Our Opinion: The cost of mandated paid leave is too much
A proposed state plan establishing paid family and medical leave for Minnesotans has its heart in the right place. However, the price tag to fund it would be too much of a burden on employers and employees already paying some of the highest taxes in the nation.
Currently, federal law guarantees 12 weeks of unpaid family and medical leave for most workers, but just 14 percent of Americans have access to paid leave through their employers.
Gov. Tim Walz and DFL legislators are pushing a plan that would allow up to 24 weeks a year of partially paid leave—12 weeks for family leave and 12 weeks for medical leave—funded through a payroll tax on employers and employees. A recent report from the state's budget office estimates the program would cost about $450 million in 2021, its first year, and $900 million annually once fully implemented. The program would also require an additional 352 state workers to administer.
That plan, if implemented, would be on top of benefits such as health care and paid time off already offered by companies. While it certainly would help employees facing potential financial crises, it also could wind up as a financial anchor around the necks of the businesses that employ those people.
The taxes the state currently collects pay for wonderful things—infrastructure, education, health care, just to name a few—but at what point is it too much? Minnesota is already near the top of the list of most taxed states in the nation—fourth in corporate taxes and fifth in individual income taxes. Not exactly a proud accomplishment, so why exacerbate the problem with another expensive tax and another unnecessary government bureaucracy?
While we realize Minnesota is also near the top when it comes to quality of life, which in some aspects can be attributed to the generosity of our taxpayers, we fear the state may be reaching a breaking point when it comes to taxes on businesses.
Compassion for employees facing emergency situations is noble, and we're all for employees having the ability to receive paid time off for myriad circumstances. What we don't believe is that the government should be mandating such leave, placing the burden on companies of all sizes to pay for it. Some businesses simply won't be able to.
Instead, we believe it should be up to the individual companies to offer paid leave as a benefit. We're not so naive to believe that many will, but it's a truth that the companies offering the best benefit packages will get the best candidates for open positions. Right now there's no shortage of job openings in this area, meaning competition for and need to retain skilled labor is at a peak.
We can't imagine many businesses, especially small businesses, in the Brainerd lakes area being able to conform with this plan without making drastic changes to how they operate. Paid leave would need to be budgeted for every year, whether it's used or not. To offset it could lead to price increases, staff reductions and ultimately businesses closing.
Yes, the paid leave plan would appear to be a non-starter in the Republican-controlled Senate, but it's still worth sending a message to Walz and the DFL—the job market should drive employee benefits, not a government mandate.