Connecticut’s Antidote to High Unemployment? More Regulation

by Carrie Lukas

Connecticut’s legislature just passed legislation to force employers to provide paid sick leave to workers, and Gov. Dan Malloy (D.), who supported the measure, will soon sign it. The move is being championed as a triumph for workers, but it’s bad news for Connecticut’s unemployed and for anyone who values the basic idea of freedom of contract.

The National Partnership for Women and Families paints the typical liberal picture of the benefits of such regulations:

. . . hundreds of thousands of workers in Connecticut will no longer have to report to work sick, spreading contagion to co-workers and to those they serve at restaurants, nursing homes, schools and other workplaces. Because of this law, parents will no longer have to leave sick children home alone or send them to school or daycare to infect other children. And because of this law, cash-strapped working families will no longer lose pay — and jeopardize their economic security — when illness strikes.

Yet this is a vast overstatement of the provisions’ benefits. After all, according to Department of Labor estimates, more than four out of five employers already provide workers with some form of paid leave. And while the minority of workers who don’t already have paid time off may enjoy this new benefit, they are also likely to find that it comes with costs (something the legislation’s champions ignore).

In particular, the costs of mandated benefits tend to result in lower take-home pay (as described by the Congressional Research Service). Employers that currently don’t offer workers paid sick leave will now have to consider their options: Sure, some may just shoulder the new burden, but particularly in this tough economy, others will inevitably seek ways to minimize and make up for these new costs, by consolidating jobs, reducing worker hours, or outsourcing.

The recent dismal economic report has many politicians scratching their heads about why the once mighty American jobs machine has stalled. The reasons are many, but one is manifest in Connecticut, where politicians are piling on mandates, making hiring more expensive, and showing that governments at every level want bureaucrats making decisions about how what was once referred to as the private sector should operate.

— Carrie Lukas is the managing director of the Independent Women’s Forum.