Building an Economy that Works for Everyone

Examining the Benefit: Paid Sick Leave in Milwaukee

On Election Day, voters in the City of Milwaukee overwhelmingly approved a referendum updating workplace standards. It requires employers to offer paid sick leave to all full-time employees; making Milwaukee the third city in the U.S. to do so.

The overwhelming support for city-wide paid sick leave comes from research and case studies, showing paid sick leave programs benefit both employers and employees.

A recent study by the nonpartisan Institute for Women’s Policy Research (IWPR) found significant economic benefit to both parties when paid sick leave was made available.

Paid sick leave gives workers time to visit a doctor before symptoms worsen, allows time off for an employee to recover rather than spread an illness around the workplace, permits the care of a sick child or family member, and reduces turnover and hiring/training costs for businesses. It also boosts workplace morale, increasing productivity and customer satisfaction.

The resulting cost reductions? The report estimated a total savings of $15 million per year for businesses and $1 million per year for employees. Not to mention secondary benefits resulting from a happy and healthier lifestyle.

But not everyone is happy.

The Metropolitan Milwaukee Association of Commerce (MMAC) is arguing the law is neither fair nor legal; and they plan to sue. They argue the law will make it difficult to run a business, and put undue pressure on small business owners.

Their logic erroneously assumes that paid sick days are a zero-sum game – i.e., a benefit to an employee must result in harm to the employer. In fact, the evidence shows the opposite is true.

As any economist will tell you, zero-sum games occur only when the amount of a resource (in this case, productivity) is fixed. And since productivity has been proven to positively increase in proportion to paid sick days, we can safely disprove that logic.

The city of San Francisco, which mandated paid sick leave in 2007, is a real-life case in point. Since passage of the new law, businesses have benefitted from strong job growth that has outpaced nearly all nearby metropolitan areas. The authors of that study concluded:

The strength of San Francisco’s job market since implementation of the paid sick days policy suggests that, like minimum and living wages, adoption of this minimum labor standard does not adversely affect job growth.

As of this year, 47% of Milwaukee’s private-sector workers (122,230 employees) do not have paid sick days. The numbers in Washington State are similarly disappointing.

It’s time to recognize paid sick leave is not a corporate benefit—it is a basic right of workers everywhere. Protecting the health and wellness of employees is good for business, promotes hard work and guarantees a strong American economy.

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