It’s one thing for folks to get the benefit of something that they paid for themselves. It’s quite another to get the benefit of something paid for entirely by others. And when that happens, you’d sure as heck hope that they’d be grateful, and careful not to take advantage of it…right?
When it comes to paid family leave, that doesn’t appear to be happening. What’s the deal, and what does it mean?
Here are Five Fast Facts on paid family and medical leave in WA State:
- 👶 The Motivation - The PFML program started in 2020 through a tax on workers. The money goes into a pot from which some eligible folks get up to 90% of their weekly pay (with a cap of $1,456) if they have to take time off for health care of themselves or family members, or with a new baby. It’s a lovely idea, as are most ideas relying on other people’s money!
- 📈 The Growth - In its first year, the PFML gave benefits to almost 113k people. By 2023, that number grew to over 210k. As for the dollars, in 2020 it paid out $613 million dollars, but by 2023 it was up to $1.5 billion! That’s a lot of time off!
- 😲 The Unintended Consequences - The tax for PFML is based on a formula that looks at the health of the program. The initial rate was 0.4% but it has since doubled to 0.8% to meet the demand. When the state legislature dropped $200 million into it the tax rate went down to 0.74%. It made for some good headlines, but that little drop encouraged even more demand, which continued ramping up the cost to taxpayers even more. Who woulda thunk that?? Oh yeah, all those people who opposed the bailout.
- 🤫 The Quiet Part - The biggest problem is that PFML isn’t actually helping the people who need it most. An analysis of June 2022 to June 2023 showed that only 33% of the benefits paid out went to people earning less than $24/hour. On the other hand, 42% of the benefits were paid out to people earning $35/hour or more. Is it just us, or is that bass-ackwards?
- 💰 The Likely Outcome - If this trend continues, it seems very likely that either the tax rate will have to increase again to cover the costs, or there will be another bailout which will artificially deflate the tax rate and drive even more usage. Either way, it’ll cost taxpayers more. And we’re talking about the low-income taxpayers here, not “the rich.”
🔥Bottom line: This is a program that looks good, sounds good, and attempts to do good. But, like so many others, it’s been warped by political forces to pick and choose the winners and losers, and now workers are the biggest losers. There’s really no end in sight to the amount of demand for paid time off, so at what point will this become completely unmanageable? Maybe we should address this before we get to that point, huh?
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