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Progressive maternity laws have spread globally. In many countries, maternity leave is paid for 26 weeks. Many countries execute this law. It’s a solution? Forced government intervention never works. The government’s will is partially enforced. Businesses discover a workaround. This article discusses how firms are circumventing these laws.
Taxes Lower Wages
First, entrepreneurs pursue profit. This means they’ll only buy a raw material if it’s cheaper than the finished product. Businesses won’t survive if they don’t. Wages follow the same rationale. Every employee’s revenue must exceed their wage. They’re freeloading if they don’t.
Maternity leave can be government-funded, employer-funded, or both. Despite appearances, other employees pay the fees. Consider paid maternity leave. All workers are taxed to raise these funds. Maternity leave doesn’t increase wages.
Paycheck redistribution. The employer pays the same. The government stores a portion and redistributes it later. All workers, regardless of gender and age, pay these taxes. Some workers won’t get paid maternity leave. The government also makes them pay.
Pay Disparity
Even if corporations pay for forced maternity leave, the effect is comparable. Corporations ensure that only concerned employees pay, instead of all employees paying a little fee so a few can gain. Forced maternity leaves contribute to the gender pay gap. Corporations are profit-seeking businesses.
Businesses must consider all costs, especially contingency expenditures, to achieve profit. When hiring staff, companies forecast whether they’ll have to pay maternity leave in the future. This is why future mothers generally earn less than their colleagues.
This could suggest the company discriminates. Not always. If companies paid men and women the same wages, males would make less. The gender pay disparity isn’t always a plot to enforce patriarchy. Profit-driven organizations don’t enforce patriarchy. This is the market working.
Organizations take other steps to adjust pay if paid maternity leave is mandated. Companies give expectant mothers lousy performance reviews. Since performance reviews are generally related to salary raises, the company recovers costs. It’s a six-month bonus. To recuperate losses, it cuts total pay.
Hire-Refusal
Forced maternity leave makes firms leery of pregnant staff. Modern labor mobility. Workers can switch jobs quickly. If an employer pays for six months of maternity leave and the employee leaves, the employer is liable. Airlines and schools, where many women labor, have experienced this.
Paid maternity absences cause uncertainty in these industries. Employers can’t plan or deploy female resources on top initiatives because their employment is uncertain. If businesses must pay their employees’ maternity costs, they will avoid recruiting prospects with a potential future cost.
The government must stop billing organizations. Leave maternity to the labor market. If enough workers believe it’s the employer’s responsibility to give paid maternity leave, they will have to. Long-term, voluntary contributions are preferable to coerced ones.
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