By Lily Jamaludin

Imagine having to choose between caring for a loved one and trying to pay the bills. That’s the decision millions of workers in middle- and lower-income families face as more and more Americans must provide care for an older relative.

This week, the AARP released a report entitled “Keeping Up with the Times: Supporting Family Caregivers with Workplace Leave Policies.” The report highlights the necessity for public policies to address the needs of an increasing number of working caregivers. “Keeping Up with the Times” examines three public policy solutions: unpaid family and medical leave; paid family and medical leave insurance; and, earned sick time.

The AARP reports that:

• More than 60 percent of workers aged 45-74 years old have caregiving responsibilities for an aging or other adult relative
• 17 percent of workers aged 45-74 have taken leave from a job in the past 5 years to care for an adult family member
• Of those workers who took family or medical leave in 2012, 34 percent received no pay
• 48 percent of family caregivers who took time off for eldercare responsibilities lost income

Currently, the Family and Medical Leave Act (FMLA), which was enacted twenty years ago, is the only major federal public policy that addresses the need to take time off for family care. The FMLA enables workers to take up to 12 weeks of unpaid job-protected family leave, but only if they work in firms that meet certain criteria, such as having 50 or more employees. Thus, 60 million workers are not covered by the FMLA. According to the AARP report, of the workers who were eligible for the FMLA but did not take leave, 46 percent said they could not afford to take unpaid leave, and 17 percent said they feared losing their job.

Some states have taken steps to address the unmet needs of workers who must take time off to care for family members. Rhode Island is currently considering paid leave for family caregivers that would allow workers to continue receiving pay for up to eight weeks while caring for a newborn or a sick family member. California and New Jersey have adopted a paid family leave (PFL) insurance model, which offers full or partial income replacement while a worker is away for family care.  It is funded through very modest employee contributions made through a payroll deduction.

Research has shown that such paid leave actually strengthens businesses. According to a 2011 Center for Economic and Policy Research report on California’s paid leave program, “Most employers report that PFL had either a “positive effect” or “no noticeable effect” on productivity (89 percent), profitability/performance (91 percent), turnover (96 percent), and employee morale (99 percent).”  A report by the National Partnership for Women & Families (NPWF) found that paid leave encourages worker retention and significantly reduces high turnover costs, which can range from 25 to 200 percent of annual compensation on average. Further, this report documents that paid leave increases worker loyalty and productivity, improves the competitive advantage of smaller businesses, and heightens American business’ competitiveness in the global economy.

Paid leave policies such as those in California and New Jersey are necessary to meet the realities of a changing demographic. According to the NPWF, the number of older Americans is growing and is projected to make up 20 percent of the population by 2030, increasing the need for caregivers. Further, more women than ever before are a part of the paid labor force; these women must balance the demands of work and caregiving. Not having access to paid leave threatens working caregivers’ abilities to maintain financial stability and take care of their loved ones.

If Americans hope to see a thriving and growing economy, then we must enact public policies that enable us to take care of the health, well-being, and financial stability of workers. As this AARP study and others have shown, what is good for workers is also often good for business.