If the recently proposed mandate for paid sick leave and family care leave had not been rescinded, what would the effects have been on our economy, our levels of employment and unemployment, and the economic future of Ohio? What is to say that the support for the proposal will not gain strength and the issue find itself in front of the public once again?

The Likely Impact of Mandated Paid Sick and Family-Care Leave on the Economy and Economic Development Prospects of the State of Ohio analyzes the potential impact of such legislation on the economy of the state of Ohio, the economic development prospects of the state, and the management of production processes that depend on highly integrated teams. The report also reviews the literature on the effect of mandated paid sick and family care leave on the industrial relations system—workplace performance and worker retention.

The Report was prepared Ohioans to Protect Jobs by The Urban Center at Maxine Goodman Levin College of Urban Affairs Cleveland State University. The report concludes that there would have been a net cost associated with the paid sick leave and family-care initiative proposed in Ohio of between $102.9 million dollars per year and $420.0 million dollars per year.

This estimated range is the minimum impact on the state. It does not include the dynamic, economic development impacts. The cost benefit analysis in the report looks at the short run impacts and does not include longer-term negative effects that result from Ohio losing investment to border states as companies seek to avoid the mandates.

This research was conducted in anticipation that the initiative petition would go to the ballot. With its withdrawal, the research team at Cleveland State University’s Urban Center took additional time to review its findings in anticipation that advocates for mandated paid sick and family care leave will introduce similar legislation in other states and before the U.S. Congress.

The Likely Impact of Mandated Paid Sick and Family-Care Leave on the Economy and Economic Development Prospects of the State of Ohio, concludes that the proposal to mandate paid sick and family-care leave days would have been bad for Ohio’s economy and bad for some of Ohio’s workers. The entire report is located at http://urban.csuohio.edu/urban_center/sick_leave/.

For additional information about the report or for interviews with the report research team, please call Kevin E. O'Brien, Director, Center for Public Management, 216.687.2188

Report Highlights

The Urban Center of the Maxine Goodman Levin College of Urban Affairs of Cleveland State University was engaged by Ohioans to Protect Jobs, a nonprofit organization organized under Section 501(c)(4) of the Internal Revenue Code, to analyze a proposal that all employers in Ohio employing 25 or more people provide seven paid sick and family-leave days for all employees working 30 hours or more. The proposal also required that part-time employees be provided similar benefits on a pro rata basis. The conclusions reached by the Urban Center research team are that, if passed, the proposed legislation would in all likelihood have the following outcomes:

• It would have been harder to attract and retain business investment in the state of Ohio;
• It would have promoted the perception that Ohio does not have a business-friendly climate;
• Economic development attraction activities would have also been burdened by the fact that business operating costs would be increased when compared to nearby states;
• It would have moved jobs from permanent employers to temporary help agencies;
• It would have increased employment in the near-term but reduced both employment and real earnings over the longer term;
• It would have made Ohio the only state in the nation where time off in some cases qualifying under the Family Medical Leave Act (FMLA) standards would require compensation;
• It would have increased business operating risks, especially for manufacturers and others with interdependent team-based operations;
• It would have been particularly burdensome, disruptive, and harmful to the state’s small- and mid-sized manufacturing establishments;
• It was poorly drafted and would have stimulated expensive and disruptive legal activity;
• It would have increased business risks because the poor drafting was coupled with strong incentives to sue;
• It would have impacted existing negotiated labor agreements;
• It would have caused Ohio’s employers to move from progressive human resource management techniques to more adversarial techniques;
• It would have produced some benefits in the form of the reduced spread of contagious diseases in the workplace, reduced the incidence of sick workers showing up to work, and possibly reduced turnover. However, our research indicates that advocates overestimate the effect on employee turnover.
• It would have benefited people who are currently employed and do not have sick days, but would have been a burden for those attempting to enter the labor market, especially low-skilled workers;
• It would have increased overall worker absences and facilitated abuse of sick leave benefits.

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