STUDY: Mandatory paid leave would cost IL 22,000 jobs, $4 billion in lost output

Date: January 13, 2016 Last Edit: January 19, 2016

STUDY:
Mandatory paid leave would cost IL 22,000 jobs, $4 billion in lost output

A
federal mandate requiring employers to offer paid leave would erase 13,223 jobs
and shrink the state’s economic output by $2 billion this year alone, according
to new research released today by the National Federation
of Independent Business
.

By 2025, the
total number of jobs lost would reach 21,859, while the cumulative drop in the
state’s economic output would reach a projected $4 billion.

“While a paid
sick leave benefit may be desirable, these numbers reflect the cold, hard truth
that faces every small business in this country: it is too expensive and jobs
will be lost,” said Kim Clarke Maisch, state director of NFIB/Illinois, the
state’s leading small-business association. “Our members work hard to provide
the best benefit package they can afford. This one-size-fits-all approach is
another attempt by government to get in the middle of a small business and
their workers. What works for a multinational conglomerate might not work for
the flower shop down the street.”

President
Obama has made mandatory paid leave a central part of his domestic
agenda. Last year during his State of the Union Address and again on
Tuesday, he called on Congress to pass the mandate. Organized Labor has
also made it one of their top political priorities and it will very likely have
a prominent place in the elections this year. Some lawmakers in Illinois, as
well as in the City of Chicago, have proposed different versions of paid sick
leave, but none have become law.

“It’s easy for
politicians to spend other people’s money, but what a lot of people seem to
forget is that there are millions of small businesses out there that don’t make
a dime if their employees aren’t there to serve customers,” Maisch said.

NFIB analyzed
the Healthy Families Act (HR 932) which would require firms with 15 or more
employees to grant 56 hours of paid leave every year. The measure would include
part-time as well as full-time time workers.  According to the research,
mandatory paid leave would impose three major costs on employers: the direct
expense of paying wages to absent workers; lost productivity resulting from
workers not working; and increased costs for reporting and recordkeeping
required by the new mandate.

The
combination of all three will raise the cost of labor and reduce productivity.
The smallest firms will be hit hardest, accounting for 58 percent of the job
losses. Some industries will suffer more than others, with construction and
retail shedding the most jobs.

“Anytime there
is a proposal to mandate a new benefit, there has to be a discussion of cost
because in the real world everything has a price tag,” Maisch said. “It’s about
whether every business, and especially small businesses, can absorb the cost
and whether we’d do more harm than good by treating small businesses the same
as big corporations.”

NFIB/Illinois
is the state’s leading small-business association, with 11,000 dues-paying
members representing a cross section of the state’s economy. To learn more,
visit www.NFIB.com/IL or follow @NFIB_IL
on Twitter.

 

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