Epstein on the long-term consequences of paid sick leave

By: Emily Makings
12:00 am
April 16, 2013

In a good column today, law professor Richard Epstein writes about paid sick leave mandates:

The unintended consequence of paid-sick leave legislation, whether in New York City or elsewhere, will be to block the creation of new jobs by limiting the deals that employers and employees are lawfully allowed to make with each other. . . .

The proponents of the legislation should take the fierce resistance of employer groups as a warning signal. Remember, it takes two sides to make a contract. Good policies satisfy both sides to the bargain. Only where there are mutual gains from trade is the deal stable for both sides.

There are many good reasons why sensible employers might offer paid or unpaid sick leave to some or all of their employees: generating loyalty or increasing productivity, for example. But it would be a major policy mistake to insist that just because  some employers offer these benefit packages, a large number of other employers should be required to do so as well, even when it makes no economic sense for latter group. . . .

If the putative benefits of paid sick leave are overstated, its proponents will fail to recognize any of the long-term economic dislocations it will cause.

Seattle mandates paid sick leave — we wrote about the policy in this brief (see page 6). Bills were also introduced in the legislature this session on the topic: HB 1313 (passed by the House Appropriations Committee March 1) would mandate paid sick leave for the state (I wrote about it here), and ESB 5726 (passed by the Senate March 11) specifies, in response to Seattle’s ordinance, that a city cannot require employers to provide paid sick leave unless they are located within the city.

Categories: Categories , Current Affairs , Employment Policy.