Policy is personal. I discovered this when I was Hillary Clinton's Deputy Secretary of State and found myself in the midst of a baby boom among my staff members. As I watched them go through an exciting and challenging transition in their lives, I was shocked to discover that they were not entitled to paid parental leave -- and neither are the majority of American workers. A federal law that guarantees all workers paid family and medical leave is critical to supporting our people and economic stability. The good news is that the Family and Medical Insurance Leave Act (FAMILY Act), federal legislation that was introduced in December by Senator Kirsten Gillibrand (D-NY) and Representative Rosa DeLauro (D-CT), would establish a family and medical leave insurance program designed to be low cost for employers and employees. This policy is not just good for families and businesses -- it also makes economic sense.
As a father of two in a family where both parents work outside the home, I know how difficult it is to be both a good parent and a good worker. So when I asked about how much paid parental leave was available to my former State Department staff members, I was appalled to learn that their only choice was to go around to colleagues and cobble together paid sick leave and annual vacation time. In my view, that is an entirely inadequate way to support a family -- and an employee -- when a newborn arrives.
Only 12 percent of U.S. private sector workers have paid family leave, and fewer than 40 percent have access to personal medical leave through short-term disability insurance programs. Moreover, unlike my former staff members, millions of lower-wage workers do not have any leave to patch together. As many as 41 percent of parents with household incomes below twice the poverty level have no paid leave of any kind -- no paid vacation, no sick days, personal days, nor parental leave. For these workers, a sick family member, a new baby or a serious illness creates an untenable situation. If time is taken to heal or care, it can translate to lost wages or lost jobs. More than one in five women leave their jobs in order to take some leave time before or after becoming mothers. And for those who get to take maternity leave, it is often brief -- in 2012, nearly a quarter took less than 10 days.
In my private sector career, I've seen the benefits of fair family leave policies. Morgan Stanley is a leader, providing most employees with 16 weeks of paid parental leave -- a benefit both to families and to the Firm. Demonstrating this type of loyalty and respect for our people reinforces the same in return.
I recognize, however, that providing similar benefits may be a bridge too far for some businesses. To ensure that all working Americans have access to paid family leave, we need a public policy solution. That's why I support legislation that would create a federal family and medical leave insurance program.
In some states, effective family leave insurance programs already exist. California's Paid Family Leave (PFL) and New Jersey's Family Leave Insurance (FLI) -- the only two state-level paid family leave programs operating in the country -- make it possible for almost all workers in those states to take the leave they need to care for themselves and their families, regardless of their employer. Rhode Island recently enacted a bill that will create a Temporary Caregiver Insurance (TCI) program, similar to California and New Jersey's paid leave program. New York State and others are also considering family leave bills.
The evidence from California, where paid leave has been a reality for a decade, is encouraging. Many business owners find themselves coming out on top as a result of these policies. In a study of the effects of California's family leave program, researchers found that most employers report either positive or no noticeable effects on productivity, profitability, turnover and employee morale. Meanwhile, California families, particularly those with lower incomes, are benefiting: Ninety-one percent of workers in low-wage jobs who used paid leave reported it helped them to be better able to care for a new child.
With benefits to both businesses and families, it is clear that even in an ongoing economic recovery, providing paid family and medical leave insurance is the right thing to do. In order for U.S. companies to remain competitive, we must embrace smart policies like this one, which is a winner for the economy, business, and workers.
While the enlightened family leave policies of California, New Jersey and Rhode Island are a critical step forward, it's time for a federal policy to ensure that all Americans have access to this crucial benefit. If passed, the FAMILY Act would create a family and medical leave insurance program through which almost all employees will have some income for up to 12 weeks when a baby comes or a serious illness hits. The insurance program would be funded by employee and employer contributions of two-tenths of one percent of a worker's wages, or less than $1.50 per week for the average worker.
Most countries already offer paid family leave; the United States is one of only a handful that does not. My own observation of staff members' experiences at the State Department juxtaposed with the family leave policies of other nations made me painfully aware of how far behind our country is in this respect.
In business, we often talk about how employees are our greatest asset. How much our country values our workers -- and our families -- will become evident when legislation for family and medical leave passes. It makes sense to debate the specifics of the legislation, but we should expect our leaders to join together around the purpose: the establishment of a national policy that meets a need shared across political parties, regions and occupation. This is common sense policy.