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Who's paying for family leave? In many cases, taxpayers

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Americans are a workaholic bunch, but sometimes life has other plans, which can arrive in the form of a sick parent, a serious illness or a new child.

One-quarter of working Americans took time off for medical, parental or family reasons in the last two years, according to a new study from the Pew Research Center. How workers pay for their leave varies considerably, with wealthier Americans more likely to receive paid leave benefits from their employers. Almost half of Americans who earn less than $30,000 annually said they turned to public assistance to make ends meet while on parental leave, while almost 6 out of 10 said they went into debt. 

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Regardless of income, Americans are cobbling together methods of affording paid family or medical leave, a necessity given the U.S. is the sole country among 41 of the biggest and most developed nations lacking paid parental leave.  Americans are allowed to take up to 12 weeks of unpaid leave for medical or family issues, however.  Even households earning more than $75,000 -- or those comfortably within the middle class -- are going into debt, cutting back on spending or cutting their family leaves short in order to afford time off. 

“Even those who receive pay are combining benefits,” said Julianna Horowitz, one of the Pew researchers. “What we come away with, in terms of policies, is that it’s very complicated. It’s not as simple as some people suspect.”

The issue of paid parental leave has taken center stage in the U.S. with President Donald Trump’s promise to address the issue with the help of daughter Ivanka Trump. Yet Pew found that the most common reasons for taking paid leave aren’t related to the birth or adoption of a child, but personal medical problems. 

About 15 percent of American workers surveyed by Pew took time off from work to deal with their own serious health issue, while another 9 percent said they wanted or needed time off but weren’t able to take it. That’s more than double the rate of workers who said they took time off for the birth or adoption of a child. 

“A lot of the time the debate over paid medical leave centers around parental leave, or whether a father should take leave, but personal medical leave and taking time off to care for sick family members are among the more common reasons to take leave,” Horowitz said. 

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Almost half of middle-aged Americans said they needed to take family leave to help a seriously ill parent. For senior citizens, the primarily reason for taking family leave was to help a seriously ill spouse. 

Those pressures may only intensify as the American population ages, Horowitz noted. The share of Americans over the age of 65 is expected to rise to almost 22 percent by 2040, up from about 15 percent currently, according to the Administration on Aging. On top of dealing with aging parents, workers are also coping with their own health issues. 

“Some of these demographic changes have propelled these changes into the national debate,” she said.

The financial impact of taking leave, for whatever reason, can be substantial. About 8 of 10 workers who took leave and received either no or a portion of their pay said they had to cut back on spending to make ends meet. Almost four out of 10 went into debt, while one-third delayed paying their bills. Across all incomes, almost 2 out of 10 leave-takers went on public assistance. 

Low-income workers feel the most pain when it comes to figuring out how to pay for leave. They’re not only the least likely to receive paid leave benefits from their employers, but they’re more likely to struggle as a result of taking unpaid time off. Almost half delayed paying their bills and went on public assistance. Almost one-third of Americans earning less than $30,000 annually said they needed or wanted to take leave, but weren’t able to do it.

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The issue highlights how low-wage corporations may be pushing costs onto taxpayers. Employers such as Walmart and McDonald’s cost taxpayers $153 billion per year because their workers turn to food stamps and other benefits to supplement their low wages, a 2015 study from the University of California at Berkeley found. 

Roughly one out of 10 workers earning more than $75,000 weren’t able to take leave, Pew found. The main reason for failing to take a needed leave? Most said they couldn’t afford the lost wages, while about half said they worried they’d lose their job. 

So should workers have access to paid leave? The vast majority of those surveyed by Pew support the idea, although views on funding paid leave vary by age, income and political affiliation. Americans are split on whether it should be a federal mandate, with about half thinking it should be up to employers whether to offer it. 

A majority of both Republicans and Democrats believe that employers should pay for medical and family leave, rather than the federal government.

“The public doesn’t seem to necessarily be supportive of the government providing it,” Horowitz said. Compared with European attitudes to the government’s role in paid leave, “Americans tend to take a more individualistic approach.”

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