Why Cities Should Offer Paid Sick Time

The Benefits of Paid Sick Leave

Newark, New Jersey just became the latest city to vote for paid sick-time for employees. Outside of Connecticut, where paid sick leave is required, only a handful of cities across the country require businesses to offer paid sick leave to employees. The United States is one of few developed countries not to require employees to receive paid sick leave, but there are a variety of reasons that we should change this.

It's The Right Thing To Do

Everybody get's sick. Like it or not, you are probably going to catch the flu or some other sickness at some point. Most people get sick at least a couple of times a year. For those of us working in positions that do not allow us to stay home when we are sick, the choice becomes whether to work while sick or to forgo a few days of pay and possibly be punished. If our expectation is that nobody will ever be sick, this is simply unrealistic. 

Paid Sick Time Keeps People Healthier

When employees are offered paid sick leave, they are less likely to come to work when they are sick. If sick employees are able to stay home, they are less likely to make other people sick. The spread of disease can be slowed this way and it can keep companies more productive; if everyone is sick, workplace productivity is bound to fall. 

Boost in Employee Morale

When employees feel valued by their employers, they are less likely to leave in pursuit of other positions. Ideally, we would want all companies to treat their employees with respect and try to ensure them a happy place to work. Employees are certainly happier with their jobs when they know that they are allowed a day off every now and then if they fall ill. Offering paid sick time could actually attract more workers to a given city or state. 

Exposing The Leisure Gap: Time vs. Money

We all know the stereotype of lawyers and high-level executives working six or seven day weeks, often for ten or more hours per day. But we also know that prestigious positions come with high salaries and lots of benefits. On the other hand consider those who work lower level positions. These employees are often paid hourly and are not encouraged to work more than 40 hours per week. The result of this matrix is that the rich end up with lots of money but no time to spend it, while the poor have lots of time but no money to spend. We will now examine whether this is truly a stereotype, or whether it is actually true.

First let us consider the fact that the United States differs sharply from other western nations. In Europe, most employees get more than four weeks of vacation per year, in the United States, the average employee gets 12 days off per year. Interestingly enough, Americans, like the Japanese, do not use all of their vacation days. Note the photo below that shows the difference between America and Europe. Fifty years ago, this tendency for Americans to work more than Europeans did not exist.

Now it is important to look at the differences that exist within America, comparing those at the top of the earning pyramid with those at the bottom.

Between 1985 and 2007, total leisure time for the most educated Americans, who typically earn the most money, declined by 1.2 hours to 33 hours per week. During the same period, leisure for the least educated Americans increased by 2.5 hours to 39 hours per week. Not only is there a significant difference between the highest and lowest earners, but this difference has increased rather than decreased over time. 

This difference may reflect the tendency for salaried employees to feel pressured into working longer hours as they obtain extra responsibilities. Employers try to squeeze as much work out of these high level employees as possible because they are a high fixed cost; working 40 or 80 hours per week makes no difference to the payout from the employer.

The wage gap may also be partially explained by this same phenomenon. The difference between the highest and lowest quintiles of wage earners in America is now greater than ever before. Companies wish to save money by hiring the fewest number of high salary wage earners. For example, a company needs 80 hours of work per week for a particularly challenging job. They could either higher two executives at $150,000 per year for 40 hours per week, or they could force one person to complete the work of two people over 80 hours and pay $250,000. The company sees an annual $50,000 cost savings theoretically without a decrease in quality. Because this is a standard practice, the employee takes the job with the high salary and becomes overworked.

Meanwhile, lower-level employees wages have risen only slightly over the past 30 or so years. During this time, gains in technology and education have allowed these employees to become much more productive. Some of the productivity gains are seen by salary increases, while others are forwarded to employees in the form of fewer working hours. Employers for hourly workers have no desire to work these employees for more than 40 hours per week because they will have to pay overtime. 

Will this trend continue over time, or will employers begin to reduce the working hours of the highest earners, therefore reducing the wage gap? Stay tuned for a post about why working more than 40 hours per week is actually less productive.