Friday, March 11, 2011

Guest Post: Philadelphia Chamber of Commerce Cries Wolf Over Earned Sick Days

Yesterday, the Daily News published an ominous Chamber of Commerce op-ed piece, warning against the earned sick days bill passed out of committee last week. The article prophesized a disturbing mass of unintended consequences: job losses, shuttered businesses, and slashed benefits.

Sound familiar?

It should. Business groups routinely oppose new worker-friendly legislation—from the minimum wage to family leave—with apocalyptic economic rhetoric. The Philadelphia business lobby’s opposition to the earned sick days bill, which would allow workers to earn five to nine annual paid sick days, is nothing new.

Rather than just making fretful predictions, we should look at empirical evidence gathered from successfully implemented paid sick leave bills. San Francisco’s earned sick leave law, which the Philadelphia bill is based on, has received accolades from both employers and workers. Guaranteed sick pay has had no discernable impact upon employment in the city, while profits and benefits have only been marginally affected.

A recent study by the Institute for Women’s Policy Research (IWPR), based on interviews with over 700 employers, shows San Francisco businesses reporting overwhelmingly positive experiences with the new law. Two out of every three firms labeled themselves “supportive” or “very supportive”. The lowest levels of support were found in sectors where paid sick leave was less common before the law, like food service and retail, but even 60 percent of those employers approved of the measure. Over 70 percent reported that the law had no impact on their profitability.

Philadelphia business lobbyists specifically warn that guaranteed sick leave will cost workers benefits and jobs. But the IWPR study found that only 14.1 percent of San Francisco employers reduced compensation and benefits to accommodate the law, mostly through converting vacation days to sick leave (7.1 percent) or reducing bonuses and raises (7.1 percent). These miniscule numbers are well worth the 16 point bump in sick pay coverage the city experienced, especially among food service workers (who represent a danger to public health if they bring an illness to work).

A 2010 study by the Drum Major Institute shows that San Francisco’s paid sick leave law didn’t cause significant job losses in the city either. Despite Bay Area business lobbyist’s doom-and-gloom predictions, the city’s employment level continued to outperform those of the surrounding counties (which include wealthy Silicon Valley)—just as it had before guaranteed paid sick leave. If job killer predictions were accurate, we’d expect to see markedly heavy losses among industries most profoundly affected by the law. But San Francisco-area employment continued to be stronger than the surrounding counties in retail, hospitality and food service industries.

But the Chamber authors argue that Philadelphia can’t be compared to San Francisco. Apparently, we’re a special case due to “a high tax burden”, “a tough regulatory climate” (no specific numbers are mentioned) and unusually high unemployment (Philadelphia’s unemployment rate is little more than a point higher than the national level, just as it has been for the last decade).

That’s bunk. San Francisco’s labor laws are much tougher than any we have in Philadelphia. Their minimum wage is $9.92, well above Philadelphia’s $7.25. San Francisco businesses are required to pay a certain amount towards employee healthcare programs, or face a tax. If the vast majority of San Francisco employers can handle paid sick leave in the face of requirements like these, then Philadelphia business owners will do just fine.

Business owners tend to be small “c” conservative: Afraid of any change and eager to keep conditions stable, and uncomplicated. That’s fine. But we shouldn’t let their status quo bias prevent us from protecting our citizenry.

Jake Blumgart is a Philadelphia-based researcher with the Cry Wolf Project, funded by the Ford Foundation and the Public Welfare Foundation. His work has been published by the American Prospect, the Philadelphia Inquirer, The Stranger, and Campus Progress.

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