Mandating Employee Benefits is a Terrible Idea

“My administration wants to work with members in both parties to make childcare accessible and affordable, to help ensure new parents have paid family leave, to invest in women's health, and to promote clean air and clear water, and to rebuild our military and our infrastructure.”

--President Donald Trump, address to Congress, February 28, 2017

The issue of requiring employers to provide paid sick leave and family leave benefits is, quite simply, complicated. Supporters of the policy have done a good job of portraying themselves as the defenders of the working class, thereby casting conservative opponents as only concerned with helping big business. The narrative is compelling and can be hard to break.

But requiring employers to provide paid family leave, sick leave, and similar benefits is a manifestly bad idea. This extends from broader arguments about liberty and the role of government in the private sector economy, to the point that requiring paid sick leave is simply bad policy. Like proposals to increase the minimum wage, it hurts employers of all stripes, particularly small businesses, and ultimately hurts the very employees Democrats claim to be trying to help.

By requiring paid sick leave or other benefits, the government would force small businesses to expend greater resources for the same number of employees. Ultimately, those businesses would be forced to choose one of two options, in order to absorb rising costs: lay off some employees, or pass the added costs on to the consumer--or both. In the first scenario, employees, many of whom are likely low-income workers, would lose their jobs. In the second, everyone who patronizes a particular business would be forced to pay more—likely including at least a few workers who lost their jobs due to the same policy of mandatory paid sick leave.

When the government attempts to mandate employee benefits, whether in the form of an elevated minimum wage, paid sick leave, or the employer mandate in Obamacare, it is ultimately small businesses and workers who must pay for it. Higher wages and paid leave are great—but let businesses reach those decisions on their own, with the help of natural market forces and without government interference.