May 15, 2007

Paid Sick Days

NYT columnist Bob Herbert wants the government to force firms to give one week of paid sick leave to workers. The column explains the benefits workers would receive from having such paid sick leave but it never once discusses the costs.

If firms must give a worker paid sick leave then the worker becomes less valuable to the firm. Mandatory paid sick leave, therefore will either reduce salaries or cause firms to hire fewer employees.

Imagine, for example, that some restaurant is going to hire either a mechanical or human dishwasher. Forcing the restaurant to give paid sick leave to any human dishwasher it employs would incentivize the firm to buy the machine.