No, Paid Sick Leave Isn’t “Government Intervention”


Bloomberg View usually offers economics-heavy reporting with right-of-center viewpoints. Today, Tyler Cowen continued this trend. He takes issue with Hillary Clinton’s chief economist, Heather Boushey, and her reliance on government-mandated solutions.

After reading Boushey’s “thoughtful and intelligent book” (buy it here), Cowen believes she has some troubling remedies for rebalancing the work-life conflict. He thinks her policy proposals, like “paid sick leave, paid parental leave, subsidized child care and better care for the elderly” are “an extensive set of government interventions.” (In the interest of full disclosure, Heather is a friend of Civic Skunk Works and has appeared on one of our podcast episodes.)

Think about how Cowen frames these, let’s be honest, pretty generic policies. Interventions. Just reading it makes me think of a greedy government bureaucrat coming for my private property.

But how can someone genuinely call policies like paid sick leave an intervention? If you were to say that in any other developed country, you’d be laughed out of the room (as we pointed out in our latest podcast — listen to it!). These interventions are merely acts by government to fix problems that the free market hasn’t touched. That’s what FDR addressed with the Fair Labor Standards Act, where he intervened and imposed dreadful policies like the minimum wage and limiting child labor.

Just like then, it’s not as if Americans today haven’t given the market enough time to deal with these issues. The market clearly just doesn’t care. How else can you explain why 40% of private sector workers don’t have access to paid sick leave?

Note to Cowen: sometimes the government needs to set a minimal standard so that the market cannot continue to undermine the best interests of our society.

Whereas Cowen thinks Boushey “holds too much faith in mandated and centralized solutions,” the same can be said for Cowen and the free market. He claims that policies, like paid sick leave, can be resolved by “the alternative mechanism, which for all its imperfections is far more flexible: let companies and workers make such decisions through employment bargains.”

Here, Cowen makes the (basic) mistake of assuming that companies and workers are on an even playing field. If this were true, then yes, perhaps that would be the best way of negotiating labor rights. But if history serves as any guide, businesses hold asymmetrical power over their employees and will fight tooth and nail to halt any progress. (See slavery, child labor, overtime, weekends, minimum wage, health and safety, and now, paid sick leave). How can Cowen not see this? And as Mike Konczal points out

For what it’s worth, Matthew Yglesias also weighed in, saying:

The problem with Yglesias’ middle-ground alternative is that it’s just as unrealistic as Cowen’s reliance on the free market. Labor unions simply don’t have the power they once did to enforce new labor standards. Today, only 11% of American workers belong to a union. So in order to advance labor rights in the 21st century, the government must step-in and fill the void because the market is not budging.

The argument I’m putting forward is frustratingly simple. The invisible hand is not a magic wand that can solve all of society’s ills—just like government. Finding the appropriate balance between the market and government, uh, interference is the key to ensuring a prosperous society. I fear that Cowen, unlike Boushey, has failed to comprehend that basic truth. Until he does, Cowen will continue to see basic labor rights as intrusive measures and not what they truly are: rights.

Nick Cassella

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