Diana Petrak
Another legislative period at the Capitol in Denver is already in full swing, but what is missing is noticeable. It did not welcome any serious discussion of one of the most momentous laws to date for Colorado’s workers, businesses and the economy. The paid family and sick leave that passed in November is quietly waiting for the lengthy implementation process. Instead, it should be a prominent background for this session. This represents an impending uncertainty for the economy.
The measure was premature at best. It has been boldly worked out in terms that go too far. It will be a disappointment and a setback for workers who many now expect only to bring benefits and relief.
The spreading impact of this approach on paid leave is widely recognized. There is growing doubt that previous experiments in Western Europe and the few early states such as California, New Jersey, and Rhode Island have met with great success. All of these struggle with poor results. They face the painful situation that these benefits and the vast infrastructures that support them are inevitable and difficult to adjust, once granted.
Presumably the goal is upward mobility. A program that fails to fairly reach low-income and low-skilled workers, increases the cost of living while lowering takeaway pay and slowing job opportunities that could fuel career and wage growth is not a formula for success for upward mobility. Instead, it is a means of reducing productivity. It repels business investment and entrepreneurship. Most disappointing, however, it creates obstacles to ongoing efforts to update management and organizational practices. These are critical to bringing mutual benefit to workers and consumers in rapidly changing environments.
After all, it undermines business diversity. It imposes ill-suited policies on small independent businesses. They are already under pressure from growing competition and burdensome regulations at all levels of government. Together, these strain their productivity and valuable resources, leaving their viability open.
The approval of Prop 118 by nearly all of Colorado’s Democratic leaders sent a strong message to voters that the measure is trustworthy. It also showed a lack of interest in the plight of small businesses that are vulnerable to the almost unprecedented occupational health and safety requirements for workers on leave. Prop 118 dictates it to companies with only one employee, although little is understood about possible outcomes. Compliance could be an unsustainable hardship.
We all recognize the urgent need to facilitate the participation of working carers. However, trust in this expansive political model as a solution is not deserved. Proponents have relied on theories and simulation models that, as sophisticated as they may be, have no direct and indirect costs and risks that affect decision-making when politics becomes tangled in a business setting. These variables are absent because they are extremely difficult to track and measure, and vary widely by type of company. But also because proponents downplayed those concerns and dodged the efforts of the vast, diverse business community that has seriously tried to share them.
Businesses succeed and fail in environments where there is usually market uncertainty. That will never change. It can’t change. Stagnating economies are stable – but not good. Proponents believe that government and regulatory solutions like paid vacation will remove the uncertainty for workers from these environments. You will not. They will only manage to suppress it.
The tragedy is that large and small workplaces and forums across the economy have built energy and determination to address caregiver conflicts. In these many unique contexts, these efforts are likely to back off and continue. This great, comprehensive program sends a message that the problems are resolved. But companies know it’s not that easy. Decision-making has already evolved in anticipation of challenges.
In the meantime, the prospects for job creation are becoming increasingly unclear. Recent and proposed government measures further threaten the balance between workers and businesses. These encourage distrust and litigation. The resulting compliance is complex, expensive, and overwhelming for many. This interferes with the primary role of companies serving customers, supporting their employees and co-workers, and being here another day.
Whether or not Colorado’s economy can outgrow the challenges of the new paid vacation program is unknown. A delayed recovery, however, is likely to be influenced by a business community that understands the salient risks of government policies that create an anti-employer environment and discourage hiring.
Diana Petrak is the founder of Colorado Policy Pathways. She was a member of the 2019 Colorado Family and Medical Leave Insurance Task Force.
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