The axiom Those who cannot do, teach needs a companion rule: Those who cannot understand, regulate. We saw the outcomes of this in ObamaCare, when people who could not grasp the basics of risk pools took it upon themselves to completely upend the health-insurance market and impose mandates for coverage. The result in that case was a dumbed-down, one-size-fits-none outcome that even its supporters are now beginning to dimly realize doesn’t equate to actual care, but which hiked costs unnecessarily on millions who don’t really need comprehensive insurance at all. For the rest, the need to hold premiums down resulted in gigantic deductibles that anyone who took Econ 101 could have predicted, and which makes these plans nothing more than vastly overpriced catastrophic insurance.
The same activists who managed to get risk pools completely wrong have been trying to rework labor policies to be “family friendly.” They argue that because happier employees are better employees, giving workers lots of time off for family events won’t actually cost employers money in the long run. The New York Times finds itself shocked, shocked that imposing those requirements ends up being a War On Women:
Family-friendly policies can help parents balance jobs and responsibilities at home, and go a long way toward making it possible for women with children to remain in the work force. But these policies often have unintended consequences.
They can end up discouraging employers from hiring women in the first place, because they fear women will leave for long periods or use expensive benefits. “For employers, it becomes much easier to justify discrimination,” said Sarah Jane Glynn, director of women’s economic policy at the Center for American Progress.
Unlike many countries, the United States has few federal policies for working parents. One is the Family and Medical Leave Act of 1993, which provides workers at companies of a certain size with 12 weeks of unpaid leave.
Women are 5 percent more likely to remain employed but 8 percent less likely to get promotions than they were before it became law, according to an unpublished new study by Mallika Thomas, who will be an assistant professor of economics at Cornell University. She attributed this partly to companies that don’t take a chance on investing in the careers of women who might leave. “The problem ends up being that all women, even those who do not anticipate having children or cutting back in hours, may be penalized,” she said.
Well, duh. These so-called “family friendly” policies have added both risk and cost to female employees, even those who may or may not eventually want to take advantage of those policies. Economically, that works like a tax, and taxes act as disincentives (a point on which ObamaCare both relied and ignored with the Cadillac-plan tax). The more an activity gets taxed, the less businesses and consumers in general will engage in it — and businesses are consumers of labor. It’s a slightly more complex calculation of the law of supply and demand.
As the NYT’s Claire Cain Miller notes in the beginning of the article, this impact isn’t theoretical.A law in Spain required employers to allow for part-time work for mothers of young children, and now businesses aren’t incentivized to hire women full-time any more after most of the people who claimed that right were female. Women got paid less in Chile after employers got stuck with the bill for child care, for instance. The compensation overall may not have actually changed, but when child-care costs got transferred to the employer, the costs came out of the direct compensation for those workers and others similarly situated.
These are nuances that don’t respond to mandates. It’s akin to the repeatedly debunked assertion that women only earn 77 cents on the dollar compared to men; the difference is actually almost insignificant for people in the same jobs making the same choices. Men and women make choices about employment based on a broad range of values and circumstances, and employers do the same in hiring and promotion. People are not widgets that can be shifted in and out of positions, but individuals who have different talents, levels of commitment, and availability. Forcing businesses to ignore all of that in favor of these kinds of mandates ends up hiking the risk to such an extent that they avoid it as much as possible, and the people who end up paying that price will be women.
Maybe someone should ask these activists why they’re so insistent on conducting a War On Women.