The case for a right to request a better work schedule

Improving life for families in the workplace is taking on increasing importance in our 2016 presidential debate.  While the parties have split on paid family leave, there’s another important policy that’s going overlooked that might just be able to draw bipartisan support.

The Democratic candidates for president have uniformly lined up behind extending twelve weeks of paid family leave to workers to care for new children or ailing family members — a benefit guaranteed by every other developed country in the world.

The Republicans, on the other hand, have uniformly lined up against requiring this kind of workplace benefit. Gov. Jeb Bush and Sen. Ted Cruz both think it’s an unjustifiable new government burden on business.  Sen. Marco Rubio also blasted the Democrats’ “costly federal mandates” and instead proposed a weak tax credit for businesses that would do little to actually expand paid leave to more workers.

Gov. John Kasich too would defer to the employer-based paid leave status quo.  But he also argued we need to think more broadly about workplace flexibility.  “The one thing we need to do for working women is to give them the flexibility to be able to work at home online,” he said. “And we need to accommodate women who want to be at home, having a healthy baby and in fact being involved, however many years they want to take care of the family.”

While paid leave is extremely important, Kasich makes an important point: that there is more to creating a family-friendly workplace than just a few weeks off when a new child is born.  As the New York Times recently put it: “After the first few weeks of a child’s life, working parents have at least 18 more years to juggle work and child rearing.”

There’s a reform growing in popularity that would help parents manage this juggle.  Known as the “right to request,” working parents in countries like the United Kingdom, Germany, the Netherlands, and New Zealand have a statutory right to ask their employers for flexible work arrangements, such as working from home or changing their hours.  Employers do not have to accept the request, but must consider it in good faith and may only decline it for legitimate business reasons.  These reasons are often specified by statute, and if an employee feels her request was wrongfully denied, she generally has a right to appeal.

These “soft touch” laws impose no financial mandates on business.  Instead, they simply empower workers to seek a family-friendly work schedule without fear of retaliation or baseless rejection by their employers.  And with dual-earner families now the norm, these laws make it easier for parents to carve out some much needed space for family life in their work schedules.

Right to request might employ a soft touch, but it’s far from toothless.  During the first two years of the U.K.’s right to request law, one study found that 14 percent of employees requested a flexible schedule.  Yet employers approved more than 80 percent of these requests.  In fact, most employers are finding the law has a valuable impact on employee retention and morale.

The law has been so successful that the U.K. has repeatedly expanded it: first to cover parents with children of all ages, and again to cover workers caring for ill family members.  Recognizing the value of flexible work for business productivity, the U.K. ultimately extended right to request to all workers in 2014.

These laws are slowly making their way across the Atlantic.  Vermont and San Francisco have both adopted right to request laws.  And in Congress, Sen. Bob Casey and Rep. Carolyn Maloney have introduced the Flexibility for Working Families Act, which would provide a national right to request for working families across the country.

There’s a lot to like in these laws.  Rather than impose financial burdens on business, they facilitate fairer and more even-handed discussions between firms and their employees. Today, only unions and highly sought workers (like Speaker Paul Ryan) enjoy the bargaining power necessary to confidently command quality-of-life accommodations from their employers.  Right to request democratizes workplace flexibility by boosting the standing of all workers.

Right to request also stands for the principle that work life should be subsidiary to family life, and not the other way around.  In an era where work increasingly encroaches on other aspects of our lives, right to request boldly reasserts the primacy of family life.

A reform that empowers workers while promoting family values and preserving employer discretion ought to be the kind of policy that both parties could rally around.  Let’s hope they do so.  The Democrats’ family leave policies are an important protection during a crucial time in a family’s life.  But we ought to go further to even the deck for families throughout their careers by encouraging the kind of job flexibility that brings our workplaces into the twenty-first century.

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The nascent bipartisan momentum for fighting poverty

The end-of-year budget deal struck in Congress has rightly been hailed as a surprising triumph for a legislative body weakened by years of gridlock.  But it was also a major success for millions of low-income working families, who benefit from anti-poverty tax code programs that were finally made permanent by the budget deal.

