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Ivanka Trump’s Parental Leave Policy is Bad News for Business

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If the federal government requires companies to pay for parental leave, expect them to simply avoid hiring people who are likely to get pregnant.

Republicans and Democrats alike were surprised by President Trump’s new budget. The 60-page long document  is sure to spark heavy debate over issues such as vast cuts to the Environmental Protection Agency and the National Institute of Health. However, the most contested aspect of the new budget—at least for the Republicans—will be the addition of a paid parental leave.

A paid parental leave program has been on Trump’s radar ever since he supported the idea during the election. The extent and scope of the newly proposed legislation has many Republicans scratching their heads. The President’s original proposal suggested a six-week paid leave for new mothers. This idea was clearly at odds with conservatives, who believed that the bill furthered government overreach. The left was also unhappy with the proposal, since it restricted paid leave to only biological mothers.

The newly revised plan has shifted farther left and now provides paid family leave for six weeks to mothers and fathers of new children, whether adopted or naturally born. This is unusual for a policy proposed under a government in which all three branches are controlled by Republicans. The cause of this shift? Ivanka Trump, who has championed this issue, and whose influence cannot be underestimated.

Upon further analysis, the description of the policy is vague at best, without any real limits or details surrounding the policy. The policy is estimated to cost 25 billion dollars over ten years.

European countries have long mandated paid parental leave programs, prompting left-leaning Americans to advocate for similar laws in the United States. Americans should be opposed to such a proposal as it will not only hurt businesses but also the young people the program is designed to protect.

Per the budget, states will be responsible for providing these benefits via the Unemployment Insurance system. Many conservatives should pause at the notion that states will require businesses to comply with this program. Adopting this policy will force business owners to comply with a plan that may hurt their companies.

Over 58 percent of American companies currently offer maternity leave benefits. These businesses have created a model that allows them to operate efficiently in addition to attracting young workers who need to take paid leave at some point. As for the other 42 percent of companies, they have their own reasons for not offering paid maternity leave. Most of them can’t simply cannot afford it, as the net losses would outweigh any potential gains.

Walmart, Exxon Mobil, and Apple have minimal or nonexistent parental leave programs despite being incredibly profitable. These companies understand they lose out on young talent who may have children in the near future. While this is not desirable, the free market should be the main determinant of whether these companies continue this practice. The federal government has no business telling these companies how to spend their money.

Furthermore, there are a variety of negative effects likely to be caused by this program. Adopting such a mandate would cause companies to discriminate against hiring workers more likely to have children. This would certainly be a troubling addition to a workplace already rampant with discrimination due to affirmative action and other policies. Additionally, the corporate world will not use this program as expected due to the immense social stigma associated with paid leave, making it ineffective and costly to regulate.

Finally, Republicans should be wary of this policy because it reduces liberty. The Trump administration sets a dangerous precedent by supporting a policy that limits the rights of American business owners. Choosing whether to provide paid parental leave is no different than choosing whether to give extra retirement incentives. One option may be more attractive than the other, regardless, the choice should be up to the employer.

This proposal certainly oversteps the powers of the federal government and should be opposed by those in favor of the free market. If a company believes paid parental leave is a worthwhile policy for their employees, they should adopt it. Any company that does not believe this policy would be beneficial would better serve their employees by providing other benefits.

Joel Gillison is a student at University of North Carolina – Chapel Hill. 

Joel Gillison is a student the University of North Carolina - Chapel Hill studying public policy.

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