Investor Alert

Aug. 13, 2022, 8:19 a.m. EDT

Workers lost $28 billion in wages in pandemic’s first two years thanks to lack of paid leave, analysis shows

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By Emma Ockerman

The United States’ lack of a paid leave program cost workers an estimated $28 billion in lost wages in the first two years of the pandemic, disproportionately affecting women and people of color, according to a new report. 

Between March 2020 and February 2022, American workers saw a 50% increase in the number of absences related to illness, child-care needs, or other family obligations when compared to the two-year period prior, according to an analysis from the center-left Urban Institute, supported by the Robert Wood Johnson Foundation.

That’s likely no surprise to anyone subjected to COVID-19 infections or related child-care dilemmas. But fewer than half of those absences were paid, even though the majority involved a worker being sick during the COVID-19 pandemic, according to the report. Workers in households making less than $25,000 a year, or below the poverty line for a family of four, were also more than three times as likely to be absent from their jobs without pay when compared to those in households making $100,000 or more, the report said.

If absent for a week, workers missed out on an average of $815 in wages, according to the report — which would amount to about 40% of the country’s median asking rent , or a little more than the average monthly payment on a new car. 

“Universal paid sick and paid family and medical leave policies that reach the lowest wage workers, workers of color, the self-employed, and those with part-time or non-standard hours could help absorb the economic shock of missed work and wages for individual households, with benefits for public health and the broader economy,” the report said.

During the pandemic, women were 42% more likely to be absent from work without pay when compared to men, the analysis found. Sixty-six percent of Hispanic/Latino workers and 57% of Black workers didn’t get paid for their absences due to illness, a child-care need or other obligation.

As recently as June, multiple women testified before the House Ways and Means Committee to say they desperately needed paid leave. 

If they lived in any other wealthy country, they might have it, experts say. The U.S. is one of the few high-income countries in the Organization for Economic Cooperation and Development that lacks a national policy concerning paid, job-protected leave for medical reasons or to care for a sick family member, according to the Bipartisan Policy Center, a D.C.-based think tank.

While many workers get paid leave through their employers, those benefits often do not extend to poor, part-time, or independent workers. 

The U.S. temporarily mandated paid sick, family and medical leave among certain employers early on in the pandemic . However, “in 2022, most federal policies to reduce economic hardship during the pandemic have expired, but COVID-19 continues to cause elevated absences and economic hardship,” the report said. 

Though the House-passed version of President Biden’s Build Back Better Act included a national paid leave program, the bill died in the Senate late last year. The new Inflation Reduction Act, a scaled-back version of Biden’s economic agenda , does not include a federal paid leave program but is likely to be signed into law if the House passes it Friday.

Read more: More states are preventing local governments from requiring paid sick leave — but low-wage workers end up paying the price

Learn how to shake up your financial routine at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. Join Carrie Schwab, president of the Charles Schwab Foundation.

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