Paid Leave Won't Destroy Social Security, But Improve It

  • Forbes | by: Carrie Lukas |
  • 07/02/2018
When most people are asked about paid leave, they just want to make sure that workers have access to this important benefit.  Yet inside the beltway, people know the devil is in the details, and that even the best-intended programs can backfire and harm those that they are meant to help.

That's why it's so important for any proposal to be carefully vetted by as many experts as possible.  Both the Heritage Foundation and Mercatus reviewed a recent proposal laid out by the Independent Women's Forum, in a paper written by Kristin Shapiro, to reform the Social Security program to give workers the option of accessing paid maternity/paternity benefits.  Both reports express concerns that this proposal would aggravate the already-precarious financial position of Social Security, ultimately harming the safety net and burdening taxpayers.

These are important considerations, but both analyses miss important factors that would make these reforms a win for those concerned about the overall levels of public spending and our entitlement programs—as well as make our safety net better and more efficient.

Social Security Is Already Based on Trade-offs

The foundation of the proposal to reform Social Security is a trade-off:  Workers who opt to take a parental benefit after having or adopting a child are agreeing to delay access to their retirement benefits to compensate for those costs. Both the Heritage and Mercatus papers express concern that policymakers will undermine this concept.  They will decide it seems unfair or harsh to penalize those who took parental leave, so ultimately do away with the pay for, leaving the parental benefit as just a costly new entitlement program run through the Social Security system.    

Yet this concern seems unfounded, and ignores how the concept of trade-offs is already baked into Social Security.  It would be a concern if under current law everyone was guaranteed the same benefit at retirement, and that solely those who took parental leave would face a lower or altered payment schedule.  But that's not how Social Security works.  Benefits are already calculated based on each individual's earnings history so that everyone who receives a retirement benefit has a personalized amount based on his or her decisions about work and retirement date.

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