Bob Murphy explains why mandated family-leave ‘benefits’ are detriments to many of the workers who are the (ostensible) intended beneficiaries of these mandated ‘benefits.‘ (General lesson: if employers’ costs of employing type-X workers rise, employers further economize on the use of type-X workers. That there has emerged a mini-industry of professional economists over the past twenty years devoted to denying or obscuring this reality does not make this reality any the less real – or less clear to those who genuinely understand economics.) A slice:
Now, just because guaranteed leave, whether paid or unpaid, is an expensive constraint for employers, that doesn’t mean such policies (in moderation) are necessarily bad business practices, so long as they are adopted voluntarily. To repeat, it is entirely possible that in a genuinely free market economy, many employers would voluntarily provide such policies in order to attract the most productive workers. After all, employers allow their employees to take bathroom breaks, eat lunch, and go on vacation, even though the employees aren’t generating revenue for the firm when doing so.
However, if the state must force employers to enact such policies, then we can be pretty sure they don’t make economic sense for the firms in question.