Benefits Aren't Always Beneficial?

This article states and speculates on the potential effect of the new policy Obama plans to implement on Monday. Obama plans on issuing an executive order “requiring federal contractors to provide up to seven days of paid sick leave a year”. The issue is the less than desireable leave policies that lawmakers, private employers and both local and state governments use. Obama’s solution is, of course, controversial. While some are insisting the policy is an all-around positive advance, others challenge that it will cause an unintended rise in prices. Beyond ensuring the seven paid sick leave days, Obama has also required a higher minimum wage for contractors, among other things. While this article is written with a neutral stance on the issue, it presents both sides of the argument and thus contradicting predictions regarding the effects.

Though I personally think it makes sense to only be paid for doing a job when you actually do the job, I can see how it might be helpful to receive the pay you would have earned if you were physically able to. People don’t tend to choose to be sick and unable to perform their jobs. Therefore, they don’t usually choose to not work and not get paid. Outside variables impact one’s ability to work and most of the time the variables are not in one’s control. Understanding that it is unfortunate to not be able to work because of something out of your control, it is also unfortunate that the employer is obligated to pay workers that are unable to work. Households get paid (and in my opinion should only get paid) whenever they provide the designated work for the firm that they are employed by, not when they can’t work.

It would be rather idealistic that one would assume complete honesty from the employee regarding when they are actually sick or when they merely don’t want to show up. Ultimately, it would be very easy to take advantage of the situation and guaranteed paid leave. Even if it would only amount to 7 days a year, when you add up those seven days and take into account the number of employees affected by this new rule it can result in a sizeable sum. Where does this money come from then? Unless the firm has a surplus of money (and even if they did would they really want to give it away?) this extra expense has to be made up somehow. The easiest way to compensate would be to raise prices, for everyone. Does it make more sense to give more money to a certain population only for it to be worth less for an entire population?

Money has to come from somewhere. Scarcity is the core of economics and is the core of this issue as well. How beneficial will paid leave be in the long run?

http://www.nytimes.com/2015/09/08/us/politics/obama-to-require-federal-contractors-to-provide-paid-sick-leave.html?ref=us&_r=0