Transcript Balancing Paid Work & Family

Balancing
Paid Work & Family
A growing share of the work force has
family responsibilities.
There are
(1) more two-earner families,
including those with small
children, &
(2) more single parent families.
Problems of
balancing
family demands
& employment
can occur
throughout the
life cycle.
• When workers are young
they often need to care for
small children.
• Later in life, workers may
need to assist teenage
children in solving problems
or help grown children
establish themselves.
• Workers may also have to
solve the problems of aging
parents.
The result may be reduced wages.
When workers
require a lot of time Since women often have greater
family responsibilities than
& energy for family
men do, the effects on women
responsibilities, less
are likely to be greater.
time & energy may
Some women respond to these
be available for
competing demands by taking
market work.
part-time rather than full-time
jobs.
Women who continue to work
full-time may face a significant
time squeeze.
Given women’s greater role as caregivers,
they would be the main beneficiaries of
family friendly policies.
Adoption of these policies would make it easier
for them to remain attached to the labor force
and succeed on the job, while meeting family
obligations.
This would, in turn, increase incentives for
women & employers to invest in women’s
human capital.
Men who already
shoulder sizable
housework & childcare
responsibilities would
benefit from family
friendly policies, & other
men would find it easier
to do a larger share.
So family friendly policies would be expected to
promote a more equal division of labor in the
household.
Conflicts between employees with & without
families usually disappear. Many employees
without children later have children & the
children of the other employees grow up.
Providing employees with scheduling
flexibility makes them more committed &
productive at work because they can balance
their lives.
Examples of Family Friendly Policies
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Family leave
Alternative work schedules
Flexible benefit plans
Policies for couples
Child care
Family Leave
Family leave allows workers
to take time off from their jobs
because of pregnancy,
childbirth, infant care, and
tending to ill family members.
Without such a policy,
workers may have to handle
these problems by giving up
their jobs, losing earnings, and
accrued benefits and seniority.
Because this policy makes it possible to deal with
problems without giving up the job, it increases incentives
for women to invest in firm-specific training and for
employers to provide them with opportunities to do so.
Family & Medical Leave Act of 1993
The FMLA allows eligible workers to take up to
12 weeks of unpaid leave for birth or adoption;
acquiring a foster child; illness of a child,
spouse, or parent; or their own illness.
During the leave, the firm must continue health
insurance coverage, & afterwards, the employee
must be given the same or an equivalent
position with the same benefits, pay, & other
conditions of employment.
The Family & Medical Leave Act applies to
public & private sector workers who have been
with the same employer for at least one year &
worked at least 1,250 hours.
The law only applies to firms with at least 50
workers.
A later study found that, for most employers,
compliance with the FMLA entailed few if any
costs.
Effect of Family Leave
on Employment & Earnings
Empirical evidence indicates that the FMLA may
have had a small positive effect on employment
and no effect on wages.
Additional leave provided by employers has had a
positive effect on both wages & employment of
women who become mothers.
Where leave is paid and of medium or long duration,
as in many other countries, there is some evidence
of negative effects on employment and earnings.
These effects may be attributable to depreciation
of human capital.
Alternative Work Schedules
• Provide greater flexibility for workers to take care
of family responsibilities and arrange their
personal lives more conveniently.
• Examples:
Flextime
Nonstandard work schedules
Part-time employment
Job sharing
Home-based work
Flextime
Allows some degree of variation in work
schedules at the discretion of the employee,
ranging from changes in starting & quitting
times to variation in the number of hours
worked per day, week, or pay period.
Nonstandard
Work Schedules
Employees work rotating shifts, weekends, or
nights.
Unlike flextime, these schedules are typically
set by employers rather than employees.
Part-Time Employment
Advantage: offers more flexibility
than a strict 9-to-5 schedule.
Disadvantage: frequently has
few fringe benefits (such as health care),
poor compensation,
& few opportunities for promotion.
Job Sharing
2 individuals sharing one
position
A disadvantage for the
worker is that he/she
only receives partial or
no benefits
Home-Based
Work
• Partly the result of
improvements in computers
and communications.
• Lower costs of transportation,
clothing, child care & elder
care.
• Need to have a formal
agreement between employer
and employee regarding
expectations.
• Often less can be accomplished
at home when there is someone
who needs frequent attention
during work time.
Flexible Benefit Plans
Allow workers to tailor their benefits to their
needs.
Examples:
• Cafeteria plans
• Flexible Spending Accounts
Cafeteria plans
Employer sets a predetermined amount for
employee benefits.
Employees select benefits worth up to that
amount from among a specified assortment.
Flexible Spending Accounts
Money is taken out of paychecks on a pretax
basis and is to be used by employees for
expenses such as child care.
Small firms are less likely than larger firms to
offer flexible spending accounts because
they are costly to administer.
Policies for Couples
When employers hire or transfer a
worker, they can assist two-career
couples by helping partners find employment.
Many anti-nepotism rules used to restrict the
hiring of relatives of employees. Hence, both
partners of a couple could not be hired, and if
two employees married, one would have to
leave the company. More recent anti-nepotism
restrictions are less severe; they frequently
prohibit an employee from serving as
supervisor for a partner.
Unmarried opposite-sex or same-sex couples are
at a disadvantage relative to married couples,
because they are usually not eligible for
benefits that are available to spouses.
Child Care
Child care subsidies make it easier for
mothers stay on a job.
So the subsidies increase the incentive for
mothers to take jobs that offer experience and
on-the-job training, since they will not have
their human capital deteriorate while they are
away from their job.
