New York City’s paid sick leave law has hardly affected employers at all. Win!

New York City Passed Paid Sick Leave, and Guess What? It Didn’t Kill Any Jobs.

New York City Passed Paid Sick Leave, and Guess What? It Didn’t Kill Any Jobs.

Moneybox
A blog about business and economics.
Sept. 7 2016 5:28 PM

New York City Passed Paid Sick Leave, and Guess What? It Didn’t Kill Any Jobs.

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Go home, dude.

AndreyPopov/ThinkStock

Over the past decade, the movement for paid sick leave has been one of American progressives’ greatest policy triumphs. Since San Francisco first passed a law guaranteeing workers one hour of paid sick leave for every 30 hours worked, in 2007, the policy has been adopted in five states, 26 cities, one county, and Washington, D.C., according to A Better Balance, a New York–based labor advocacy group.

Henry Grabar Henry Grabar

Henry Grabar is a staff writer for Slate’s Moneybox.

It’s also become a White House priority. In 2015, President Obama called for states and cities to enact paid sick leave laws, ordered federal contractors to provide workers with paid sick leave, and asked Congress, in his State of the Union speech, to put a bill on his desk.

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Obviously, that didn’t happen. Instead, the issue has been fought over at the local level, with Democratic cities and states passing paid sick leave. Almost a dozen Republican statehouses, meanwhile, have passed laws to void municipal sick leave policies, arguing that the policy is bad for business and shouldn’t be instituted at the local level.

New York City ought to be a good test for both of those points. In 2013, the City Council overrode then-Mayor Michael Bloomberg to pass the Earned Sick Time Act. In 2014, under Mayor Bill de Blasio, the law was revised to cover all businesses with more than five workers, down from 15.

Did a labor force of hypochondriac slackers cause businesses to relocate to Nassau and Westchester Counties? It doesn’t look like it: New York City’s share of metropolitan employment has actually increased, slightly, in the two years since the revised law took effect.

In fact, according to a new paper from the Center for Economic and Policy Research by the economist Eileen Appelbaum and the sociologist Ruth Milkman, the business community in New York has largely perceived the law’s passage as a “nonevent,” even though more than 3 in 4 employees at the surveyed firms made use of paid sick leaves in 2015.*

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Their survey of 350 random New York businesses, stratified to appropriately represent different firm sizes, says: 85 percent of employers reported the law had no effect on business costs, 91 percent reported no reduction in hiring, 94 percent reported no effect on business productivity, and 96 percent reported no change in customer service.

That jibes with findings from other cities published by the U.S. Department of Labor in October. San Francisco has outperformed surrounding counties in job growth since the passage of its policy in 2007. Likewise, analyses of Seattle and Washington, D.C., found negligible impacts on hiring and business location. A ton of research has also shown that flexible leave policies have a positive effect on worker productivity, happiness, and health.

Still, New York is by far the biggest municipal test case—and one where businesses have easy exit opportunities not just to surrounding counties but to different states.

Interestingly, the sector where workers are least likely to take advantage of paid sick leave is the one where consumers would most appreciate it: the hospitality industry. All other sectors reported more than 70 percent of employees taking advantage of paid sick leave, but leisure and hospitality is at 53 percent. The authors suggest this is probably because restaurant workers make most of their income in tips, so having their wages recompensed doesn’t make up for a lost shift.

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The businesses that have struggled most with the policy are the ones where work can’t be shifted between employees. That included hair salons and yoga studios, for example, where a sick stylist or teacher could lead to lost revenue in a way that a missing plumber or bartender would not. (On the other hand, do you really want a man with the flu running his fingers through your hair?)

All told, though, the paper is a notch in favor of cities advancing their own paid sick-leave laws.

Don’t expect it to convince GOP governors like Wisconsin’s Scott Walker and Arizona’s Doug Ducey, who have signed pre-emption laws outlawing local employment benefit policies. They can cite a loosely reasoned report from a Washington state think tank called the Freedom Foundation, pushed on the op-ed pages of the Wall Street Journal and the Bergen County Record, which says that “mandatory paid sick leave laws consistently have moderate negative consequences for affected businesses.”

Personally, I find the nine “important conclusions and trends” from that widely cited report a little underwhelming. They include:

  • “Workplace illness does not appear to be a widespread problem"
  • “Most firms voluntarily offer paid sick leave benefits without being required to do so by law,”
  • “Some paid sick leave laws are designed to promote union organizing.” (?)
  • And: “Workers come to work sick just as often with a mandatory paid sick leave policy as they do without one.”

If that last one is true, then what harm do the policies cause? If it’s not true, it’s great news for this New Yorker, who doesn’t want his barber sneezing on his head.

*Correction, Sept. 8, 2016: This post originally misidentified the Center for Economic and Policy Research as the Center for Policy and Economic Research.