Actually, paid sick leave might not be too expensive for restaurant owners
AP Photo/Carolyn Kaster
AP Photo/Carolyn Kaster
New research shows it is much less costly than expected, and comes with added benefits for restaurants and other employers.
On Tuesday afternoon, Republican Senator Lamar Alexander of Tennessee blocked a bill that would, if passed, immediately require employers to grant workers 14 days of paid sick leave in response to the coronavirus pandemic. The bill was brought to the floor by Democratic Senator Patty Murray of Washington, who made the case that it would provide an economic lifeline to workers and encourage them to take time off if they or their families were exposed to Covid-19, as the illness is known.
“For many of our workers, restaurant workers, truck drivers, service industry workers, they may not have an option to take a day off without losing their pay or losing their jobs,” Murray said. “They may not have an option to take a day off without losing their pay or losing their jobs, and that leaves them with the impossible choice between putting food on their table and paying the bills.”
Lamar’s alleged objection was grounded in concern for business owners, and whether the cost of paid sick leave would be prohibitive.
But mandatory paid sick leave might not be as costly to companies as Alexander suggests. According to a new, first-of-its-kind economic analysis on the impact of state-level paid sick leave policies, researchers found that local versions of the policy increase the proportion of the workforce covered by paid sick leave by 20 percent and encourage workers to take an average of two days off for illness per year—all at the cost to employers of about 20 cents per hour worked by an employee. The study was published this week by the National Bureau of Economic Research.
Only 45 percent of workers in the food service sector get paid sick leave, compared to 73 percent of overall workers.
“We found this very interesting because one of the concerns about paid sick leave is that it’s going to impose a lot of costs on employers, [that it’s] just going to hurt the bottom line,” says Catherine Maclean, one of the authors of the study. “We’re not finding that employees are using massive amounts of paid sick leave and we’re not seeing extremely high costs to employers.”
The study is centered on a robust dataset. Maclean and her team used confidential compensation data submitted by a nationally representative sample of employers. Collected by the Bureau of Labor Statistics (BLS), these figures go on to inform how the federal government sets wages for its own employees.
Using these responses, the paper’s authors examined how compensation packages changed for workers in states like Connecticut, Massachusetts, and California, before and after state-level policies mandated that employers provide paid sick leave. Not only did coverage rise, but they found that employers did not have to compensate for providing the benefit by taking away others, such as paid vacation time or paid parental leave. Maclean noted that the study doesn’t account for increased productivity—or perhaps most significantly, a reduction in the number of workers that come in sick and infect their colleagues and customers.
These findings come at a moment when many companies in the food system—from restaurants to food delivery startups—are scrambling to enact makeshift paid sick leave policies in light of the spread of Covid-19. Darden, the parent company of Olive Garden, announced it would begin offering workers the ability to accrue paid sick leave. (Reminder: In the past, the extent to which Darden gave its employees a safety net in the case of illness was allowing them to donate “spare change” from their paychecks into a rainy day fund for one another. The program was called Darden Dimes.)
“We are all occupying bodies that are equally vulnerable to the actual virus—but that vulnerability is painfully structured by social inequality.”
Others including Walmart, Instacart, DoorDash are instituting paid sick leave benefits, too, though such policies don’t seem to apply to the large contingent of gig economy workers that keep food delivery startups running. According to BLS, only 45 percent of workers in the food service sector get paid sick leave, compared to 73 percent of overall workers.
“Because there are a lot of food service workers who are hourly workers, who are part time workers, who maybe go from job to job,” says Sherry Leiwant, co-founder of A Better Balance, an advocacy group that lobbies for paid sick leave. “That sector of the economy has never been good about providing basic benefits, like sick time.”
Some researchers have argued that more equitable access to benefits like paid sick leave and fewer barriers to healthcare is also a crucial public health safeguard.
“We are all occupying bodies that are equally vulnerable to the actual virus—but that vulnerability is painfully structured by social inequality,” says Matt Sparke, a professor of politics at the University of California Santa Cruz, who wrote about the relationship between public health and inequality in light of the H1N1 pandemic in 2009.
The Covid-19 outbreak has forced many companies to scale back their single-minded focus on the bottom line, if only temporarily. But if there’s any long-term takeaway that the past month’s economic contractions have cast into sharp relief—it’s this simple, yet rarely acknowledged fact: The food industry will crumble if the people who labor to keep it running are sick.
“Interestingly, what more privileged people are going to be trying to do is reduce their social contacts and isolate themselves,” says Sparke. “And they’ll try to do that with strategies that rely on all these gig economy workers.”
A sizable segment of the food industry has long sidestepped the public health grounds to provide paid sick leave to its workers. Sometimes change simply requires a pandemic.