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The Independent Investor: Paid Family & Medical Leave Overdue

By Bill SchmickiBerkshires columnist
Paid family and medical leave are long-overdue in this country
 
What do the United States, Papua New Guinea and Oman have in common? Those are the only three countries in the world that do not legally obligate employers or taxpayers to pay for maternity leave.
 
Many American businesspeople will hide behind a knee-jerk response to the above statement: "We are a free-market society," they will argue, "and paid leave is paramount to just another form of socialism."
 
Good try, but that old argument is no longer based in facts. Free markets have given way to corporate socialism in this country, while corporations are now legally considered to have the same rights as individuals.
 
As such, individuals have a moral responsibility to protect and care for future generations. They have an obligation to society. Giving paid leave to American workers, not only to deliver and care for their young, but also to provide income during serious medical conditions, cannot be left to the whims (and greed) of our corporate community. As it stands, after decades of waiting, a mere 15 percent of companies have voluntarily instituted paid leave to their workers, according to a 2017 Bureau of Labor Statistic report.
 
The fact that for the last several years, corporations have banked stupendous profits and now carry more cash on the books than ever before just makes their failure all the more apparent, if not disgusting. To be fair, there are some companies such as Microsoft, IBM, Netflix, American Express, Citigroup and, of course, Berkshire Money Management that do pay for parental and medical leave.
 
Take my own case as an example. As many readers are aware, I have had some serious medical problems over the course of the last few years. Two knee replacements kept me out of work for about five months. And then there was that bout with prostate cancer in 2017. Not only did the company pay me while I was out, but management sat in the waiting room with my wife throughout my surgeries.
 
Can you guess how I felt when I returned to work? I have spent the last two years working like a maniac to not only make up for that time loss, but also to show my gratitude for all the company has done for me. And I'm not the only one.
 
Our compliance officer, Jayne, within her first year of employment at BMM, had her second child, Marigold. Once again, BMM not only paid for 13 weeks of maternity leave, but went the extra mile when Marigold refused to take the bottle. We hired a nanny to baby-sit in the office for weeks and weeks so Jayne could come to work with her child until she was over that hurdle.
 
"Both my morale and productivity took a great leap forward as a result," Jayne said. "Knowing that both I and my child were so well-supported reduced my worry dramatically and allowed me to work that much harder here."  
 
As of today, only six states — California, New Jersey, Rhode Island, New York, Washington, Massachusetts — and the District of Columbia have passed paid family-leave programs. Massachusetts, which passed their legislation last year has delayed implementation of their program until October 2019.
 
Their law provides workers with 12 weeks of family leave and 20 weeks of personal medical leave. Workers on paid leave will earn 80 percent of their wages, up to 50 percent of the state's average weekly wage, and then 50 percent of wages above that amount.
 
The employer pays at least 60 percent of the medical leave contribution required for each employee, but none of the family leave contributions.  The worker picks up the rest via a fund which will tax an employee's earnings.
 
Although the Federal government does have a Family and Medical Leave Act (FMLA) passed in 1993, it only protects the worker from being fired or excluded from a company's group health insurance coverage and then only for a certain time period.
 
The entire charade of hiding behind some mythical form of capitalism to justify this failure by our nation is inexcusable. Eighty-two percent of participants in a Pew Research Center poll believed new mothers should have paid time off while 69 percent said the benefit should apply to fathers as well.
 
Of course, simply because the majority of Americans want, even demand, something from their government is no guarantee that Congress or the president will listen. It's campaign season, so let's make this an issue for the candidates.
 
Bill Schmick is registered as an investment adviser representative and portfolio manager with Berkshire Money Management (BMM), managing over $400 million for investors in the Berkshires.  Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

 

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