Proposed increase in paid family leave could help many Richmond households
on September 28, 2022
Ash Abbott, a 31-year-old single parent and math teacher at Kennedy High School in Richmond, was able to afford taking nine months of parental leave for the birth of their twins only by taking out private and student loans and buying necessities on credit. Now Abbott is in serious debt.
“All of my credit cards are maxed out, which I’ve never experienced in my life,” says Abbott. “I’m living paycheck to paycheck, and I have more debt than I’ve ever experienced. As far as credit-card loans, it’s just horrific. And as a math teacher, it’s like, ‘Oh, no, these are bad.’”
In California, lower income parents and caretakers like Abbott often face a difficult choice when considering whether to use the state’s paid leave program: They can either cut their leave short or take the full eight weeks at partial pay and face the financial repercussions.
New legislation on Gov. Gavin Newsom’s desk seeks to make leave more accessible by increasing the benefit for lower wage earners. Newsom has until Friday to sign SB 951, which would expand the California State Disability Insurance and Paid Family Leave program by increasing the percentage of income paid out during leave to 90% for many workers. It would apply to those who make 70% or less of the state average pay, which is $57,000 a year, according to Katie Duberg, political organizing director at the California Work & Family Coalition, which advocates on behalf of families, parents, and caretakers.
The policy would have a big impact on Richmond, where more than 1 in 5 people earns $39,900 or less, according to U.S. Census data.
California’s paid leave program provides workers with up to eight weeks of paid time to either take care of themselves or a family member, or to bond with a newborn or newly adopted child. Most workers in California automatically pay into the program.
Workers are paid 60% to 70% of their income during their leave, with the highest percentage reserved for very low-wage workers and most workers collecting only about 60%.
The payout is too low and keeps low-wage earners from taking advantage of the program, according to advocates of the legislation, who say increasing the payout would be an important step toward making paid leave accessible for low-income families, parents, and caretakers.
But raising it would mean higher wage-earners will be paying more into the state disability insurance fund that supports the program. For state Sen. Melissa Melendez, a Republican representing Riverside County, that’s a deal-breaker.
“I just could not support an effort that would take more money out of the pockets of Californians already struggling with high rates of inflation and the high cost of living in California,” she says.
Sen. Brian Jones, a Republican representing San Diego County who also voted against the legislation, raised concerns about its potential to lead to “more small business closures, more employee layoffs, more lost jobs, and more people unemployed.” Jones noted that thousands of California small business owners and employees shared his concerns.
Last year, Newsom vetoed a similar bill that would have expanded paid leave, citing concerns that it “would create significant new costs … and would result in higher disability contributions paid by employees.” Political observers say that was largely because the legislation did not include a plan for how to pay for the expansion.
The current bill, however, does include a payment plan, says Katie Wutchiett, a staff attorney at Legal Aid at Work, a nonprofit providing legal assistance to low-income people. Payroll contributions toward the fund now cap out at $145,000, with no additional contributions on money earned beyond amount. But under the new proposal, that cap would go away.
According to the California Budget and Policy Center, the current formula for funding the program disadvantages women, Black and Latinx workers the most because they are disproportionately represented in the population of low-paid workers. Consequently, access to California’s program is “very much a racial and economic justice issue,” says Jenya Cassidy, director at the California Work & Family Coalition.
Wutchiett noted that many families already have a difficult time making ends meet on their full income, so taking a 40% pay cut isn’t possible.
“If people can get 90% of their income, that will take us a huge step towards making sure that if people are sick, they feel like they can take time off to recover, or if they have family members who need support, that they can be there without having to balance out what impact it will have on their ability to pay rent or buy food or take care of basic expenses,” she says.
For Abbott, who was getting 70% of their pay, the increase to 90% would have lessened the onerous financial burden.
“My credit card debt, there’s no way for me to pay it off at the rate that it’s growing. Having that 90% would have totally shifted that to where I would have had thousands of dollars of debt as opposed to tens of thousands of dollars,” Abbott says.
“It’s just going to be crippling for a little while.”
If SB 951 is not passed, California’s current wage replacement rate for paid leave could go down to 55%, because the 2018 legislation that had raised it to as much as 70% is set to expire at the end of the year.
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