaid parental leave, it did notcover all workers and did not provide workers thefinancial support to do so. In fact, the United Statesis the only developed country failing to providewidespread, job-guaranteed parental leave withsome provision for wage replacement.
3
It is time to build on the FMLA and provide partial wagereplacement for new parents to stay home for atleast the first six months of a newborn’s life. Sucha benefit would impose only minimal costs onemployers and can be structured so as to not reduceemployer incentives to hire workers. Specifically,PPI proposes that
Congress should:
"
Require states to allow new parents who have been working to collect unemploymentinsurance benefits for 26 weeks (the standardlength of time for receiving UI benefits). Tohelp compensate states and employers, thefederal government should contribute 50percent of the costs of the program. It shouldalso exempt these benefits from federal incometaxes.
"
Extend the FMLA to cover all establishmentswith greater than 25 workers, instead of itscurrent coverage of workers in establishmentswith 50 or more workers.
"
Expand the child tax credit to $2,000 forparents with children under the age of one,where one parent is staying home with thechild.
"
Allow parents who take time off work duringthe first three years of their child’s life to latermake up the tax-free retirement contributionsthey missed.
The Problem 
While virtually anyone who has been aparent can testify to the importance ofestablishing a close bond with a newborn, childdevelopment research backs up this intuition.From the early studies of developmentalpsychologists John Bowlby, Harry Harlow, ReneSpitz, and others on the detrimental effects of alack of attachment to the most recent studies ofparent-infant bond on intellectual development,the evidence is clear: The ability of the parent toform close attachments with their infant haslong-term benefits, and that bond is affected bythe amount of time parents spend with theirinfant during the first year. The Carnegie TaskForce on Meeting the Needs of Young Childrensummed it up: “Experts can now substantiatethe benefits of allowing ample time for themother to recover from childbirth and for theparents to be with their new baby during thefirst months of life.”
4
 
2
Progressive Policy Institute 
www.ppionline.org
Recently, an increasing amount of evidencehas pointed to the critical role that early bonding and attachment plays in the neuro-cognitive development of the infant.
5
A recentstudy using data from the National Institute ofChild Health and Human Development foundthat children whose mothers spend the firstyear at home with them score higher on schoolreadiness at age three and the results persist.
6
Mothers who stay at home for the first sixmonths are also more likely to breastfeed,
7
which has been shown to be beneficial to theinfant’s health, both in the short-term andthroughout life.
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(It also can help prevent breastcancer in the mother.
9
) Paid parental leave hasalso been found to have have a significantimpact on improving pediatric health, asmeasured by birth weights and infant or childmortality.
10
Moreover, the benefits are not just cognitiveand physical, they are also emotional andsocial. Dr. Jay Belsky, professor of HumanDevelopment at Pennsylvania State University,reported that his research “clearly reveal[ed]that extensive nonmaternal (and nonparental)care in the first year is a risk factor in thedevelopment of insecure infant-parentattachment relationships.”
11
Attachmentproblems are one risk factor for child abuse.When they considered “the irreducible needsof children,” leading child development expertsDr. Stanley L. Greenspan and Dr. T. BerryBrazelton concluded that the opportunity forparents to spend significant time with theirinfants was so important that we should havea national program to provide paid leave forone parent during much of the first year of achild’s life.
12
Why Do So Many New Parents Work?
Only 18 percent of infants spent their firstyear at home in the care of their mothers.
13
More than one-half of mothers of one-year oldsworked full- or part-time. In 1995, nearly 13million (more than one-half of the nation’s 21million preschool children) were receivingchildcare from someone other than theirparents.
14
By the time children are four-monthsold, more than three-quarters of families nowuse some form of non-parental day care.
15
There are multiple reasons for this declinein stay-at-home parents, including women’sincreasing access to the labor market.However, a major factor is that many familiescannot afford to give up the second wageearner’s income by having one parent stayat home during the first year of life. Whilethe FMLA made it easier for parents to stayhome, without financial support it remaineddifficult for many to do so.
16
Moreover, anestimated 38 percent of workers are notcovered by the FMLA, and those who arecovered get just 12 weeks of leave, notenough for adequate parental leave.
17
Parental Leave Policies in Other Nations
In contrast to the United States, most otherdeveloped nations provide some kind of paidleave to new parents during the first year ofparenting. According to the InternationalLabor Organization, the maternity and nursing benefits given to working mothers in the UnitedStates are the least generous in theindustrialized world. Ninety-two percent of158 developed and developing nations providepaid maternity leave to women workers, andone-third permit leaves of more than 14 weeks.The United States is the only industrializedcountry that does not mandate job-guaranteedparental leave and some provision for wagereplacement.
18
For example, in Germany, a newparent staying home can receive modestfinancial support for up to one-and-one-halfyears. Denmark provides 18 weeks paidmaternity leave followed by 10 weeks paidparental leave that can be taken by either themother or father. In Sweden, new parents whohave been in the workforce receive full pay forat least one year.
19
Beginning in April 2003, theUnited Kingdom will provide 26 weeks paidmaternity leave. New Zealand provides 13weeks paid leave, but the program coversvirtually all workers, even at smallestablishments, and provides full wagereplacement up to $325 per week. Even low-income nations like Afghanistan (at least beforethe Taliban took over) and the Philippinesprovide paid leave because they place a highpriority on the health and happiness of theirnation’s families and children.
 
