FAMILY Act Would Deny Benefits to One-Third of New Parents


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Regular readers will know that I have long had problems with the FAMILY Act, which is the leading paid leave proposal within the Democratic party. One of those problems, which I’ve never been able to quantify, is that the FAMILY Act’s eligibility requirements clearly exclude a large share of new parents from the program’s benefits. Earlier last month, the CBO confirmed this reality and put a hard number on it for the first time: 30 percent. That’s the percentage of new parents who will not meet the work history requirements to receive benefits while they take care of their newborns. This is a disaster and needs to be fixed.

To be eligible for benefits under the FAMILY Act, parents need to have worked for at least 6 quarters, worked for half of the quarters since their 21st birthday (up to a maximum of 20 quarters), and worked in the 12 months prior to giving birth. This means that parents who have children prior to joining the labor force, such as those still in education, will be ineligible. It means those who have just joined the workforce, such as recent high school and college graduates, will be ineligible. And it means parents who have been out of the labor force for the last year, whether due to long-term unemployment or caregiving or any other reason, will be ineligible.

The CBO calculates that these exclusions will keep one in three new parents from being eligible for paid leave benefits. They do not break down the socioeconomic and demographic profile of the excluded, but it is not hard to see that these are going to be disproportionately poor people and also very likely disproportionately nonwhite. It is like the initial exclusion of agricultural and domestic workers from Social Security all over again.

In addition to the unfairness of excluding one in three new parents who are also disproportionately poor, it is also not a good idea for the project of iteratively building social democracy to pass a paid leave proposal that people are excited to use and then have one in three of those who try to sign up be denied. You get people on board with a social democratic agenda by giving them a taste of its glories and telling them there is more where that came from, not by frustrating them with pointless exclusions that leave them unhappy and let down.

Thankfully, this is an extremely easy problem to solve. Right now, the FAMILY Act sets the minimum monthly benefit at $580. I think this is too low, but we can put that quibble aside for now. To ensure all new parents receive benefits, all you have to do is amend the statute to say that this $580 minimum monthly benefit will also be available to the 30 percent of parents that do not meet the work history requirements. This is typically how social democratic income-replacement programs are designed: a basic amount that everyone is eligible for plus an earnings-related amount for middle and higher earners so that they do not suffer a significant income decline.