Tuesday, September 28, 2010

Sick Policy

It's not that often that we find ourselves siding with Kathy Wylde and the NYC Partnership-but on the issue of paid sick leave we certainly do. The WSJ has the story on the legislation, and the Partnership's study of the impact of the policy: "A new business-backed study pegs the price tag of a proposed city law requiring paid sick leave for all workers at $789 million a year, kicking into high gear a debate over how much the legislation would cost employers and how many people it would help.The Ernst & Young study—commissioned by the Partnership for New York City, the city's leading business group and an opponent of the bill—estimates 375,000 workers in the city, or 12% of the work force, do not have paid sick leave. That contrasts with estimates from supporters, who say 1.3 million workers lack the benefit."

Now don't get us wrong, we're not big fans of paid studies, wherever they derive their funds from; but in the case of paid sick leave, there is a compelling need to examine the collateral damages of yet another costly mandate on business-and in a severe recession no less: "The bill would require businesses to provide employees up to 72 hours, or nine days, a year of sick leave. For business with fewer than 20 workers, the maximum number of paid sick leave hours would be 40, or five days. Under the bill, sick leave could be used for an employee's own mental or physical illness or for attending to the illness of a spouse, child, parent, grandparent or domestic partner."

With small stores and other firms going bankrupt at record levels, does anyone know what kind of impact this would have on the ability of those businesses to keep their current employees, and hire new ones? The Bloombergistas have this right: "Mayor Michael Bloomberg has major problems with the bill as currently drafted because he "has serious concerns about unfunded mandates on businesses at a time when we're still feeling the effects of a national recession," said Andrew Brent, a mayoral spokesman."

The Ernst and Young study points to the bill's small business impacts: "The largest burden would fall on employers with hourly workers or those who make tips, and on smaller businesses. For small businesses, payroll costs would rise 0.31%; for retail, 0.4%; for hospitality and restaurants, 0.71%; for construction, 1.28%." And, unless the council wants to repeal the basic laws of economics, the results of the bill would mean less revenue  to hire more workers-or hard decisions on letting go some of the existing workers.

Speaker Quinn is right as well: "Clearly the idea of helping people get paid sick leave is something that sounds great and has merit," Ms. Quinn said. "You have to balance that against the impact on small businesses." Now, the fact is that the study is sponsored by folks who normally don't give a rat's ass about the little guy-and, as usual, the small business owner is being trotted out for use as a sympathetic marionette. The same goes for the speaker who, while posing as a small business advocate, continues to be a managing partner of the Partnership.

That doesn't take away, however, from the real negative impacts of the legislation-and the hellish road that's being paved here with all those good intentions: "The results of our survey show that this legislation triggers a boatload of unintended consequences that would be toughest on small businesses and nonprofits, the beleaguered construction industry, and could threaten the jobs of the most vulnerable employees who are its supposed beneficiaries," said Kathryn Wylde, the partnership's president."

Bill sponsor Gale Brewer disagrees, but there is a need for the proponents of the initiative to be alive to its potential harm: "I believe it's a lot less expensive than what they're predicting, and there are a lot more workers involved," Ms. Brewer said. "It's a family-friendly legislation." Not to the family whose bread winner is laid off because of an extra, and unaffordable, mandate.

We'll give restaurant spokesman Rob Bookman and Kathy Wylde the last word duet: "Robert Bookman, legislative counsel to the New York State Restaurant Association, said the study substantiates small business owners' fears about the financial impact of the bill. He said the study's finding that just 12% of the city's work force doesn't have paid sick leave "shows that there is no big crisis, no big problem."

"Ms. Wylde said the payroll increase is roughly equivalent to the 0.34% payroll tax imposed on all employers in 2009 to help fund the Metropolitan Transportation Authority. That tax has been panned by business. "It's a significant new burden on some of the most vulnerable businesses and sectors of the economy," she said."