The Damages of Paid Maternity Leave
The lower employment rate for young women in countries that mandate paid maternity leave is not worth it. In many western nations some form of maternity leave is mandated by the government for companies to provide it’s employees. The cons in this case far out weight the pros. Mandate paid maternity leave varies from nation to nation that mandate it. In some nations it is a very small amount of paid leave while in others, like the Scandinavian countries close to a year or more is offered. While in the United States there is not mandated paid maternity leave. In the United States we have 12 weeks of unpaid leave offered and protected by the government by the FMLA (Family and Medical Leave Act). What makes the leave offering here so different from many other western nations is that no pay is deemed mandatory and the short amount of time. Many in the political realm feel that this is an outrage of some kind and that we, here in the United States, need to correct this issue. What those calling for a change in the policy fail to look at is how much these policies damage not only employment rates among young women but also how these policies interfere with the free market and strip firms of a benefit they can offer that would attract better candidates for jobs offered. Mandated paid maternity leave hurts women, families and companies. (Hanel, 2013)
Out of, what are considered to be the ten best nations with paid maternity leave only three of them have a higher employment rate for women 15-24 when compared to the United States. Those nations are, Norway at 50.1, Denmark at 60% and Iceland at 78.2%. The United States sits at 48.9% employment for women 15-24. The rest of the nations are pretty poor in comparison, outside of Sweden at 46%. (FRED Graph) The lowers employment rate for nations to have what is considered to be in the top ten of those with paid maternity leave is Belgium with 21.4% employment rate for women aged 15-24. (Ganji, 2008) What this shows us is that firms are unwilling to hire women at a staggering rate as the amount of money the firm may lose is much higher and the cons of hiring a woman are then more than what an employer is willing to put up with. This unwillingness to bring on more women in the workforce hurts not only women but families too. Now a woman that could have entered the workforce with the skills she had is finding it harder and harder to do so as she has to be guaranteed a benefit that an employer may not want to put up with. This makes it harder for them to find jobs, which hurts the income for families. This benefit that is mandated in many western nations hurts more women then it helps.
Many will say “But look there are nations that have higher employment rates among women with better benefits! What say you on that?” True, as pointed out there are three nations in the top 10 with the best benefits that have higher employment rates among young women. The retort to this argument is two fold. First, Denmark is ranked higher on the economic freedom scale when compared to the United States. (Country Rankings) Second, Norway, which is lower on the economic freedom scale, has been seeing a decline in young female employment and at the current rate will dip below the United States in a year or two. The out lier is Iceland, as the nation enforces quotes on companies to higher so many women on a percentage base. (Hertz, 2016) So the focus will shift to Denmark. The Danes are considered to be a more economically free nation when compared to the United States based on a few things, lower entry cost point when entering new markets, this allows smaller firms a better chance to compete in the market place. The Danes also don’t have a minimum wage, this allows the employers to pay the workers what they feel they should pay them. (McLaughlin, 2009) This allows low skilled workers a better chance at finding employment and allowing all workers and better chance at selling their labor for a price the market deems fit, not the government. Young workers are the lowest skilled ones and this negotiating advantage gives them a better chance at holding a job.
Mandated paid maternity leave may sound great on the surface but when we dig deeper we see how these policies harm the young women of nations that implement them by ways of less employment and overall lower wages. This policy sounds like such a great idea but at what cost are people willing to pay for it? The answer seems to be extremely low young female employment, hurting women and families. The price paid, to this author, doesn’t seem worth it. When this price is paid for the next 20…30….40 years what will the female work force look like in countries like Belgium? Where only 21% of young women are able to find employment. Will they ever get the skills they need to be able to increase their human capitol and hold not only more but better paying jobs in the work place? Time will tell but for now it looks like that isn’t the case.
Works Cited:
Country Rankings. (n.d.). Retrieved May 21, 2017, from http://www.heritage.org/index/ranking.aspx
FRED Graph. (n.d.). Retrieved May 21, 2017, from https://fred.stlouisfed.org/graph/?g=dE6V#0
Hanel, B. (2013). The Impact of Paid Maternity Leave Rights on Labour Market Outcomes. Economic Record, 89(286), 339-366. doi:10.1111/1475-4932.12057
McLaughlin, C. (2009). The Productivity-Enhancing Impacts of the Minimum Wage: Lessons from Denmark and New Zealand. British Journal Of Industrial Relations, 47(2), 327-348. doi:10.1111/j.1467-8543.2009.00726.x
Gangji, A., & Plasman, R. (2008). Microeconomic analysis of unemployment persistence in belgium. International Journal of Manpower, 29(3), 280-298. doi:http://dx.doi.org.ezproxy2.apus.edu/10.1108/01437720810878923
