Connecticut at the start of 2012 became the first state in the nation to require firms in the service sector with at least 50 employees to offer paid sick days. We're still the only state with that mandate, although several large cities have it including New York.
So how's it going after two years? Opponents said it would cost the economy millions of dollars when we could least afford it, while supporters said it would boost productivity and add to prosperity.
A year ago, a right-leaning group, the Employment Policies Institute, issued a report saying the cost to employers was high — some were curtailing workers' hours, some raising prices, some cutting other benefits.
Then this week a left-leaning group, the Center for Economic and Policy Research, announced that one of its economists, along with an economist at the City University of New York, concluded — surprise, surprise — that paid sick leave in Connecticut is a "non-event" that's widely accepted by employers, though a few have seen higher costs. The media duly reported it.
Who's right? The best way to understand the picture is through the scene in "Annie Hall," the Woody Allen movie of 1977 with Diane Keaton in the title role. Allen's and Keaton's characters are talking on a split screen with their respective shrinks, who ask them, how often do you have sex?
"Hardly ever," Allen's character says. "Maybe three times a week."
"Constantly," Keaton's Hall says. "I'd say three times a week."
So it goes with the reports on Connecticut's paid sick leave. Looking at the numbers, the EPI last year, and the CEPR and CUNY researchers this year, found basically the same results. If anything, the report that claimed the law is a non-event found more of an effect than the opponents.
Eileen Appelbaum at CEPR and Ruth Milkman at CUNY produced a scientific poll of companies affected, gleaning answers from 251 firms, a 36 percent response rate. This included a vast majority that already offered paid sick leave, voluntarily – as most companies do, part of the basic package of worker benefits.
Firms that raised prices, 16 percent; reduced employee hours, 11 percent; reduced wages, 1 percent. Ten percent of employers reported that the law increased payroll costs by at least 3 percent.
EPI, not to be confused with the larger, left-leaning Economic Policy Institute, attempted in its report to find the companies that would be most affected – such as restaurants, many of which had opposed the law, and school bus companies. The fact that no sane citizen would want sick bus drivers and restaurant workers on the job seemed beside the point.
Naturally, EPI found a decent number of firms among its 156 respondents that were seeing higher costs:
Firms that had raised prices, 12 percent; reduced employee hours, 8 percent; reduced wages, 4 percent. EPI also found that 20 percent said they had cut back employee benefits, reduced vacation time or both.
So, especially considering the EPI report attempted to find the most hard-hit firms, the results are amazingly similar.
I credited EPI a year ago with not overstating its conclusion based on thin data, but it still concluded the law was costly to many employers. Likewise, Appelbaum and Milkman don't claim the law is a non-event for everyone, just for the economy as a whole.
So here's what we have, two full years in. The law, which allows workers to earn as many as 5 sick days a year based on total hours, definitely hits some firms and obviously we can easily document how they're affected. They have appropriate ways of dealing with it including raising prices and cutting other worker benefits. As non-tech, non-manufacturing firms, they're competing locally on an even playing field.
Overall, naturally, the vast majority of firms are barely affected if at all.
Some report a strained relationship with employees where none existed before, the EPI report said. But in the Appelbaum/Milkman report, 15 percent report higher productivity and 30 percent report higher morale; that's a much harder story to tell. They also reported that the average employee used four sick says a year, only about half of the 7.7 that were available, on average.
I said this nearly three years ago in a column: "Paid sick leave at its worst is not as bad as opponents say it is, nor is it a particularly big step forward for Connecticut's low-wage workers, who have fallen behind even as their employers have regained healthy profits." The reports back up that prediction.
Now the policy ought to spread to other states, making Connecticut less of an economic outlier.