If there’s a central lesson of the COVID-19 pandemic it’s this: When more than half of U.S. workers cannot afford to stay home when they’re sick, all Americans’ health and financial stability is at risk.
The evidence has never been clearer that the country needs a permanent, comprehensive solution for providing paid family and medical leave to all workers, according to Jamie Kalamarides, president of Prudential Group Insurance.
“COVID-19 is a wake-up call for change,” Kalamarides says. “This pandemic opens the door to confront this challenge and fundamentally improve society by tapping into America’s long and successful history of public-private partnerships.”
Kalamarides outlines the urgency in addressing the inequities born of the current patchwork of paid family and medical leave in his new paper, “Paid Family and Medical Leave: Opportunity for a Public-Private Partnership.”
Where the U.S. should be a leader, it lags behind other developed countries with robust paid leave programs, according to his report. The 1993 federal Family Medical Leave Act established unpaid leave, but 37% of U.S. households are liquid asset poor and cannot afford to miss a paycheck. Without an income, these households do not have enough cash or savings to survive at the federal poverty level for three months.
In the absence of federal action, states and employers, including Prudential, have taken the lead to provide paid leave programs, often through short-term disability insurance.
The experience of these states and employer-sponsored programs demonstrates the benefits to workers, employers, and society, Kalamarides says. Employers have seen that healthy, financially secure employees are more productive employees. In addition, 10 years into California’s program, the vast majority of the state’s employers — 87 percent — reported no added costs from their programs.
This piecemeal approach, however, has resulted in unintended consequences. Most concerning, it has served to only deepen inequities, according to the paper.
One-third of the nation’s lowest-paid private sector workers have access to paid sick leave, compared to 93% of the highest paid workers, the paper details.. In addition, black and Latino workers are less likely than white or Asian American workers to have any leave benefits at all.
Meanwhile, infrastructure exists for an all-inclusive national system by leveraging the private sector’s experience and capacity. The sector could both underwrite the insurance with its capital reserves and manage aspects of program administration, Kalamarides says. This partnership would allow existing employer-sponsored programs to continue, while extending a public option for those without coverage.
And ramping up a national program could spur cost efficiencies through reliance on the sector’s existing technology and expertise in risk pooling, absence management, return-to-work programs and administration.
The industry has invested in efforts that have proven effective in reducing the duration of medical leaves, he points out. Getting workers back on the job sooner serves everyone’s financial interests.
The clock is already running. The nation’s latest move with the Families First Coronavirus Response Act is a step in the right direction, but it’s a short-term solution, Kalamarides says. The COVID-19 emergency leave program only applies to some workers and expires at the end of 2020.
The COVID-19 pandemic has the power to coalesce public opinion and bipartisan political support for a permanent, public-private solution, Kalamarides believes.
“Prudential has been a leader on issues that serve the financial wellness of Americans since its inception more than 145 years ago,” he says. “Doing so is at the core of our purpose to serve the greater good.”