Bell releases report on paid sick leave, endorses #300

http://bellpolicy.org   October 3, 2011

The Bell Policy Center today is releasing a studyon existing research on paid-sick-leave laws.

“The evidence clearly shows that allowing workers to stay home when they or their children are sick will help families and improve public health in Denver,” said Wade Buchanan, president of the Bell. “The experience in cities that already have paid-sick-leave laws shows the costs to businesses are modest and manageable – and largely offset by improved productivity and reduced turnover.”

Based on the research, the Bell Policy Center is endorsing Initiative 300 and urges Denver residents to vote “yes” on Nov. 1.

Bell researchers reviewed a range of studies and reports as well as data from San Francisco and Washington, D.C., the two cities with the most experience with such laws.

Key findings concerning public health include:

  • More than four in 10 private-sector workers in Denver lack paid sick leave. The total number is approximately 107,000.
  • Workers who lack paid sick leave are more likely to come to work sick, send their children to school while sick, recover more slowly from illnesses, and rely on expensive visits to emergency rooms than are workers with sick leave. The net effects are higher rates of infection and increased health care costs.

According to Rich Jones, the Bell’s director of policy and research, “One of the striking things we learned was that during the H1N1 pandemic in 2009, despite the strong advice from health officials that infected people should stay home, up to 8 million Americans still went to work while infected. That meant 8 million more people were helping to spread a serious disease.”

Key findings concerning the effects on employers and jobs include:

  • The maximum direct cost of this law for a business with less than 10 employees is likely to be a one-time increase in base compensation expenses of 2 percent, assuming all employees exhaust all their paid sick leave. Data from San Francisco show that employees on average do not use all their sick leave, meaning the actual direct costs are more likely to be around 1.2 percent.
  • There is strong evidence that paid sick leave increases overall productivity and reduces turnover rates, resulting in average savings to employers that exceed the average costs of the law. Workers who work while sick on average cost employers more than those who stay home to recuperate.
  • More than 70 percent of San Francisco employers who responded to a survey reported no negative effects on profitability from the paid-sick-leave law. A small number reported finding ways to mitigate increased costs (including converting vacation leave to sick leave or delaying bonuses or wage increases).
  • U.S. Bureau of Labor Statistics data from the Washington, D.C., and San Francisco metropolitan areas show both cities’ job markets were actually stronger vis-à-vis their surrounding counties in the years after sick paid leave was implemented than they were in the years before implementation.

“The fact that these cities’ job markets were stronger compared to the neighboring counties after implementation does not prove any cause and effect relationship,” Jones explained. “But it clearly suggests the paid sick leave laws did not have the strong negative effects that opponents said they would. Whatever relatively minor effect they may have had did not result in a loss of competitiveness to neighboring communities.”

The Bell study was conducted by policy analyst George Awuor, Ph.D, with assistance from public interest research fellow Alec Arellano.

“We are committed to expanding opportunity in Colorado,” Buchanan said. “But it is important to do so in a smart way. We took time to look at the facts. We are convinced a paid sick leave law will greatly benefit workers and their families, as well as overall public health. And we are confident it can be implemented with little or no harm to businesses.”

“The benefits far outweigh the costs,” Jones concluded. “Passing Initiative 300 is clearly the right thing for Denver.”

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