3
Progressive Policy Institute 
www.ppionline.org
Our nation’s lack of paid parental leave isnot because Americans don’t want this benefit.To the contrary, polls show that Americans—whether they have children or not—overwhelmingly support expanding familyleave policies. A 1998 survey by the NationalPartnership of Women & Families found that83 percent of working parents and 81 percentof working people without children favorexpanding unemployment or disabilityinsurance to provide partial wages for workerswho need to take family leave to care for anewborn, a newly adopted child, a seriouslyill family member, or to recover from their ownserious illness.
20
The Solution 
The evidence is clear that providing supportto help parents stay home with their newborns,at least for the first six months, and other familyassistance would not only help individualfamilies but also the nation as a whole. Thekey is determining what kind of policy can bestprovide income support during periods ofleave. There are three components of this:
"
 boost child tax credits for children in theirfirst year;
"
allow stay-at-home parents to make up losttax-free retirement contributions; and
"
provide new parents who stay home withpartial income replacement.
Child Tax Credits
The Progressive Policy Institute has longproposed expanding the child tax credit forchildren under the age of five in order to makeit easier for at least one parent to stay homewith the child.
21
Under the tax bill passed byCongress last year, the tax credit for childrenwill increase from its current level of $500 to$1,000 by 2010, although the credit applies toall children under the age of 16.
22
PresidentBush has proposed accelerating the phase-inso that parents receive the full $1,000 this year.While this approach helps all families withchildren under the age of 16, it does not providemore generous support for families in thecritical first years of a child’s life that mightenable them to stay at home.
As a result,Congress should expand the child tax creditof $2,000 for parents with children under oneyear of age where both parents worked theyear before the child was born and whereone parent stays home with the child duringthe first year of life.
Single mothers receivingTANF benefits would be ineligible for the taxcredit. Parents could take the credit for up tothree children.While tax credits can help make itfinancially easier for one parent to stay home,especially if they are targeted at parents of veryyoung children, families do not receive thecredit for as long as 15 months after takingleave; therefore, tax credits are not enough ofan incentive to help a parent choose to stayhome for the first six months of a child’s life.However, if these credits were supplementedwith a bi-weekly paid leave program, moreparents would be able to stay homeimmediately after the baby is born.
Retirement Contribution Fairness
Because of restrictions in the federal taxcode, parents who take unpaid parental leavehave no way of making up pensioncontributions once they return to the workforce.In 1999, Congressman Bill McCollum (R-Fla.)proposed the Women’s Investment and SavingsEquity Act of 1999 that would enable parentswho take one year off work to care for anewborn to make up for lost payments toemployer-sponsored pension plans. Thelegislation allowed three years to make up themissed contributions. Such legislation should be broadened to cover the first three years ofleave after a newborn arrives, including allforms of tax-exempt retirement contributions,including IRAs and 401k plans.
As a result,Congress should
a
llow parents who take timeoff work for the first three years of theirchild’s life to later make up the tax-freeretirement contributions they missed.
Paid Maternal and Parental Leave
Currently, only 8 percent of workers areeligible for paid parental leave, while another

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