You are here
While we as an industry have been focused on some important legislative battles over the last few years, with interchange fees and rest stop commercialization topping the list, a new threat has been quietly percolating at the state and local level and is beginning to get the attention of Main Street retailers. Mandated paid sick leave, long a leading item on Big Labor's wish list, has begun to rear its head in several places across the country. This policy issue, which could further add to the growing labor cost burden that government mandates such as healthcare reform are placing on the backs of employers, is of particular concern since it is likely to be a political organizing tool for left-of-center candidates next November.
Over the past couple of years, some form of mandated paid sick leave (PSL) has passed in several cities across the country including Washington, D.C., San Francisco, Milwaukee and Philadelphia, and there are two such measures currently pending -- one before the Seattle City Council and a November ballot initiative in Denver. Additionally, we recently saw the first statewide PSL bill become law in Connecticut. Despite the fact that PSL mandates have passed in somewhat random geographic areas, this effort is anything but random. Not only is the issue important to the labor community, it has also become a priority for other constituencies as well. For example, the somewhat mainstream National Partnership for Women and Families (NPWF) has put PSL high on its priority list. This is significant because the organization is very broad and takes on a variety of workplace issues important to women and families and as such, has many longstanding partnerships with corporations, non-profits and academia. While a national organization, NPWF has played an important supporting role to most of the local PSL fights over the past couple of years and their resources have been significantly leveraged in the battles in Philadelphia, Seattle and Connecticut.
Essentially, each of these local battles follows the same template. Let's take Seattle as an example -- a local "front" organization is created (in Seattle it is the Washington Family Leave Coalition), which then partners with a statewide progressive organization (the Economic Opportunity Institute) and is then back-stopped by a national organization (in this case the NPWF). Typically, the national organizations provide an infrastructure linking state or local-based organizations across the country and provide support including funding, research, communications and organizing expertise. It is basically the corporate equivalent of vertical integration. These efforts may be executed locally, but they are organized nationally. Besides NPWF, other national organizations advocating PSL and facilitating activities on the ground include 9to5, the Center for American Progress and Family Values at Work. And not coincidentally, all of this effort coincides nicely with the political and policy agenda of the Labor community. Whenever Big Labor and the progressive foundation world (with some corporate backing) join forces on an issue, you can bet you're in for a long-term wild ride, and that's what we have developing before us.
So who will bear most of the burden of these mandates? It won't be IBM or AT&T with their gold-plated benefit packages. It will be low-margin, low-profit per employee retail and service sector businesses. That's right -- those businesses that structurally are least able to absorb the costs. It is ironic that in an economy where unemployment hovers between 9 and 10 percent nationally and with the potential for another recession looming, policy makers continue to devise ways to punish the only sector of the economy that consistently continues to create jobs -- the service sector. How can we add to the number of employed Americans if we continue to assess burdens per employee. For example, the recently-passed healthcare bill creates a system where many employers will simply have to pay a $2,000 premium annually per employee for health insurance coverage. Most service sector employers are lucky to make between $2,500 and $3,000 in annual profit per employee. The impact of a $2,000 assessment for each employee needing coverage needs no further explanation. Game over. Now along comes paid sick leave and you guessed it, another per employee mandate.
Like PSL, this mentality isn't going away anytime soon and employers with low profit per employee need to continue working together to have lawmakers understand the discriminatory nature these mandates have on labor-intensive businesses. There is a business coalition of like-minded employers working on that right now. In the meantime, we need to prepare for more PSL efforts at the state and local level and work across industry sectors to ensure that this effort is contained. Otherwise, it may be the proverbial straw that breaks the camel's back for many Main Street businesses.
Joe Kefauver is managing partner of Parquet Public Affairs, a national issue management, communications, government relations and reputation assurance firm that specializes in service sector industries. Parquet's clients include Fortune 500 corporations, trade associations, regional businesses and non-profit organizations. For more information, go to www.ParquetPA.com.
Editor's note: The opinions expressed in this article are the author's, and do not necessarily reflect the views of Convenience Store News.