Cecile Johnston and her husband Kevin Diffily have just filed for bankruptcy. Their mistake? They had a new baby, and Johnston took 12 weeks off to care for her, as is provided by the federal Family and Medical Leave Act.
"I was working at part-time jobs for two agencies," explains Johnston, who is a community educator and organizer, "and had only a small amount of accumulated sick and personal leave from one job. The other agency agreed to lay me off under the impression that I could then get unemployment insurance. But that turned out not to be the case."
With two older children to provide for, her husband's salary proved inadequate. "We ended up putting a lot of things on credit cards -- even things like gas and groceries," she admits. "It snowballed in a way I don't think we could have foreseen."
Johnston's story is only one of many cited in a new campaign to give families paid benefits under the federal Family and Medical Leave Act. Since the act was passed in 1993, an estimated 24 million workers have taken unpaid leave to care for new children and sick parents or to recover from an illness of their own. But fully two-thirds of employees who need such leave cannot afford it, according to a study by the bipartisan Family Leave Commission established by the law. One out of 10 who took
leave were actually forced onto welfare.
Advocates propose that governments extend either state unemployment or temporary disability insurance programs to pay for family leave. "Now when the economy is booming, we can and should solve this problem together," argues Donna Lenhoff, general counsel of the National Partnership for Women and Families, the Washington, D.C.-based group that is leading the effort.
Last June, at the direction of President Clinton, the Department of Labor issued regulations that enable states to provide unemployment checks for family leave "on a voluntary, experimental basis." And Senator Christopher Dodd of Connecticut and Representative Lynn Woolsey of California, both Democrats, introduced a bill in Congress to establish state demonstration programs.
So far, four states -- Maryland, Massachusetts, Vermont, and Washington -- have shown interest in the new regulations. However, they have not yet passed the necessary legislation to start the experiment. They are among 18 states where there are active campaigns on the issue and where supporters have introduced bills in state legislatures.
Supporters include a very wide range of interests. In Massachusetts, for instance, where victory is reported close at hand, the coalition leading the campaign includes the Women's Statewide Legislative Network, the AFL-CIO, the Alzheimer's Association, the Catholic Church, and the Jewish Labor Council, among others. According to the National Partnership, they represent an overwhelming number of Americans in favor of the idea. In a 1998 poll, 82 percent of women and 75 percent of men supported it.
The Price Tag: Unemployment Insurance.
Every benefit has a cost. But in this case, advocates say it would be minimal. The estimated expense of providing income to Vermont workers on parental leave is less than 15 cents per week per covered employee, according to the Partnership. The predicted cost for Massachusetts workers on family or medical leave would be no more than $1.25 per covered worker per week. States wouldn't even have to raise unemployment insurance rates, advocates argue, because the present low unemployment rate has resulted in unemployment fund surpluses in many states.
In fact, business groups have already won billions of dollars in unemployment insurance tax cuts, points out Maurice Emsellem of the National Employment Law Project, who testified on behalf of paid family leave before both Congress and the Massachusetts state legislature. "Over the past five years, during a period of corporate prosperity, the rate of UI [unemployment insurance] taxes has dropped by 50 percent, costing the state UI trust funds $34 billion dollars. By anyone's estimate, you can't compare these tax cuts with the costs of the family leave program and all other UI reforms combined," says Emsellem.
The Price Tag: Temporary Disability Insurance.
If temporary disability insurance pays for leave, to which employees contribute the most, the costs would also be low, say advocates. A study just issued by the California Employment Development Department reports that employees would have to contribute only one-tenth of 1 percent more to cover the costs. That's $1 for each $1,000 earned, with a cap at $46.
Nonetheless, opponents to paid family leave are already mobilizing. The U.S. Chamber of Commerce and two human resource management groups have sued to repeal the new Labor Department regulations that would permit states to test paid family medical leave. Federal unemployment tax law "generally requires that people who collect benefits be able and available for work," argues Mike Bartlett, director of labor law policy for the Chamber. "But people absent from work because of the birth or adoption of a child are not able or available for work. They have made a conscious decision not to be so. I am not making a value judgment here. It's just a fact."
"Besides," he adds, "when Congress passed the Family and Medical Leave Act it made a conscious choice not to provide for paid leave." Supporters of paid leave reply that although it is true that the original unemployment compensation law requires workers to be available for work, Congress set up the law in response to the Depression of the 1930s. "It was responding to mass layoffs," notes Lenhoff, "but it was not limited to layoffs. It could also be used for a variety of other situations, such as breaks in employment."
In many states, workers can collect unemployment insurance while they are in job training programs, or when they are laid off during a lull in business when there is full expectation of being recalled, or when they are on jury duty, argues Lenhoff. "In the latter case, you're doing society's work -- just as you are when you're taking care of a new baby. The original act doesn't define 'unemployment' as a layoff. It explicitly leaves it to the state's discretion."
It's true, concedes Barlett, that people in training programs are eligible for unemployment insurance, "but that is because their training is directly related to their ability to continue their employment. You can't argue that with regard to leave for caring for a child. In fact, the regulations do not even require the parent to return to work!"
Actually, the vast majority of leave-takers do return to work, reported
the Family Leave Commission in its report to Congress in 1996. Eighty-four percent return to the same employer.
"The [Family and Medical Leave Act] has not been the burden to business that some had feared," concluded the commission. The number of workers who took leave was low -- between 2 and 3.6 percent. It reports that for the vast majority of workplaces, there are no costs or very small costs associated with the act.
In fact, some employers say that family leave has turned out to be a benefit -- and some already pay for it. This was the case in Minnesota, where advocates have proposed to split the costs of the leave three ways -- between the employee, who forgoes a portion of wages, the employer, and the state.
In Minnesota, advocates surveyed 185 employers before coming out with their proposals. "We found [that] employers who pay benefits and who were even willing to testify before the state legislature that it improved morale and loyalty to the company," reports Marcie Jeffreys of the Minnesota Children's Defense Fund, which is leading the campaign.
One such was Elmer Anderson, a newspaper publisher and former governor of the state, whose company pays 40 percent of a leave-taker's salary for up to a year. "The employee taking leave is transferred to the Human Resources Department and given the title 'parent!' " exclaims Jeffreys. The Minnesota bill came quite close to enactment but did not make it through the final budget package.
The Battleground States.
The same "almost, but not quite" scenario has occurred in other states. In Indiana a bill to provide 12 weeks of unemployment insurance passed the House but not the Senate. In Massachusetts an unemployment insurance proposal passed as an amendment to the state's supplemental budget, but Republican Governor Paul Cellucci, who wants a tax credit for employers included, vetoed it. In New Jersey, two bills were introduced in the legislature -- one to provide unemployment benefits and one to extend disability pay -- but both failed. In New York, funding for a family-leave benefits study is included in this year's budget.
Other states with active campaigns include California, Connecticut, Florida, Iowa, Maryland, Mississippi, Missouri, New Hampshire, Pennsylvania, Vermont, Virginia, and Washington. Advocates hope that one success will provide an example and lead to others. But until states or the federal government change the laws, people like Cecile Johnston and Kevin Diffily will continue to struggle with the basics of supporting -- and caring for -- a family.