February 26, 2010

Sick leave mandate would hit business hard

— PORTLAND — In Cecil B. De-Mille's epic film ''The Ten Command-

ments,'' Ramses II, memorably portrayed by Yul Brynner, repeatedly decrees ''So let it be written -- so let it be done,'' reflecting the final, infallible word of Pharaoh.

But try as he might, the pharaoh cannot decree the submission of the Hebrews, and ultimately brings death and destruction to his own people until he is forced to submit to the reality of a force greater than himself.

The story of pharaoh's hubris offers a lesson too many of our political leaders don't seem to grasp.

Recently in Augusta, LD 1665, ''An Act to Prevent the Spread of H1N1,'' brought a plague upon the Legislature's Labor Committee -- not of locusts, but of anger and fear from small-business owners opposed to the bill.

A MISLEADING NAME

If decreeing an end to swine flu was what the bill was really about, perhaps we could shrug it off as just another example of political grandstanding.

What the bill actually does, however, is to require every Maine employer to provide paid sick leave to every single employee. Under LD 1665, my brother-in-law would get paid leave to take me to the massage therapist for ''preventive'' treatment on my bad back.

As unreal as it may be, the scope of the proposed mandate is less the issue than the underlying premise that government can decree a one-size-fits-all obligation on every employer without regard to the consequences. The greater force at work here may be merely economic instead of divine, but it still trumps the power of pharaoh.

When government mandates a benefit, someone has to pay for it. This mandate is on the employer, who has a limited number of choices. Raise prices? In a recession, this is economic suicide.

Cut costs? Diverting money the business deems better spent on meeting customer demand will negatively impact vendors and others (including, of course, in their own ability to afford paid sick leave).

Take less profit? That's a great way to reduce the incentive to hire employees, or even to stay in business.

Take away another benefit? Which one, pharaoh? Reduce payroll? To which of the unemployed would proponents be willing to say, ''Your sacrifice is for the greater good?''

Close the business? As the Labor Committee heard repeatedly, for many small family operations, seasonal businesses and nonprofits, this mandate may well be the final straw.

Simply put, mandatory paid leave is a poorly disguised tax on employment. When government taxes something, the economy inevitably produces less of it.

The direct harm -- lost benefits, income and jobs -- is bad enough, but this mandate also undermines our dynamic economy by depriving employers and employees alike of the freedom to decide, based on far better information than the government can ever have, what works best for them.

The small employer -- the last engine of job creation left in Maine -- cannot afford paid leave, and, along with its employees, will be hurt the most.

Proponents offer a study from the Institute for Women's Policy Research claiming that the $56 million a year cost of this mandate would be more than offset by $93 million in savings, almost all of it from the presumed effect of reducing employee turnover -- all those people supposedly fleeing current jobs for employers able to afford paid leave.

For all you employers who haven't been smart enough to figure this out, a little central planning will fix that problem. And, if the economic benefit is so obvious, why not just pay for it out of the state's general fund? With a 166 percent rate of return, the money would flow like milk and honey!

Which brings us back to pharaoh. Like so many other efforts at social legislation, to ''let it be written'' that paid leave for all shall be a public benefit does not ''let it be done.''

IMMUNE FROM REALITY

The greater hubris here is not even that legislative edicts can halt the spread of disease, but that they are immune from economic reality. A slow exodus of businesses, taxpayers and our children is already under way.

If we are the first state in the nation to impose this cost when our business climate is ranked 47th in the nation, we risk turning it into a stampede. We must stop our political culture from making further decrees.

Otherwise, what's left of our pretensions to ''quality of place'' will surely be swept away too, and our conversation will turn, sadly, from the modern-day Promised Land that Maine might still aspire to be, to the one it might have been.

— Special to the Telegram

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