Prudential Monetary : Paid family and medical depart is a bit of the racial wealth hole puzzle

The COVID-19 pandemic has highlighted the extent to which financially vulnerable populations are exposed to economic shocks and that working Americans with lower incomes are the least likely to be protected from the effects of the pandemic on employment, health, and finances.

According to a study cited in a new report by Prudential, Paid Family and Medical Leave: Helping to Close the Racial Wealth Gap, workers who need them most – including people of color, women, gigs, and younger workers – often lack access to benefits such as health insurance, home office options and paid vacation as with higher-income colleagues. And black Americans are over-represented in this subgroup for a number of reasons, including historical and systemic barriers to wealth-building programs and a greater likelihood of working in low-paying jobs or with employers that do not offer such benefits.

The paper follows a Prudential report that highlights the importance and unevenness of paid vacation benefits across the employment spectrum and calls for a public-private partnership to create a national PFML program.

This new report highlights paid vacation as an important aspect of a fairer economic recovery from COVID-19, citing data on the already precarious financial situation of many Americans.

“Sixty-nine percent of Americans say they live from paycheck to paycheck,” said Jamie Kalamarides, president of Prudential Group Insurance. “This means that millions of people are simply unable to survive an unexpected change in their ability to work under normal circumstances – the conditions of the COVID-19 pandemic have made them an unsustainable reality.”

“The alarm has been sounding for a long time, but now you’ve turned into a siren,” he says.

The paper calls for national paid family and sick leave to give low-wage Americans greater financial stability and examines the role this could play in bridging the racial wealth gap. She calls the Great Recession a warning, as its uneven recovery has left an even larger wealth gap between black and white American households. The paper also highlights statistics on the financial health of black households compared to white households, including home ownership rates (44% vs. 74%) and a difference in median net worth that has grown to over $ 160,000.

“The COVID-19 pandemic has made it clear that US workers have disproportionate access to paid medical family vacations – especially for women and people of color who are most affected,” said Lata Reddy, senior vice president of Inclusive Solutions at Prudential Financial . “Prudential has been advocating a permanent, comprehensive, national solution since 2017 and we will continue to advocate inclusive policy as part of a systemic solution with even greater urgency to bridge the financial gap.”

Currently, there is no federal law requiring employers to offer any type of paid vacation to employees who are unfit for work due to personal illness or who are required to take time off to care for a family member. What now exists is a patchwork of employer-provided short-term disabilities that only some workers have access to, limited government social assistance programs, and a social security disability income for workers who develop a disability. But none of these programs guarantee the full two weeks of paid sick leave required to meet quarantine recommendations, and no nationwide paid vacation program covers care leave associated with school or childcare closings.

In fact, the paper highlights that only 30% of the worst paid private sector workers in the country have access to paid sick days, compared to 93% of the best paid. And black women tend to be more disadvantaged because they are more likely than white women to live in multigenerational households and take on a caring role. During the pandemic, the employment of unmarried black women declined 10%, compared to 6% for their white counterparts.

“These differences accelerate the need for action and deepen Prudential’s advocacy of a public-private partnership to create a comprehensive paid vacation solution that is consistent across the pay spectrum,” said Kalamarides. “We welcome the signing of the Families First Coronavirus Response Act (FFCRA) in March 2020 and the American Rescue Plan Act earlier this year as emergency measures in response to the economic impact of the COVID-19 pandemic. An overwhelming number of Americans agree that the federal government must act to provide better and lasting access to paid family and sick leave, and Prudential is keen to join in that effort. ‘