Child Care & Development Block Grant
Provides states with funds
to expand day care
services for low-income
families & to improve the
overall quality & supply
of day care.
Federal Tax Subsidies for Child Care
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Dependent Care Tax Credit
Child Tax Credit
Earned Income Credit
Flexible Spending Accounts
Dependent Care
Tax Credit
Employed parents receive a tax credit of 30% of
expenses up to $2400 for the care of one
child, & up to $4800 for 2 or more children,
for families with adjusted incomes below
$10,000.
The percentage is lower for families with higher
incomes.
Child Tax Credit
Was introduced in 1998, and provides $500
tax credit to families for each child under
age 17.
This credit is phased out when income reaches
$110,000, for married couples.
Unlike the Dependent Care Tax Credit, the
family receives it whether child care is
purchased or not.
Earned Income Credit
a refundable tax credit for low-income
families, which does not have to be used for
child care.
Flexible Spending Accounts
As discussed previously, this subsidy reduces
the tax liabilities for employees who have
access to such accounts and use them.
A small number of firms offer child care
benefits either through managed day care onor off-site, or by providing vouchers.
Employees usually pay at
least part of the costs of
On- or Near-Site
these facilities.
Day Care
They save the parents a
separate trip to take
children elsewhere.
The parents are nearby in
case of emergencies.
Children receive care
whenever the parent
works.
Few employers provide this care because it is usually
expensive. Construction or redesign of a building is
often needed, & licenses & insurance are required.
For school-aged children
Some federal support is being provided for AfterSchool Programs.
At these programs, students engage in supervised
recreational and educational activities, often in their
own school building.
A Family Policy Agenda to Enhance
Families’ Transactional Interdependencies
Over the Life Span
By Shirley L. Zimmerman
Three Trends
• Growing income disparities
• Increased labor force participation of mothers
with young children
• Increased life expectancy
Growing income disparities
The rich have become richer, the poor have
become poorer, and the middle has been
squeezed.
The richest 20% of the U.S. population had
slightly more than half of the nation’s income
in 1999.
In 1999, after-tax income was more heavily
concentrated among the most affluent than at
any time between 1977 & 1995.
One factor influencing the change in income
distribution is tax policy.
High income households have received
substantial tax cuts since the late 1970s.
In 1999, these households paid a considerably
smaller percentage of their income in federal
taxes than they did in 1977.
Heavily responsible for the increasing income
disparities are widening wage disparities.
In 2000, the typical chief executive of a large company
made (in salary, bonuses & stocks) approximately
11.9 million dollars.
This is almost four times as much as the average
earnings of 3 million dollars that comparable chief
executives made in 1992.
The average corporate executive
makes more in a day than the
typical American worker makes
in a year.
Non-Wage Benefits
Low-paid men are less likely than higher-paid
men to have pensions & employer-paid
health insurance.
This fact further contributes to the income
disparities.
Some factors contributing to the increase in
wage & income disparities include
• foreign competition;
• immigration;
• the decline of unions, which in the past have
helped to standardize pay within companies &
across industries;
• the declining real value of the minimum wage;
• technological change, which has adverse effects
on the earnings of low-skilled workers; and
• slowdown of the growth of the number of college
graduates relative to less-educated workers, which
worked to the advantage of the college graduates.
Working Mothers
& Child Care
Women in low-paying jobs lack the resources
to pay for child care.
They are forced to patch together arrangements
using relatives, friends, & neighbors.
When these arrangements fail, they undermine
the mother’s employment & create risks for
the children.
While most employees of medium & large
firms were covered by unpaid leave in
1996, only 10% received assistance with
child care.
In small firms, only 2% of all employees
received child care assistance, in the form
of on-site or off-site child care or funds to
subsidize such care.
Baby Boomers & Social Security
The oldest of the baby boomers (who were
born between 1946 & 1964) become
eligible to receive full retirement benefits
after 2011.
Estimates indicate that in the year
2029, the Social Security Trust
Fund will be sufficient to pay
beneficiaries only 75% of their
promised benefits.
Possible adjustments to keep the Social
Security System in tact include
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increasing the age of retirement from 65 to 70;
raising payroll taxes;
bringing all government workers into the system;
increasing the taxes on Social Security benefits
received by the wealthiest recipients;
• increasing the cap on wages from which payroll
taxes are collected; and
• reducing the cost of living adjustment (COLA).
Social Security Privatization
Because affluence is related to savings, Social
Security privatization plans would further
widen the income distribution.
Some consequences
of the widened income distribution
• growth of the prison population &
the costly criminal justice system;
• more homelessness;
• worsening job prospects of young men, which
discourages marriage & family formation;
• the inability of some men to support the children
they do father, which places the children at
greater risk of poor health & development; and
• reduced participation in the democratic process.
Voting
Between 1968 & 1996, the percentage of
the voting age population that voted in the
presidential election declined from 63% to
49%.
Possible Items for a Family Policy Agenda
• Labor law reforms to strengthen labor unions;
• Workplace reforms (such as profit-sharing) to promote
employee involvement;
• Tax law reforms to increase charitable activities;
• More progressive tax policies such as expanding the
Earned Income Credit & raising the income level
below which low-income families are no longer taxed;
• Improved scholarship programs, improved public
education, & the expansion of early childhood
education;
• Programs such as the creation of public service
jobs, and subsidization of low-wage jobs;
• Expansion of employer supported on-site day care
• Support for the unionization of care workers to
raise their status & income;
• Expansion of the Family & Medical Leave Act
(FMLA) to cover more workers & to finance paid
leave; and
• Creation of institutions & opportunity structures to
accommodate increasing numbers of retired
parents & grandparents.