Would Rubio’s Paid-Leave Proposal Help the Working Class?

 

Allen Smith, J.D. By Allen Smith, J.D. August 2, 2018
LIKE SAVE

​Working-class families will benefit from a bill that would let them use a portion of their saved Social Security benefits during parental leave, according to Sen. Marco Rubio, R-Fla., who announced the bill's introduction at an Aug. 2 press conference.

However, proponents of paid-family-leave and medical-leave legislation that would tax employers and employees have criticized Rubio's proposal as not comprehensive enough.

Under his bill, parents could delay the date at which they begin receiving Social Security retirement benefits by three to six months per benefit taken, as determined by the Social Security Administration each year, according to Rubio's office.

Parents making below the median annual family income ($70,000) would receive a benefit equal to about 70 percent of wages for two months. Many parents, especially those with low incomes, would be able to finance three months of leave with the amount of the benefit, his office noted.

One in 10 workers receive paid family leave from their employers, Rubio said on "CBS This Morning" on Aug. 2. "If you're making $300,000 a year at an investment bank, you probably have paid family leave," he said, "but if you're making $45,000 a year working for a small business, who probably can't afford to provide it, you do not have it."

The Society for Human Resource Management (SHRM) "appreciates Sen. Rubio's focus on this issue, as it is important to have more ideas on the table to address paid family leave, especially those that do not impose a mandate on employers," said Lisa Horn, SHRM's vice president for congressional affairs. "This is a new approach, and we look forward to reviewing the legislation to better understand the paid-leave benefit, how it may impact an employee's retirement security, and how this proposal interacts with other state and federal laws."

We've rounded up the latest news on paid-leave proposals. Here are SHRM Online resources and news articles from other trusted media outlets.

[SHRM members-only toolkit: Managing Family and Medical Leave]

Common Struggles for New Parents

Too often, new parents take on new debt or fall onto welfare programs after having a child, Rubio and Rep. Ann Wagner, R-Mo., said in an Aug. 1 opinion column in USA Today. Wagner will introduce companion legislation similar to Rubio's in the House of Representatives, which is on recess. The financial challenges of having children are increasingly concentrated among middle- and working-class parents, they cautioned. The benefit also would be available to stay-at-home parents.

(USA Today)

Chart: Proposed wage replacement rates for parent earning $25,000 annually

Possible Reduction in Dependency on Government Programs

Approximately 17 percent of workers and half of low-income workers who do not have paid leave go on public assistance when they are on leave, according to Carrie Lukas, president of the Independent Women's Forum. Giving them access to early Social Security benefits, which they would effectively pay back by trading one benefit for another, would reduce dependency on other government programs, she predicted.

(National Review)

Opposition to Proposal

The National Partnership for Women & Families immediately criticized the proposal. It stated, "We appreciate that Sen. Rubio and Rep. Wagner are looking for a way to provide the paid leave America's families urgently need, but a program that only covers parents caring for new children, provides no leave for family care and personal medical needs, and forces parents to choose between paid leave and retirement security is absolutely the wrong way to go." It added that the proposal "is reckless, irresponsible and ill-conceived. This is a Social Security benefit cut for the working people who need Social Security the most."

(Tampa Bay Times)

FAMILY Act

Sen. Kirsten Gillibrand, D-N.Y., instead champions the Family and Medical Insurance Leave (FAMILY) Act, which would provide paid family and medical leave. Payroll deductions from employees and employers and contributions from self-employed workers would fund the benefits. They would be administered through a new office within the Social Security Administration, but Social Security benefits would not be used. However, at a July 11 hearing on paid leave, Andrew Biggs, resident scholar with the American Enterprise Institute, observed, "Many Americans are reluctant to fund paid leave with a new payroll tax of 0.4 percent of their wages, as proposed in the FAMILY Act."

(SHRM Online)

Delay in Retirement Described as 'Modest'

Lukas, a proponent of Rubio's bill, described the proposed delay in the retirement benefit for those who take paid leave as "relatively modest." Someone born in 1970 who reaches age 65 has a life expectancy of 15 more years—17 more for women, she stated. Lukas said that "delaying retirement by a few months still leaves room for a relatively long retirement." She noted that some have argued that the proposal would worsen Social Security's overall financial health by moving up when some benefits are paid but said that the Treasury might reimburse the Social Security Trust Fund. Social Security "faces a significant unfunded liability today and would continue to face the same liability if this reform becomes law," she asserted.

(National Review)

LIKE SAVE

Job Finder

Find an HR Job Near You
Search Jobs
Post a Job

SPONSOR OFFERS

Find the Right Vendor for Your HR Needs

SHRM’s HR Vendor Directory contains over 10,000 companies

Search & Connect
temp_image