Moms Should Not Have To Choose Between Taking Care Of Their Children Now And Retirement Later
Americans need paid family leave. That’s not even a question. But is the best solution to this problem letting parents use retirement funds early?
Out of 41 developed nations the U.S. is the only one that doesn't guarantee paid parental leave for workers who need to take time off for pregnancy or after giving birth or adopting, according to data from the Pew Research Foundation. Currently, under the Family and Medical Leave Act (FMLA), parents can take up to 12 weeks of unpaid leave but this only works for people who can afford to lose three months’ wages (plus, some companies are exempt from the law). More often than not, this forces parents into making terribly difficult decisions, trying to balance their family’s needs for care with their need for money. And it’s taking a serious toll; every year working families lose more than $20 billion in wages because they aren’t able to take paid family or medical leave, according to 2016 data from the Center for American Progress.
White House adviser Ivanka Trump even established it early on as a priority for her father’s administration in a letter she wrote to the Wall Street Journal in July of 2017. "Providing a national guaranteed paid-leave program — with a reasonable time limit and benefit cap — isn't an entitlement, it's an investment in America's working families," she wrote.
Ivanka, along with Senators Joni Ernst (R-IA), Mike Lee (R-UT), and Marco Rubio (R-FL), thinks they have found the solution. The plan is based on one put forth by the Independent Women’s Forum, a right-wing women’s group funded by the Koch brothers, and appears to be an ingenious a way to offer paid time off...without actually giving moms paid time off.
The way it would work is that moms who need time off for the birth or adoption of a child would be allowed to take money out of their Social Security accounts early, to replace income lost during the leave period, explains Shilpa Phadke, vice president of the women's initiative at the Center For American Progress. They then would have to delay retirement by at least six weeks, working later in life to make up for the funds they used earlier.
This is problematic for several reasons, Phadke says. First, it’s based on the social security program which is already financially unstable. In addition, it would only provide about 45 percent of wages for the average worker, far too low to make it worthwhile for many families, according to the IWF.
Then there’s the separate issue of jeopardizing parents' future retirement. Over half of all Americans have nothing saved for retirement and less than $1,000 in savings, according to CNBC and 43 percent of people said they were relying solely on social security benefits to live on during retirement, according to a Gallup poll. All of which means it would be a really bad idea for most parents to take out social security funds early.
This issue disproportionately affects women, she adds.
“Women have lower monthly Social Security retirement benefits and lower private retirement savings than men, and they also take leave more often and for longer periods of time,” she explains. “They are also more likely than men to face caregiving penalties on lifetime earnings.”
The IWF solution is just one of many being considered and no decisions have been made yet, the Trump administration said.
“President Donald Trump received applause when he said that the nation needs paid leave but instead of pursuing a meaningful, comprehensive paid family and medical leave program, the Trump administration and Congress continue to put forth half-measures and irresponsible plans that fall short of what working families need,” Phadke says. “[Parents] should not be forced to choose between caring for their families and jeopardizing their future economic stability.”
New York Sets the Bar High With New Paid Family Leave Act
20 Companies Leading the Charge With Impressive Parental Leave Policies