Sunday, October 28, 2007

Sick Leave: A Step to Resolve America's Economic Paradox?

Paradox: a statement or proposition that seems self-contradictory or absurd but in reality expresses a possible truth.

When the subject is money, the world is replete with paradox. A good example is the paradox of thrift first identified by economist John Maynard Keynes. The paradox states that if everyone saves more money then aggregate demand will fall and will in turn lower total savings. So, if everyone saves, then there will be a decrease in consumption which leads to a fall in aggregate demand leading to a fall in economic growth, making savings bad, not good.

Indeed, the President of the United States became a leading advocate of consumption after 9/11 fearing that America would stop spending, start saving in anticipation of the next "event," and send the economy into recession. Yet, we all know that saving for a rainy day, retirement, or a new home is a positive personal trait, one that illustrates the ability to plan for the future, the willingness to assume responsibility for ourselves and our families. This leaves us on the one hand pumping consumerism as necessary to propel an economy that provides goods, services, and jobs, while at the same lamenting America's often negative savings rate as illustrating individual and collective immaturity, even moral derilection of duty.

The workplace, too, is filled with paradox, one being paid sick leave and whether or not it should be mandated. The paradox is that most Americans believe (or say they believe) in "family values," and ostensibly one of those values is to stay home to take care of loved ones who are ill, and to not be economically disadvantaged when we are sick. After all, how can one say "I believe in family," and at the same time say "I believe if you or a close family member is ill that you should be penalized." Yet, some argue that this is exactly what more than half the employers in the United States are saying by not providing a single day, not an hour, of paid sick leave to their employees, this in contrast to 145 countries around the world who require employers to "walk the walk" of family values.

How do most within our society resolve this paradox? With another paradox, of course, that being the "free market" which states the market, not the government (or the people), should determine how much, if any, sick leave employers should provide their employees. That might work but for the fact that the "free market" itself may be the ultimate economic paradox, espousing the principle that everyone pursuing their own economic interests and ignoring the interests of others nets a greater economic good for all. Indeed, at its foundation, the "free market" elevates selfishness to a virtue, which might work theoretically but for the religious foundations of society which are grounded upon giving, not receiving, as the virtue which should be valued and applied.

Regarding paid sick leave, America may soon have an opportunity to resolve a part of a multi-layer paradox that permeates our economic existence. The question to be answered is whether it is more important to support families and the employees who support them by requiring employers to provide compensation during some period of illness or is it more important to allow the free market to work its magic, knowing (or at least believing based on substantial historical perspective) that in the long term free markets right themselves between capital and labor. Applied to compensation and benefits, the argument goes something like this -- when paid sick leave is required to hire and retain good employees, then the market will require employers to provide it.

Ironically, the easy answer to the paradox of paid sick leave won't work anymore, that being, "Employees should save their money so when they are sick they can take care of themselves and their families," for as we all now know saving is no longer a moral virtue, but rather, a flaw that leads to economic Armageddon for all of us.

The upcoming debate over the Healthy Families Act which, if enacted, would require employers to provide every employee seven paid sick days a year may ultimately be reflected upon as a milestone in how America resolves a fundamental economic paradox.



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