Wake up daily to our latest coverage of business done better, directly in your inbox.


Get your weekly dose of analysis on rising corporate activism.

Select Newsletter

By signing up you agree to our privacy policy. You can opt out anytime.

American Sustainable Business Council headshot

Policy Points: Policies for a Sustainable Workforce

By Richard Eidlin

Voluntary corporate sustainability initiatives and social enterprises are essential, but are not game changers by themselves. In addition, we need laws and regulations that guide our economy toward sound, long-term decision-making, with full recognition of social and environmental externalities. As business leaders, we can and must support policy changes to help make the economy more sustainable.

A sustainable economy will depend on a sustainable workforce, one that is educated, adequately compensated and valued humanely. Here are three important policies that will help – and specific actions you can take.

1. Make Earned Sick Days the Law

One component of a good workplace is a system that enables workers to recuperate from illnesses at home, rather than having them come to work when they are not at their most productive. There is a strong business case for paid sick days – they help improve productivity, reduce health care costs, maintain consumer confidence, and avoid costly employee turnover.

In 2007, at least 145 countries provided some form of paid sick days to all employees. The United States is one of the few countries that does not require employers to provide sick days. Currently six cities and Connecticut do require it, but ten states have passed laws blocking localities from passing those laws. That means many employees feel pressure to come into work even when they’re sick.

What’s at Stake

According to the Integrated Benefits Institute, businesses lose $227 billion each year to lost productivity due to illnesses. That includes workers who take days off, but also those who show up but don’t perform well because they are sick.

Requiring paid sick days will deliver important business benefits. It will keep employees healthier and more productive, while alleviating the costly problem of employee turnover. It will also help ensure that consumer confidence remains high. By giving employees a chance to stay home and recover, businesses will know that their employees will come back to work refreshed and able to work harder.

What You Can Do

2. Require Family Medical Leave Insurance

Family Leave Insurance allows employees who need to take time off to care for a family member, or following the birth of a child, to continue to earn some compensation during that time off. Despite concerns about imposing additional costs on businesses, this kind of insurance is beneficial because it makes employees more productive and less likely to look for other jobs.

On a state level, California, New Jersey and Washington state have all passed family leave bills. (Issues with funding have put the Washington state bill in limbo and kept residents from enjoying its benefits.) Rhode Island also passed a bill recently that will take effect in 2014. In both New Jersey and California, the plans offer partial wage replacement – for example, two-thirds of weekly pay in New Jersey – funded by an employee-paid payroll tax.

What’s at Stake

Far from being a burden for businesses, lack of a family leave policy poses a number of challenges for business. Companies lose money when their workers are less productive and less satisfied, which they are when not given time to care for sick family members. If and when those workers decide to seek employment elsewhere, businesses have to spend more money to replace those employees and train new hires. This is money they cannot use to expand their business or make needed investments.

States which have fully implemented paid family leave laws, such as New Jersey and California, have seen those laws become immensely popular among voters and businesses, without resulting in higher business costs. Many businesses have reported positive effects on employee turnover and productivity; about 60 percent of California businesses also reported cost savings by coordinating their benefits with the state program.

What You Can Do

3. Raise the Minimum Wage

One of the biggest challenges to the sluggish economic recovery is that real wages have not increased despite many businesses showing record profits. Consumer spending is at the heart of our economy and with little to no wage growth, overall economic growth will suffer and the recovery will not be durable. The Fair Minimum Wage Act of 2013 not only would bring the minimum wage closer to where it should be adjusted for inflation, but also would address the largest problem business leaders see with today’s economy: weak demand.

What’s at Stake

Workers are also customers. Minimum wage increases boost sales at local businesses and beyond as workers buy needed goods and services they could not afford before. And nothing drives job creation more than consumer demand. Businesses also see cost savings from lower employee turnover and benefit from increased productivity, product quality and customer satisfaction. Increasing the minimum wage will also reduce the strain on our social safety net caused by inadequate wages.

Contrary to what traditional business lobby groups say, two-thirds of small business owners support raising the minimum wage, recognizing that low-wage workers with more money to spend will help the economy.

What You Can Do

Policy Points is produced by the American Sustainable Business Council. The editor is Richard Eidlin, Director – Public Policy and Business Engagement.

[Image credit: WSDOT, Flickr]

American Sustainable Business Council headshotAmerican Sustainable Business Council

The <a href="http://asbcouncil.org">American Sustainable Business Council (ASBC)</a> is a network of companies and business associations. Its column, Policy Points, identifies public policies where a business voice, grounded in principles of innovation, fairness and environmental stewardship, can make an essential difference in the advocacy process. The goal is to arm readers with information and specific actions to take. As business leaders, we can and must support policy change to help make the economy more green and sustainable. The column editor is Richard Eidlin, ASBC's Vice President - Public Policy and Business Engagement.

Read more stories by American Sustainable Business Council