Living in a Fantasy World

by Don Boudreaux on April 5, 2017

in Reality Is Not Optional, Seen and Unseen, Work

Here’s a letter to the Washington Post:

It’s both astonishing and appalling that those who support mandated paid sick leave ignore the fact that such a mandate will cause workers’ pay to fall (“Maryland General Assembly approves paid sick leave,” April 5).  The provision of paid leave is costly, and employers will cover these mandated higher costs by reducing the value of workers’ pay (as well as the value of fringe benefits other than paid leave).  The final result is that such a mandate forces workers to take a larger portion of their pay in the form of paid sick leave and a smaller portion in the form of take-home pay and of fringe benefits other than leave, such as employer contributions to pension funds.

Suppose that the government were to mandate that employers give to each and every employee an annual all-expenses-paid vacation to Maui.  Does anyone doubt that such a mandate would be paid for, not by employers, but by employees in the form of lower pay?  And would anyone dare suppose that all employees would be made better off by this mandate merely because some employees would, in the absence of this mandate, pay for Maui vacations directly out of their own pockets?

Only someone so economically illiterate as to believe that mandated annual all-expenses-paid vacations to Maui would not harm most workers can also seriously believe that mandated minimum number of paid sick-leave days will not harm most workers.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

Apologies to Ben Zycher who, in this essay, equated the cost effects of mandated paid leave to those of mandated limousine rides to work.


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