Rural employers rip DFL-backed paid time off plan

Proponents of the proposed paid family and medical leave time off payroll tax say low-income residents stand to gain the most from the DFL-backed legislation. Never mind that the $1 billion or higher new payroll tax would hit lowest earners the hardest, as American Experiment economist John Phelan shows here.

A recent look at the issue in the Mankato Free Press featured an MSU-Mankato social work professor trying out a new twist of that sales pitch aimed at rural Minnesotans.

[Prof. David] Beimers, who cited 2019 research from the Humphrey School of Public Affairs, said workers in rural areas often face more hardships when they need to take leave from work and are less likely to have access to some form of paid leave through their employers.

Additionally, he said the percentage of mothers with young children in the paid workforce is high in rural areas.

Half of Minnesota’s entirely rural counties have 90% or more of mothers with children under age 6 in the paid labor force, the report said.

It’s difficult enough to recruit and retain employees in the current job market. It’s especially tough in the Mankato area, which happens to have one of the lowest unemployment rates not only in Minnesota, but the entire country.

No wonder local employers overwhelmingly oppose the government-mandated program that would force them to find temporary replacements for workers who can take 12 paid weeks off for family and/or medical leave after just 90 days on the job.

It’s not popular with area businesses, according to Andy Wilke, Greater Mankato Growth business development and public affairs director. He said aggregated results from their annual policy survey, which asked its more than 900 members about their support for the idea over the years, showed about 80% of respondents are consistently against it.

Wilke said their members, consisting of many business types from nonprofits and private businesses to larger employers, have argued that many industries have varying needs and believe it’s important to make sure benefits can be customized to fit individual workplaces and industries.

“One of the hidden costs that folks are very concerned about is when folks do take time off is how they are going to fill that position with somebody during what is a historically tight labor market,” Wilke said.

Every employer in the state would be required to implement the government program, even though many, if not most, companies already offer time off voluntarily in order to be competitive and retain employees. But the DFL-controlled legislature appears more concerned with growing state government than finding private market solutions.

He said the majority of their members prefer a program that would create incentives for businesses to establish programs on their own so they can tailor benefits unique to their needs, adding that those incentives could come to fruition in the form of tax credits.

“Where employers can go onto a private marketplace, find an insurance product that fits the needs of their workplace and they can afford as an employer and then the state comes in on the backside and provides the tax credit to that employer,” Wilke said.

“I think employers understand the importance of taking care of their employees the best as they possibly can. This proposal will impact their ability to provide a comprehensive set of benefits for their employees.”

Mankato provides a window into the concern employers statewide continue to articulate over the detrimental impact of the proposed family and medical leave legislation for both businesses and workers. It would take only one vote in the Senate to stop it, but Mankato area employers have their work cut out for them.

Sen. Nick Frentz, DFL-North Mankato, said he opposed the original language of the bill but is now more open-minded to a yes vote after recent amendments.

“Obviously if it has the support of employees and the business community both, that would be an easy yes vote for most legislators,” he said.