The Cost of Doing Nothing - 2023 Update

By: Sarah Jane Glynn. The Price We STILL Pay without Policies to Support Working Families. In 2015, the U.S. Department of Labor issued a report titled The Cost of Doing Nothing that flipped a common question on its head. Rather than focusing solely on the cost of implementing policies to support working families, the report estimated the economic costs of not having such policies in place.

The Cost of Doing Nothing - 2023 Update
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UNITED STATES DEPARTMENT OF LABOR | THE WOMEN’S BUREAU

ADVOCATING FOR WORKING WOMEN SINCE 1920!

In 2015, the U.S. Department of Labor issued a report titled The Cost of Doing Nothing that flipped a common question on its head. Rather than focusing solely on the cost of implementing policies to support working families, the report estimated the economic costs of not having such policies in place.

At the time of the report, the U.S. was a global outlier among comparable economies because it did not guarantee working parents the right to any paid days off from work to care for a new baby or a sick or injured family member. In 2015, less than two-thirds of private sector workers had access to paid sick days and just 12% had access to employer provided paid family leave. Only four states and the District of Columbia (D.C.) had earned sick leave laws and only three states had enacted state paid family and medical leave programs. Among member countries in the Organisation for Economic Co-operation and Development (OECD) the U.S. was in the bottom one-third for public spending on early childhood education and care. Because women are more likely to provide care to children and other family members, these policies, or lack thereof, impact women’s income and participation in the labor force. When the report was published in 2015, the annual labor force participation rate of women between the ages of 25 and 54 (defined as those in their prime working years) was at its lowest rate in a quarter-century. This meant that relative to peer countries, the U.S. was at the bottom of the distribution—31st out of 38 OECD members.

The costs associated with this policy deficit and the effects on women’s earnings were broad ranging. Individual workers lost income and had difficulty making ends meet, families experienced more stress and worse health outcomes, and employers paid the price through increased turnover and more difficulty recruiting workers. In the original report, the Department of Labor’s Chief Economist estimated that if women between the ages of 25 and 54 participated in the labor force at the same rate as they do in countries with paid leave and other policies aimed at supporting working families, like Canada or Germany, the labor force would grow and in turn increase gross domestic product (GDP)—translating into more than $500 billion of additional economic activity per year.

2023 CURRENT CONTEXT

A lot has changed in the eight years since the report was published. As of 2023:

  • The labor force participation rate of prime working age women has reached new highs and at the time of this publication has remained above previously documented rates for six months.
  • Workers in 15 states and D.C. have the right to paid sick days, and 13 states and D.C. have enacted paid family and medical leave programs.
  • Certain employees working on covered federal contracts have the right to paid sick leave.
  • The rate of private sector workers with access to paid sick days has increased to 78%, and the percentage of workers with employer-provided paid family leave has more than doubled to 27%.

This represents a remarkable recovery after the employment upheavals of the pandemic and a meaningful level of progress in less than a decade. But the U.S. remains far behind peer countries when it comes to policies to support working families. While the U.S. has enacted some paid leave protections for federal workers and contractors, there are still no national policies guaranteeing access to paid sick leave or paid family and medical leave to the vast majority of workers, including private sector workers. Internationally, the U.S. has fallen from 25th to 26th out of 36 OECD countries when comparing early childhood education and care expenditures. While women’s ability to participate in the labor force has rapidly rebounded after the upheavals of the pandemic, in 2022 the U.S.’ global ranking remained unchanged at 31st out of 38 OECD countries. And when comparing women’s labor force participation rates in the 15 countries with the largest GDPs per capita, the U.S. came in last.

ANNUAL LABOR FORCE PARTICIPATION RATES, WOMEN AGES 25 - 54, 2022

SWEDEN: 88.9%

LUXEMBOURG: 86.9%

FINLAND: 86.8%

AUSTRIA: 86.6%

ICELAND: 86.6%

SWITZERLAND: 86.1%

NETHERLANDS: 85.5%

DENMARK: 85.2%

CANADA: 85.1%

NORWAY: 83.8%

GERMANY: 83.4%

BELGIUM: 81.9%

AUSTRALIA: 81.7%

IRELAND: 80.3%

UNITED STATES: 76.4%

Source: OECD Stat, LFS by sex and age

On the one hand, the U.S. is doing exceptionally well. The economy has recovered readily since 2020, and women in America are faring better on some metrics compared to prior years. Additionally, by international standards the U.S. economic recovery—in terms of GDP, core inflation, and the labor market—has been stronger relative to other economies.15 But, at the same time, there is still room for improvement and growth. The U.S. continues to lag peer nations when it comes to policies that support working families, public spending on care, and as a result, women’s labor force participation. 

UPDATED ANALYSIS

Updated analysis based on the original The Cost of Doing Nothing report finds that women in the U.S. still participate in the labor force at lower rates than those in Germany and Canada—two countries which have national paid leave and other family policies and higher rates of public spending on policies for families and children.

  • If women’s labor force participation were the same as in Germany and Canada, there would be roughly 5 million more women in the labor force.
  • This would then translate into more than $775 billion in additional economic activity per year.

 

THE BIDEN-HARRIS ADMINISTRATION’S COMMITMENT TO EXPANDING FAMILY SUPPORTIVE WORKER POLICIES

Investing in care infrastructure is a vital component of investing in America’s future because workers cannot fully participate in the economy if they and their loved ones aren’t receiving the care that they need. That’s why policies that reflect the realities of working families—like paid sick leave, paid family and medical leave, and investments in child care—benefit workers, employers, and the overall economy.

The Biden-Harris Administration has focused on ensuring that the Nation does not return to the pre-pandemic status quo, and aims higher to achieve an equitable recovery that exceeds the measures of the past. The Administration has announced myriad policy proposals to support workers with caregiving responsibilities, including making high-quality child care affordable and accessible; increasing funding for home—and community-based care; and supporting paid leave, workplace flexibility, overtime protections, and predictable scheduling. 

Among other actions, the Biden-Harris Administration has: 

  • Issued an Executive Order on Increasing Access to High-Quality Care and Supporting Caregivers, directing agencies across government to take concrete steps to make care more affordable, support family caregivers, improve job quality for care workers, and expand care options,
  • Coordinated efforts to increase access to care for the workforce involved in infrastructure investments, including through the Bipartisan Infrastructure Law, the Inflation Reduction Act, and the CHIPS and Science Act,
  • Signed into law the Pregnant Workers Fairness Act and the Providing Urgent Maternal Protections (PUMP) for Nursing Mothers Act, and continues to prioritize their implementation and enforcement,
  • Called for paid sick leave for all workers and the establishment of a national, comprehensive paid family and medical leave program,
  • Worked with states to expand access to paid leave benefits,
  • Invested American Rescue Plan funds to prevent the mass closure of child care providers, while continuing to take action to expand access to affordable child care and improve care jobs, and
  • Issued the 2022 National Strategy to Support Family Caregivers, and strengthened the nation’s long-term care system through investments in home and community-based services for older adults and people with disabilities.

All of these efforts are designed to inform the national policy debate and inspire innovative approaches to support working families, including working women. Ultimately, these changes will benefit the entire U.S. economy by investing in the millions of women who make up a significant share of the modern workforce while also caring for their loved ones.

Download the PDF file of THE COST OF DOING NOTHING: 2023 UPDATE below.

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