Why business school professors support a national paid-leave policy

A leading Democratic proposal for a national required paid-leave policy is getting some unlikely supporters: business school professors who teach the future corporate leaders of the world.

More than 200 faculty members, many of whom work at the country’s most elite business schools, signed a letter of support for the Family and Medical Insurance Leave (FAMILY) Act. The letter was released Tuesday, with support from the advocacy group National Partnership for Women and Families. It cites evidence meant to convince legislators and business leaders that offering workers 12 weeks of partially paid leave funded by payroll tax contributions makes good business sense.

“Sound business practices, data from other countries, our own research with employers, employees and organizations, and our experiences teaching the business leaders of tomorrow compel our conclusion that the United States must adopt a national paid family and medical leave policy,” the business academicians write in the letter.

It goes on to cite things such as turnover costs, employee retention and the results of efforts in states like California and New Jersey as evidence of the benefits of a national approach to paid leave.

President Obama recently called for federal legislation to be passed that would guarantee all working Americans paid family and medical leave, noting the FAMILY Act as one idea.

That measure would create an independent trust fund as part of the Social Security Administration that would be funded by employee and employer payroll tax deductions (0.2% of wages each) and be available to all workers. Companies could choose to add supplemental paid leave on top of the mandated benefit.

Stewart Friedman, a professor at the University of Pennsylvania’s Wharton School who studies work-life balance issues and who drafted the letter with help from the National Partnership for Women and Families, said he was surprised at the enthusiastic response from his colleagues.

Friedman acknowledged that business school professors may have different views from some of their students, or from some of the business leaders they serve — at least regarding the need for a national paid-leave policy or legislation. And yet: “We’re really trying to frame this as an opportunity for our national social policy to catch up with the rest of the world,” he said. “We are lagging so far behind and everybody knows this.”

The letter’s signees include Harvard Business School’s Amy Edmondson, known for her work on organizational teams; Columbia Business School leadership professor Adam Galinsky; and “creative class” researcher Richard Florida, who holds posts at the University of Toronto and New York University.

Jeffrey Pfeffer, a professor at Stanford’s Graduate School of Business who signed the letter, said in an emailed statement: “In a competitive world, one cannot do things that exclude such a large proportion of the talent. Plus it is sort an issue of hypocrisy — how can so many politicians argue for ‘the family’ and then not support policies that strengthen families?”

Although many large corporations offer paid leave for employees, it’s far from a universal benefit. Bureau of Labor Statistics data show that just 13% of the U.S. workforce has access to paid family leave, and only about 60% of the workforce is eligible for the Family and Medical Leave Act (FMLA), which protects the jobs of workers who take time off to care for new children or who fall ill, if they meet certain criteria. The FMLA does not, of course, guarantee paid leave.

There are those who oppose the new measure: The National Federation of Independent Business, for instance, a group that advocates for small businesses, has said in media reports that the bill would bring higher costs that not all businesses can afford.

The Society for Human Resource Management also says the FAMILY Act “would add another layer of complexity to an already confusing patchwork of local, state and federal laws” and that public policy “should incentivize employers to voluntarily provide paid leave to their workforce rather than limit flexibility.”

Yet Vicki Shabo, a vice president at the National Partnership for Women and Families, said in an interview that opposition to the FAMILY Act from the business community has not been as “vociferous.” Indeed, the professors’ letter comes at a time when many large corporations are significantly expanding their paid leave benefits for mothers and fathers.

“I think the business faculty community is an interesting and unusual ally here,” Shabo said. “We always think of them as being this old guard aligned with profit, loss, etc. Yet this is a very esteemed group of professors saying this is not just good for the workforce, but for businesses themselves.”

Jena McGregor writes for the Washington Post’s On Leadership section.