Saturday, April 12, 2014

Reverse Parental Leave (or Paternal Neglect Leave), Parental Leave, and Paid Maternity Leave: Which Way Will the US Go?

In this post, I'd like to look at the current family policies in the United States.  Then, in an upcoming post I'll look at some of the proposed additions or reforms to these policies.  In both posts, I'll look at how all these affect peer unions.  In this post, for sake of simplicity, I am going to use two Supreme Court Justices as a template, one a woman who is either married (in a 2-parent marriage) or widowed, and one a man who has a nonearning sole parent wife or widowed. Both Justices earn the same salary and have the same job, but as we will see the federal system treats them very differently.

Current Family Policies in the United States

It's commonly said that the United States has "no family policies".  Is this really true?

The United States, especially at the federal level and in many states, actually has a lot of family policies.  Virtually every federal policy, from the income tax system to Social Security to the Affordable Care Act, is built around a template of a female primary or sole parent to children and a male primary or sole earner who has no responsibility for meeting the needs of a child other than money.  Whether parents are married or not, this template is the one around which federal systems are built.

This means that one unusual family policy that the United States tax and benefit policy has is that it pays men not to take parental leave or to share responsibility for meeting a child's needs other than money.   This is effectively a type of "reverse parental leave" or "parental neglect leave" (i.e. a paid "leave" from caring for his child or a payment to neglect his child).

As I've mentioned in other posts, the United States tax system provides tax cuts to families that consolidate their earnings in one earner over families that have two earners.  The two-earner/two-parent family and the sole breadwinner/female primary parent family do not pay the same taxes on the same gross income; the former pays much higher taxes and receives less in benefits in programs such as Social Security and the Affordable Care Act (especially in the reproductive health and preventive care provisions).  Also, within the sole breadwinner couple, the sole breadwinner tax subsidies and benefits also go overwhelmingly to the sole breadwinner, not to the stay-at-home parent.

This disparity has the effect of the federal system giving tax cuts, and increased government benefits, to men who neglect their children.

It is very unusual, especially among developed countries and OECD countries, for a government and taxpayers to compensate this.  While the marketplace rewards men who neglect their children, for example, simply by the fact that a man who does not take a paternity leave gets paid to work, it is unusual for the government to add another layer of compensation to the man on top of this, in the form of tax cuts and extra benefits if he does this, that have nothing to do with the actual work he is performing or his productivity. 

In the marketplace, for example, men, and women for that matter, are financially rewarded for neglecting their children because they are uninterrupted in their work and because they aren't using energy for the work of meeting a child's needs personally.  They thus have more time, including continuous time, and energy to work and the marketplace rewards this.  While over time, this type of "ideal childless worker" ends up facing other costs and even imposing costs on the marketplace and employers, in a short-term market this behavior is more valuable to the marketplace and is rewarded.   Why does the government subsidize it, though?

To understand the mechanics of this, let's look at the specific example of Madam Justice Peer Married (with her husband, the "Peers") v. Mr. Justice Sole Breadwinner (with wife, the "Patriarch/SAHMs").

When these families have babies, the mother faces biological demands in late pregnancy, delivery and lactation that the father cannot meet.  This is true for both the Peers and the Patriarch/SAHMs.   In the Peers, these biological demands mean that working may be more difficult or even impossible and thus the mother's income understandably drops during this time.   In the Patriarch/SAHMs the mother by definition doesn't earn money so there is no income lost during this time.

The father does not face these biological demands, although many men do participate, helping the mother with the demands she faces as well as directly taking on the demands of the baby after s/he is born that he can meet (which is basically everything except breastfeeding).   In the Peers, the man does this; the Patriarch/SAHMs, he does not.  In the Peers, he takes a parental leave after the mother returns to paid work that matches hers in time and his income drops during this time.  In the Patriarch/SAHMs, the father by definition doesn't do this, so he doesn't face any change with the birth of the baby, except perhaps that unpaid work the mother used to do, such as family chores, don't get done and he may have to do them. He also faces no drop in his income, or only a small one, due to the demands of the unpaid chores.

As we move through the stages of (a) no pregnancy or baby, (b) late pregnancy, delivery, lactation and paternal leave (in the case of the Peers), and (c) 6-month old baby, here are the tax burdens and tax rates paid.  I'll also include a comparison at the retirement end where, for illustrative purposes, (i) both Justices are widowed and (ii) where their spouses are widowed.

[To be completed]