Labor Secretary Says Paid Leave Would Boost Labor Force Participation

By Susan Jones | October 21, 2014 | 8:44 AM EDT

President Barack Obama and Labor Secretary Thomas Perez (AP Photo)

( - Paid leave will improve the nation's labor participation rate, currently at record lows, Labor Secretary Tom Perez said on Monday.

"It is a sleeper issue that will sleep no more," Perez told a gathering at the National Press Club.

"Every first Friday of the month, the most frequently asked question I get, 'What can you do, Tom, to increase labor force participation?' Well, let's talk about paid leave and let's compare the United States with Canada," Perez said.

"The labor force participation rate of women ages 25 to 54 in the year 2000 in the U.S. and Canada was virtually identical. Today, Canada is ahead of us by roughly 8 percentage points, in large measure because they have generous paid leave laws and they provide affordable access to affordable child care.

"If we had simply kept pace with Canada over these years, we would have 5.5 million more women in the workforce. The innovation economy would be enriched by this reservoir of human capital. Sectors that have serious gender gaps, like the Silicon Valley, Wall Street, and elsewhere, would have additional talent to tap."

As reported, a record 92,584,000 Americans 16 and older did not participate in the labor force in September, as the labor force participation rate dropped to 62.7 percent, a level it has not seen in 36 years, the Bureau of Labor Statistics reported on Oct. 3.

The participation rate is the percentage of the civilian, noninstitutional population that participated in the labor force by either having a job or actively seeking one.

In September, the Congressional Budget Office reported that "most of the decline" in the labor force participation rate since 2007 is attributable to "long-term trends, especially the aging of the population," as well as the "slow recovery of the labor market that led workers to become discouraged and permanently drop out of the labor force."

In other words, the jobs simply weren't there, whether they offered paid leave or not.

The CBO report says nothing about the lack of paid leave being a drag on labor force participation.

Perez on Monday noted that the United States is the only industrialized nation where paid leave is not the law of the land. He called it "good economic policy and good family policy" and an "essential" factor in thriving businesses and flexible workplaces.

"So why can't we figure it out here in the U.S.?" Perez asked. "Why are we making people choose between the job that they need and the family that they love? Why aren't we giving people more tools to be attentive parents and productive employees? And how can we say that we continue to be for family values when so many people have to jeopardize their economic security to take a few weeks off to have a kid?

"I've said before, America works best when we field a full team, and there's lot of female talent on the bench," Perez continued. "And that's not right. And here's the rub. When you get those 5.5 million more women off the bench and into the game, we increase GDP by an estimated 3.5 percent, which translates to more than $500 billion of additional economic activity.

"So we're essentially, by our inaction, leaving significant amounts of money on the table because we're not leading on leave."

Perez said paid leave is not a women's issue, it's a family issue. "So the bottom line is, for the good of our families and the strength of our economy, we need to lead on leave."

In his speech, Perez also lobbied for a higher minimum wage, immigration reform, and labor unions.

Sponsored Links