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New Study: Small Business Owners Like Paid Family Leave Even More Once They’ve Tried It

On the entirety of planet earth just seven nations don’t offer their citizens at least some paid family leave to care for a new baby or ailing loved one. They are the Federated States of Micronesia, Nauru, Palau, Papua New Guinea, Tonga… and the United States. I’ll leave it to you to spot which country is the odd one out on this list. 

Why is the U.S. the only non-tiny island nation not to offer this basic benefit? The short answer is West Virginia senator Joe Manchin, who is currently holding back passage of President Biden’s Build Back Better Act. In its current incarnation the bill would offer all Americans four weeks of paid leave. Manchin has publicly worried that such “handouts” are anti-work. 

That’s absurd since study after study shows that having access to paid leave actually helps keep people in work. But there’s another common objection to paid family leave that seems more rational. Isn’t forcing smaller businesses to offer leave, even if it’s supported by the government, just too huge a logistical and financial burden? 

At first glance this seems like a valid concern (putting aside the fact that small businesses literally everywhere else manage just fine). The trouble with this line of thinking emerges when you actually talk to small business owners about their experience with paid family leave. As a recent working paper from the National Bureau of Economic Research shows, when small businesses experience paid family leave, they actually tend to love it. 

Don’t knock it till you try it. 

The research from experts out of Columbia, Stanford, and the University of Virginia exploits the fact that different states offer different benefits. A few like New Jersey and New York have already been offering workers paid family leave for a few years now. To see how small businesses were faring in these states, the researchers polled 539 companies with less than 100 workers and compared their views on paid leave with previous polls from before the new benefit came into effect. 

Even before the passage of paid family leave, small business owners were a lot more positive about the policy than some wavering politicians. Back in 2016, 63 percent supported paid family leave. After actually dealing with the reality of paid leave for a few years, 71 percent now support it. 

That suggests administering family leave, even in the current incredibly challenging labor market, can’t be too big a nightmare. But one more data point underlines exactly how much small businesses like a government-supported family leave scheme once they’ve experienced it. 

“The new NBER research shows that firms that had workers that used paid leave were more supportive of it. Of those companies interviewed, 22 percent said they had employees use their state leave and 29 percent had workers take leave under the Families First Coronavirus Response Act — boosting support for paid leave at those companies by 10 percentage points,” reports Bloomberg

Why a federal policy would be even better 

Perhaps that shouldn’t come as much of a shock. During Covid it makes sense that employers of all sizes would enjoy having a government-backed system to support employees facing a personal or family health crisis. But it doesn’t take a pandemic to create the need for paid family leave. As anyone who has ever cared for an infant can tell you, recovering from childbirth and keeping a newborn alive is a monumental (if common and joyous) health crisis all its own

Helping employees weather such transitions is far easier with a consistent government program than if businesses are left to find ways to support (or replace) employees on their own. As UrbanSitter CEO Lynn Perkins has pointed out in an article on her company’s experience with California’s paid family leave program, doing so would be even easier if the benefit were national. 

“At UrbanSitter, we use California’s FMLA as the standard for our leave policy. With employees in four other states, we’ve had to navigate each employee’s leave to adjust for varying levels of state support and then supplement as needed. This has been challenging to execute as a small company, not to mention expensive, but we believe it has been the right thing to do,” she writes. “A nationwide paid leave program would cover much of the expense we’ve been bearing, allowing us to invest that money in growth opportunities for our company or to afford temporary coverage to ensure business continuity while the employee is on leave.”

The message from Perkins, the entire rest of the world, and the latest research to business owners concerned about the impact of national paid family leave is simple: Don’t knock it till you try it.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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