The Earned Income Tax Credit is our most successful anti-poverty program, saving six million people from poverty each year.  It provides refundable tax benefits to low-income working families that increase with their earnings up to a certain income level.  The budget deal solidified EITC expansions for married couples and families with three or more children.

Congress shouldn’t stop there, however.  It should seize this newfound momentum to enact commonsense EITC improvements that have support on both sides of the aisle.

The EITC enjoys rare bipartisan support.  While conservatives wavered in recent years, they’ve largely come back around to the tax credit that they dreamt up in the 1970s, heartened by the EITC’s ability to promote work.  Likewise, liberals support the EITC because it puts extra money in the pockets of the poor.

Both parties also broadly agree on how to continue making the EITC better. For instance, leaders from both parties support expanding the number of workers benefiting from the EITC.  The current EITC provides generous benefits to working families, but provides little to childless workers.

As President Obama briefly alluded to in his final State of the Union, both he and Speaker Paul Ryan have proposed increasing EITC benefits for childless workers.  But they disagree on how to fund it.  Liberals like Obama and Sen. Patty Murray favor closing corporate tax loopholes, while conservatives like Ryan want to pay for it through cuts to other anti-poverty programs.  While hardly insurmountable, this funding disagreement poses a hurdle to expanding the EITC.

A better place to start may be with reforming how we pay the EITC to current beneficiaries.  Today, families receive their EITC in a lump sum through a single annual tax refund.  This makes it costly to access benefits that families have earned, as many find it necessary to pay for tax preparation services.  It also weakens the connection between EITC benefits and work.  According to economist Raj Chetty, only 5 percent of those eligible for the EITC understand that its value increases as their earnings rise — a key policy tenet behind the EITC.

Both liberals and conservatives have embraced ideas to fix this by making periodic EITC payments throughout the year.  In Speaker Ryan’s 2014 anti-poverty plan, he endorsed converting the EITC into a wage subsidy so that it would automatically top off a worker’s paychecks.  Aside from simplifying access and tightening the connection to work, Ryan also favored periodic payments because they would reduce fraud and defuse the case for a higher minimum wage.

Liberals rightly balk at undermining the minimum wage, but have nonetheless endorsed variations on periodic EITC payments of their own.  Proposals from the liberal Center for American Progress and Sen. Sherrod Brown would allow workers to tap into some of their EITC refunds early to cover unexpected expenses.  These proposals help reduce the boom-and-bust budget cycle experienced by low-income households under the current EITC.

Aside from the potential for increased EITC participation, providing a periodic payment option would be virtually costless to administer.  And there’s already evidence that this kind of program works.

In Chicago, researchers enlisted 343 families to receive half of their expected EITC refund in four periodic payments.  By receiving periodic payments, these families gained improved financial stability and greater disposable income.  They built up their savings while avoiding costly short-term debt and predatory private refund advances.  Ninety percent wanted to sign up for periodic payments again.

Even better, periodic payments may increase earnings among participants. Economists like Chetty have found that making the program’s core incentive more apparent — that earning more nets you a higher refund — tends to increase recipients’ earnings.  If periodic payments help increase the general understanding of the connection between work and refund size, EITC recipients’ total earnings may very well increase under such a reform.

The details of the program will need to be hashed out.  Conservatives (including Sen. Marco Rubio) support regular payments made through workers’ paychecks, whereas liberals have so far supported less frequent payments through government checks.  The Advance EITC, which was scrapped in 2010, essentially tried the conservative method, but failed to attract many beneficiaries because it was run through employers and ran the risk of overpayment.  Still, EITC expert Steve Holt notes that periodic payments for tax credits like the EITC have proven highly popular in countries like Australia and New Zealand.

Giving working families the chance to receive their EITC throughout the year would provide them with much-needed financial relief and would strengthen the program’s work incentives.  Liberals and conservatives can coalesce around this reform, and keep the budding legislative momentum around improving the EITC going in the new year.