New Research Predicts Mandatory Paid Leave to Cost 430,000 Jobs, $650 Billion in Lost Economic Output

Date: January 13, 2016

Paid Leave would cause severe job losses and slow the economy, according to new
research by the National Federation of Independent Business (NFIB)

Contact: Jack Mozloom at (609) 462-5610

Washington, DC
(January 13, 2016)
– A federal mandate requiring employers to offer paid
leave would erase 430,000 jobs and shrink economic output by $652 billion over
10 years, according to new
research released today
by the National Federation of Independent Business

“There’s no such thing as a free benefit,” said NFIB President and CEO Dan Danner.  “This would come at a high cost to small
business and will have a serious effect on jobs and the economy.”

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 Tuesday evening 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.

“What the advocates don’t realize is that there are millions
of small businesses that don’t make a dollar if their employees aren’t there to
perform a service for customers,” said Danner. 
“No one gets paid, including the business owner, if customers aren’t
being served.”

It’s easy for activists and elected officials to give away
someone else’s money, said Danner.  But
someone has to pay.  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 that
the new mandate will require.

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.

“The question isn’t whether paid
leave is a good benefit,” said Danner. 
“The question is whether every business can absorb the cost and whether
we’d be causing more harm than good by trying to graft it onto an economy in
which wages are flat and growth is slow.”


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