NFIB Economist Report on Earned Sick Leave Filled With Errors; PA Economists Find Costs of Sick Days Proposal Exaggerated and Benefits Ignored

For Immediate Release:
May 24, 2011

Contacts:
Lauren Townsend, Paid Sick Days Campaign
215-939-7621

Dr. Stephen Herzenberg, Keystone Research Center
717-805-2318

NFIB Economist Report on Earned Sick Leave Filled With Errors;

PA Economists Find Costs of Sick Days Proposal Exaggerated and Benefits Ignored

Philadelphia -- Pennsylvania economists today responded to a new report by William Dunkelberg, National Federation of Independent Businesses (NFIB) chief economist, on the impact of earned sick days legislation, saying Dunkelberg’s report “contains serious errors that exaggerate the costs of the proposal and ignore the benefits.”

"Given the fundamental flaws in methodology and analysis in this report, its predictions are too one-sided to be credible," concludes Lonnie Golden, Professor of Economics and Labor Studies at Penn State Abington.

The economists pointed to the following errors and limitations of the Dunkelberg report:

• A simple analytical error doubles the estimated potential maximum cost of the bill to employers.
• Dunkelberg’s study assumes workers will take all of their allowed paid sick days when national surveys indicate that workers take less than half of allowed sick days, on average.
• It fails to use arguably the best evidence available, from the actual impact study of paid sick leave in San Francisco, which found that more than 2/3 of employers are now supportive of the measure.
• It does not consider the many potential cost-saving benefits for employers that would likely result from reduced turnover and greater worker effort and productivity due to an improved employment relationship.
• It neglects the potential costs when sick workers come to their job—including low-productivity and the cost of the workplace spread of communicable illnesses.
• It overstates the adverse effect on jobs by using a questionable methodology that exaggerates the sensitivity of employer demand for labor to the implementation of paid sick days.
• The report includes implausibly high estimates of compliance costs for businesses.

The full response to the NFIB report can be read HERE.

“The sky won’t fall if we enact modest paid sick days legislation, any more than it did when we enacted child labor laws and other basic labor standards,” said Keystone Research Center economist, Dr. Stephen Herzenberg. “When you use actual data on how much workers use paid sick days, and add in benefits such as lower turnover, any short-run costs are negligible. Long-term, paid sick days can help establish Philadelphia as a city with high workplace standards that help attract and grow innovative businesses and committed workers.”

“If paid sick days are such a job killer,” added Golden, “how do you explain that—in every employer size class—two-thirds of San Francisco employers with actual experience with a paid sick days law (one stronger than the current Philadelphia proposal) support are somewhat or very supportive of the law.”

Over 90 organizations that comprise the Philadelphia Coalition for Healthy Families and Workplaces have been pressing for a vote on Philadelphia's earned sick days bill before Philadelphia City Council recesses for the summer. The enthusiasm throughout the City for this long overdue legislation has been echoed by a Philadelphia public opinion poll conducted last week by Anzelone Research showing that over 70% of Philadelphia voters support the bill.

The National Federation of Independent Businesses (NFIB), whose chief economist produced the report, has been a long time ally of extreme anti-worker Members of Congress and special interest groups including the Chamber of Commerce. The group has spent the last several years fighting against the Family and Medical Leave Act, increase in the Minimum Wage, the Obama Administration’s economic stimulus package and health care reform legislation.

Background:

Promoting Healthy Families and Workplaces Act (Bill 080474) is a bill that would allow Philadelphia workers the opportunity to earn up to 7 days of sick time per year for a large business and up to 4 days per year for a small business. It was voted out of the Public Health and Human Services Committee on March 1, 2011. The bill could affect up to 200,000 workers in Philadelphia who do not have access to paid sick days.

With over 40 percent of Philadelphians lacking earned sick days, a large portion of the population cannot take the time off work to go see a doctor or obtain medical treatment - regardless of the medical coverage they have.

Employees with earned sick days are more likely to stay home when they are sick, limiting the spread of the illness and protecting co-workers, customers, or anyone else they meet during the work day. During the height of the H1N1 pandemic, people were urged to stay home if they had any signs of the flu, however, those without earned sick days were less likely to stay home because they could not afford to. As a result, nearly 8 million H1N1 cases were traced back to employees going to work while sick.