Friday, June 23, 2006

Family Leave Expanded in Massachusetts

Tibor R. Machan

TIME leads off its June 26, 2006, central story as follows: “Every new parent knows that having~a baby means weeks without sleep. Should it also mean weeks without a paycheck?” The suggestion is that TIME is in favor of forcing companies pay families whose members cannot show up for work, or at least considers it a palatable development in public affairs. Rush Limbaugh spent some time with the item one days but he missed the major problem.

It is well known that one of the serious impediments to entrepreneurship throughout Europe is that companies are bound by labor laws to provide employees with nearly cradle to grave security. In consequence of this, these countries are experiencing slow growth and minimal start-ups in business. No wonder. If by law, not by freely formed employment agreement (that could contain some kind of mutually accepted exit option and heed market conditions), employees must provide innumerable benefits to employees, those thinking of starting a business will hesitate and often desist. Their investment will have to be calculated accordingly and will turn out to be far greater than market conditions may justify. Ergo, no business. Ergo, no employment. Which accounts for double digit unemployment figures in France, German, Spain, and elsewhere.

In the quasi-free market, capitalist U. S. A., in contrast, there are no federal laws mandating the provision of extensive benefits to employees, at least not yet. The Massachusetts legislature will not rest easy with this and is, accordingly, mimicking the German labor laws.

Of course, this will appear to be all so “generous” (with others’ resources) to those who will take advantage of the extended family leave. However, such coercive imposition of benefits ignores market conditions and therefore isn’t likely to be economically sound.

It seems like the legislators in Massachusetts and others who are pushing for these sort of Draconian labor regulations have not learned anything from the collapse of Soviet socialism. The entire Soviet bloc was rife with these kinds of laws—many people in those societies destroyed by such laws still pine after them nostalgically, unaware or forgetful of the damage such a system did to millions of people. The dream of guaranteed welfare provisions, put on the backs of people in the business world, can appear to be very cool until one tries to live them for a while. Then shortages, low wages, unemployment, lousy services, and mounting abuse finally calls attention to how terrible it is to be guided by such dreams.

A country that leaves business to fend for itself—i.e., no subsidies but also no mandated benefits to employees—may not appear to be sweet and lovely until one checks out its history, its employment market, its overall productivity. There cannot be too many false promises in such a country. Thus many shortsighted folks will find it wanting: “I might lose my job,” “I may have to wait with having kids until I can really afford having them,” or “My family will have to save up for children and the care they require and not be able, legally, to dump the cost on others.” Yes, all this sounds awful.

Except that it is a far more realistic, and ultimately successful, approach to the employment situation. Massachusetts's politicians, of course, have been bathing in this dream world, what with Edward Kennedy & Co. in leadership positions there and the Boston university community awash with promoters of socialist public policies and methods.

Yet there is a chink in their armor, even apart from how bad their ideas are for the economy and from their very own point of view. These very same folks who dream of a socialist paradise here on earth are also strong advocates of population control and environmental precaution. Well, here is the news: promoting extended family leave and other mandated family benefits which help people avoid coming to grips with the full cost of parenthood is just the sort of policy that will increase child bearing. That, in turn, will be added burden to the environment, as well as to the public school system and all sort of related facilities the same parents who expect a free ride in these areas will expect in other areas of their lives.

At that point, look out. The prospects for a Soviet style meltdown will be approaching. In contrast to the anxieties associated with the free market capitalist system, that meltdown will be a true disaster all around.

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