As legislation moves forward to give 12 weeks of paid parental leave to civilian federal workers, corporate America is feeling pressure to follow suit — or at least offer sweeter policies.
Why it matters: The U.S. is the only industrialized country that doesn't mandate paid leave for new parents. While there are federal rules about unpaid leave, most companies set their own rules, with an eye toward their bottom lines.
Driving the news: After the House approved the bill on Wednesday, the Business Roundtable, a group of CEOs whose companies employ more than 15 million, wrote letters urging Congress and President Trump to make paid family leave — a broader category than parental leave — available to "as many working Americans as possible."
- IBM CEO Ginni Rometty signed the letter, saying that "while most Business Roundtable companies provide very generous paid leave, there is a need for economy-wide action."
- Rometty notes federal legislation would "help businesses challenged by the growing patchwork of competing and inconsistent state plans."
By the numbers: Just 16% of private employees in 2018 had access to paid family leave, which includes maternity and paternity leave, according to the latest data from the Bureau of Labor Statistics. That's up from 10% in 2010.
- This year, the Business Roundtable said its member companies' sole purpose was no longer profits, and that part of their mission shift is to prioritize investing in their employees.
Between the lines: One reason corporations might push for federal legislation rather than act on their own "could be that it saves them from having to bear the costs of the policy," Aparna Mathur, director of the AEI-Brookings Project on Paid Family and Medical Leave, tells Axios.
- "The government programs under consideration in this White House do not raise taxes on businesses, but instead allow employees to pull forward from either the child tax credit that they are eligible for or social security — so there are no additional costs on business."
The big picture: The tight labor market — with the unemployment rate at a 50-year low — puts workers in a bargaining position.
- Private employers "now have to compete with the [government] and up their own games to attract and retain the best talent," Meredith Bodgas, editor-in-chief of Working Mother magazine, tells Axios.
- "It's the larger employers who tend to start offering new benefits in order to attract and retain employees," Mathur says.
- Small businesses face steeper challenges, she said. "It's a tight labor market for them, but the costs of providing the benefit are much higher."
Where it stands: Only a handful of companies — primarily corporate giants — offer anything nearly as rich as what the government is poised to pass.