text: Businessweek Archives
  
  Make Family Leave Affordable For The Poor
  
  August 08, 1993
  
  Editorials
  
  MAKE FAMILY LEAVE AFFORDABLE FOR THE POOR
  
  The Family & Medical Leave Act of 1993, intended to promote "the stability and economic security of families," goes into effect on Aug. 5. Its federal mandate of 12 weeks of unpaid, job-guaranteed leave for family and medical purposes is long overdue. The trouble is, many low-income women can't afford to take such a break--typically maternity leave--even for just 12 weeks, which is about half the time most major corporations allow employees. The key to making sure low-income women take time off is the provision of some form of wage replacement.
  
  The Families & Work Institute in New York notes that poor women take less time off work after childbirth--and are less likely to take the medically advised minimum six weeks--than middle- and upper-income women. Today, only five states--California, Hawaii, New Jersey, New York, and Rhode Island--require that employees be enrolled in temporary disability insurance (TDI) plans, which extend partial wage replacement during disability, including pregnancy.
  
  Employers may worry about piling the cost of wage replacement on top of unpaid leave. But unpaid leave is not especially costly: The General Accounting Office estimated that 908,000 employees a year would take leave under the new act to care for babies, at a total cost to the economy of $244 million annually. For individual employers, this averages $269 per leave taken, or $10 per worker covered.
  
  Partial replacement of wages would certainly raise the bill. Even so, there are ways to pay. First, TDI could be adopted by all states and financed through employee contributions, employer contributions, or a combination. A second possibility might be to extend the unemployment compensation system to cover temporary maternity absences. Again, employees could pick up part of the tab. Finally, a special benefit might be awarded to families with new children. In all such cases, federal law might set an income cut-off above which wage replacement would be unavailable. This, too, could limit the cost--but still give poor people the means to use a very important benefit.