Monday, March 26, 2007

Is it unaffordable for all Americans to have paid sick leave? Well, yes

Leftist "economist" Julianne Malveaux had a bleeding-heart op-ed about how supposedly all workers should receive paid sick leave. It's full of emotion and lacking in substance, i.e. typical liberal rhetoric that advocates this and that but fails to ask (let alone answer), "But who will pay for it?"

How can someone receive a doctorate in economics yet posit such flagrant fallacies of economics and logic? She has a fellow socialist MIT alumnus who makes you wonder if something's in the water there, although MIT does produce real economists. First, it's true that an entire group's productivity goes down if a sick person can go to work and spread the illness to others, but if and only if the sick person is infectious. Not all illnesses are infectious. Today, actually since Saturday, I've been feverish off and on. Yet I toughed it out and went to work, alternating between cold sweats and hot flashes, but not contagious such that I passed my illness on to others.

Now, Malveaux claims there's a "high cost" to unpaid sick leave: "According to a Cornell University study, presenteeism — the phenomenon of a sick person coming to work — costs employers about $255 per employee per year, for a total of $180 billion." She forgets that everything has a cost, and ignores or does not understand that unpaid sick leave exists because it costs more to compel companies to provide paid sick leave for lower-end jobs. Who doubts that the drop in total productivity would be greater if all workers were suddenly able to take time off even if they merely "just didn't feel well," content with the knowledge they'd get paid anyway? It's not that the economy is running inefficiently, but that it is running more optimally because companies can choose the less expensive of two choices.

There's a damned good reason not everybody can be paid for calling in sick: we are the United States of America, and we don't want to turn into that shitty little France country. People respond to incentives, and whether they're honest job-seekers or lazy frogs, whether they're genuinely sick or just looking to sleep in, people will tend to seek the path of least resistance. It's the same problem with socialized medicine: people will take advantage of it whether they really need it or not.

Also, if payroll costs increase 3%, who -- besides leftist bleeding-heart types -- is idiotic enough to believe that businesses won't pass it on to consumers, or cut back on pay raises and other compensation, if not actual salaries? Prices are ultimately set by market forces, and not entirely by the costs put into production, but a business will "shut down" (stop producing) if marginal costs exceed marginal revenue. So if a business cannot cut costs and cannot pass on new expenses to its customers, then it will cease to provide the goods or services that consumers would have otherwise been able to buy.

So if we want high unemployment and economic stagnation a la France, let's go ahead and pass Chappaquiddick Ted's bill to force companies to provide paid sick leave. We'll have no right to be surprised when companies hire fewer and fewer people, paying them less and less. Just like with the minimum wage, the ones who are affected most by a government-induced shift are just above the very bottom. Their overall purchasing power is reduced when they receive cuts in compensation and/or have to pay higher prices, and they become the new bottom because those below them are artificially pushed up.

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