The US ranks last in the world for paid parental leave. Here are 10 things to know about how that negatively affects economy, and why it's time to fix it.
The US is one of only three countries left in the world that do not guarantee paid maternity leave. The others are Papua New Guinea and Oman.
The closest thing we have is the Family and Medical Leave Act (FMLA), which became law in 1993 and allows qualified employees to take 12 weeks of unpaid, job-protected leave for specific family and medical reasons. Having a baby, or caring for an adopted child, falls under this category.
According to the Bureau of Labor Statistics, only 12% of Americans have access to the paid parental leave, which is considered a benefit by employers. Only 5% of low-wage earners receive paid maternity leave. Paid parental leave policies remain up to individual employers.
Let's take a look at some important facts about maternity and paternity leave in the US.
(Editor's note: On Feb. 15, 2019, we published this related article 10 tech companies with generous parental leave benefits.)
1. Women are struggling because of these policies
When women don't receive paid maternity leave, research has shown that they are more likely to drop out of the workforce, therefore losing income for themselves and their families. About 43% of women with children leave work voluntarily at some point in their careers. A 2014 New York Times/CBS News/Kaiser Family Foundation poll of nonworking adults aged 25 to 54 in the United States showed that 61% of women said family responsibilities were why they weren't working, compared to 37% of men.
SEE: How CXOs can develop a diverse workforce (Tech Pro Research)
Or, on the other hand, a mother can go back to work too quickly, which could be harmful to her or her baby's health. That gives her less time to bond with her child, increases her risk of postpartum depression, and also makes breastfeeding — which is incredibly beneficial for the baby's health — much more difficult. About 25% of women go back to work 10 days after having a baby.
2. Only four states have publicly funded paid maternity leave
California, New Jersey, Massachusetts and Rhode Island now have paid maternity leave laws. California offers new mothers up to six weeks, at 55% of their salary. New Jersey offers six weeks and two-thirds of salary. Rhode Island pays four weeks at 60%.
The Department of Labor recently expanded its program to promote more paid leave, and awarded $500,000 in grants to Washington D.C., Massachusetts, and Montana to implement and assess public funding for paid leave. It gave more money to Rhode Island to evaluate its existing program. The Department of Labor also has a social media campaign for paid leave: #LeadonLeave.
3. FMLA isn't helping very many people
FMLA only covers 59% of US workers. The 12 weeks of unpaid family leave offered by this program is for women who worked 1,250 hours during a year for a company that employs 50 or more people. Two in five women do not qualify for leave under FMLA, according to the Center for Economic and Policy Research. That's any level job — low-wage or high.
And, there are a high number of workers who are eligible for FMLA leave and don't take it — 64% of women and 36% of men, according to the Department of Labor. As of the end of March 2015, FMLA now includes same-sex couples, after a long battle over the issue.
4. Our maternity leave policies contribute to the gender pay gap
There is a much smaller wage gap when women and men first enter the workforce right after college. But, it is widely documented that as women move through the workforce, get married, and have children, the gap widens.
The average age for an American woman to have her first child is 26. About 47% of the workforce is women, and women comprise two-thirds of the low-wage workforce. According to the Bureau of Labor Statistics, about 64% of mothers with children under six worked in 2013. In 40% of households with children under 18, women are the primary breadwinners. And more often, women are delaying marriage and children to have a career.
When it comes down to it, a woman's childbearing years and peak earning years coincide, and that has a big effect on her earnings. A University of Massachusetts study found that for every child a woman has, her salary decreases by 4% — and that penalty is worse for low-wage workers. But for men, fatherhood increases earnings by more than 6%.
5. The policies are also contributing to the income gap
Because maternity leave policies are left up to private corporations and not the government, a specific population is benefitting from them, and low-income workers are being left out. When it comes down to it, the ability to adjust to motherhood (or fatherhood) and learn to care for a child is a luxury only some people can afford.
Some high-dollar markets, like the tech industry seem to be making strides with leave policies, but low-income workers don't have access to the same types of policies. And even with FMLA, at least 40% of workers are excluded from the small benefits it offers, according to the Council of Economic Advisors.
6. The policies need to be inclusive
The US is far behind the 78 countries with paid paternity leave laws, and many policies don't include parents who adopt children or have a surrogate. In an in-depth look at this issue in early January, Bloomberg Businessweek found that when companies offer leave to fathers, it decreases the likelihood that employers will stigmatize young women and not hire them, and the requests from men to take that leave increase — in California, 26% of men use it.
7. Paid leave is good for business
According to a 2011 study by California's Center for Economic and Policy Research after the state implemented paid leave, 91% of businesses said it had a positive effect on profitability or no effect at all — that is, it didn't show any disadvantages whatsoever. It just makes good economic sense, and not just for women. Economists have found that when people are offered paid leave, they take it, which lessens their likelihood to drop out of the workforce completely. And this is especially true for low-income parents, who can't afford to take unpaid leave (if they're even afforded it under FMLA). Research shows that women who have paid maternity leave have a higher chance of returning to work.
8. Tech giants have some of the best maternity leave policies in the US
Google is one of the leaders in this realm. Susan Wojcicki, the CEO of YouTube, wrote about her experience in the Wall Street Journal last year, detailing that she was the first employee to go on paid maternity leave at Google. In 2007, Google increased paid maternity leave from 12 weeks to 18, and she said "the rate at which new moms left Google fell by 50%." They also increased paternity leave to 12 weeks.
Other research shows that other tech companies have decent maternity leave policies as well. Facebook, for instance, offers equal time off for all parents, and a $4,000 bonus for baby care. Apple offers four weeks off before birth and 16 weeks after, and fathers and adoptive parents can take six weeks off. Yahoo offers 16 weeks of paid time off for mothers, and eight weeks for fathers and parents of adopted children. Instagram and Reddit offer 17 weeks to mothers, and Twitter offers 20, and all offer paid time off to fathers and adoptive parents.
9. President Obama is trying to make it national policy
At the end of 2014, Obama gave federal employees six weeks of paid leave when they become parents, and has touted paid parental leave as an economic matter for the country. But, his plan of six weeks still offers much less than other industrialized nations. Denmark offers a year. Italy offers five months. France offers 16 weeks. Mexico offers 12. Afghanistan offers 13. A Pew research report in 2013 looked at 38 countries and found that the average fully-paid time off for new mothers is five to six months.
10. Companies are slowly making better policies
As the conversation about paid maternity leave continues, more companies are starting to make changes. In March, telecommunications company Vodafone announced its 30 companies around the world would have to provide 16 weeks of paid maternity leave, and enact a policy that women can work 30 hours a week for full-time salary for six months after that. That policy is unique, maybe the first of its kind. And it's less odd than Facebook and Apple offering to freeze eggs.
None of the changes companies are making are exactly lush or comforting, or even comparable to other countries' national policies, and only federal and/or state laws for paid maternity leave will help all Americans. But, they are a move in the right direction.