Paid Leave

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Does the US have a national paid leave program?

No. Unfortunately, most countries around the world provide a national paid leave program, but the U.S. does not provide such a program.

Has the U.S. tried to create a paid leave program? 

Yes, but recently failed to do so. During the pandemic, paid leave rose to importance in the minds of workers and their families, so much so that about 2 in 10 employees were offered paid leave for the first time, or employers strengthened paid leave benefits since the pandemic.  

Additionally, Congress gained and lost momentum to pass legislation to create a national paid leave program twice.  

With the failure to establish a national program, 13 states have enacted state-paid leave programs, five of these states since the pandemic, to meet the need for workers to take time off to care for themselves or a loved one.  

Who has access to unpaid leave in Arizona?  

Under the federal Family Medical Leave Act (FMLA), 51 percent of workers in Arizona have access to unpaid leave. This unpaid leave mostly protects a worker’s job. Only workers in large companies, with a year of employment and full-time or salaried positions have access to unpaid leave under FMLA. 

But with the typical full-time Arizonan worker losing about $917 in income for every week of unpaid leave, 62 percent of Arizonans who are eligible for unpaid leave cannot afford to take it when they need it.¹ This is especially true for 65 percent of women reporting they cannot afford unpaid leave compared to 59 percent of men in Arizona. Nationally, about 80 percent of Black and 62 percent of Latino workers say they would face a financial hardship if they were to take unpaid leave.

Who has access to paid leave in Arizona?  

Because the U.S. does not have a national paid leave program, Arizonan workers must rely on their employer for paid leave. The reality in Arizona is that paid leave is unavailable to about 75 percent of workers in Arizona.  

There are also gender, race and ethnicity gaps in access to paid leave. Nationally, about 58 percent of Latino and 67 percent of Black workers report access to at least one type of paid leave compared to 72 percent of White workers. In a 2022 survey, 32 percent of women reported access to paid medical leave compared to 44 percent of men in Arizona. 

“I did not have paid maternity leave for my two children. I saved my vacation and sick leave to use instead. It was very difficult to find infant care that we could afford.” – Elevate Her event participant

Many workers without access to paid leave work jobs that pay low wages. Data from 2023, Bureau of Labor Statistics, shows a decline in access to paid leave for workers making less than $14 an hour while there has been a substantial increase in access for those making more than $35.65 an hour in the last year. About 23 percent of workers make less than $17 an hour in Arizona.

¹ Workers are considered unable to take unpaid FMLA leave because they are either ineligible based on employer size or job tenure requirements or because 12 weeks of lost wages from unpaid leave would result in their family income dropping to or below 200 percent of the Supplemental Poverty Measure.

How can paid leave support workers and their families? 

Paid leave would enhance the economic well-being of Arizona’s workers and their families. 

Workers without paid leave are most likely to experience financial hardship. The wage data above shows that workers with the lowest incomes have the least access to paid leave. Women tend to earn lower wages when they experience gaps in their careers. In fact, the median wage for women in Arizona in 2023 is lower than that of men a decade ago. A paid leave program would allow more women to advance in their careers. 

“Years ago when I was a single mom, I went to work while I was sick because if I took time off, I would not have enough money to pay rent.” – Elevate Her event participant

With more opportunities to make progress in a job, parents will have less stress and could help reduce the number of children who have an adverse childhood experience. The 2024 KidsCount Data Book reports 43 percent of children in Arizona have experienced one or more childhood experience compared to 40 percent nationally. Prevent Child Abuse America provides resources about paid family leave in recognition that such benefits are a significant lever for preventing early childhood maltreatment.” 

Paid leave would reduce health issues for children, older adults and people with disabilities.  

The benefits that paid leave creates for the health of parents and children – from mental health to less rehospitalizations and more – are clear.  Researchers say that without quality initial bonding time between a parent and a newborn, the child is less likely to become a happy, independent and resilent adult. Paid leave has also been found to reduce infant mortality rate. 

Caregiving costs skyrocketed after the COVID-19 pandemic due to a shortage of direct care workers. This increased the value of unpaid caregiving from family members to $18.20 per hour in Arizona.  A paid leave program would allow more older adults and people with disabilities to receive care at home from their family.

How can paid leave support businesses? 

Paid leave helps businesses retain quality employees and reduce turnover costs.  

A significant share of prime-aged adults, people ages 20 to 54, who are not in the labor force largely cite the lack of paid leave as the reason for leaving their last job. The costs of replacing an employee can be significant with one study finding that the median cost of replacing a departing employee is 21 percent of that employee’s salary.  

“I had to find a new job that was “child” friendly and could accommodate my needs as a new mom.” – Elevate Her event participant

In an already tight labor market, employers are having to replace employees that would have stayed but for the lack of paid leave. These additional hiring and training expenses are impacting businesses’ bottom lines at a time of rising capital and labor costs and high interest rates.  

Paid leave improves productivity, employee morale, and profitability.

Access to paid leave has been reported to improve productivity, employee morale, and even profitability. One study found that employers that created or expanded their paid leave programs saw an average increase in profit per full-time employee of 6.8 percent.  

How can paid leave support the economy? 

Paid leave will increase Arizona’s labor force participation rate, boost Arizona’s gross domestic product (GDP), and provide a broader tax base to support public investment in schools, housing, and transportation and water infrastructure. 

Women disproportionately take on unpaid caregiving responsibilities. In Arizona, the labor force participation rate of women has still not recovered since the pandemic as many women remain out of the workforce due to caring for a child or an ill family member.  

Access to paid leave can keep workers at their current employer and incentivize non-working adults to re-enter the workforce. When women are offered paid leave, they are far more likely to remain in the workforce 10 years later as compared to women who are only offered unpaid leave or no leave at all.  

Providing paid leave is good economics. When the labor force participation rate is higher, the GDP will rise as more people are producing goods and services in the economy. Consequently, this additional economic output will result in additional tax revenue to invest in public policies that promote future economic growth.  

Arizona experienced a severe shortfall in revenue in 2023 and the first part of 2024 because of a series of tax cuts passed in 2021. Additionally, it has become more difficult to raise taxes in Arizona, which means that the state needs to broaden the base to raise additional revenue.  

Access to paid leave is an equitable policy that will increase the labor force participation rate and lead to increased tax revenue for Arizona. This policy will not only support workers and families but allow Arizona’s economy to continue to thrive.

 Check out our video on paid leave:

 

   

Let’s make paid family leave a reality! 

Join AZCenter’s mission to bring paid leave to Arizona’s workers and families.  

Learn more about AZCenter’s recent Elevate Her event in support of paid leave and more affordable childcare.  

Let’s raise the economic power of all Arizonans

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