Hello. This is Labor of Economics. Q3) Suppose that State X passes a new piece of...

Hello. This is Labor of Economics. Q3) Suppose that State X passes a new piece of legislation that requires all employers to offer paid family leave to workers who have children or parents who need their care for an extended period. Under this new law, businesses are required to hold a job for a worker who goes on paid leave for up to six weeks, When on leave, workers receive 55% of their normal (non-overtime) pay. What are the likely labor market responses from the demand (employer) side of the market? Include in your analysis a consideration of factors that would affect the size of these responses

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Expert Solution

The demand side (employer) of the labor market will not support this legislation.

This is because it is a lose-lose situation for the employer. The employer will not only have to pay the worker who is going on leave, but also keep his seat reserved for upto 6 weeks.

This means the employer will lose on its work and also be paying salary to the worker not on work.

Thus, from both ends, the employer will be at loss and would not support the legislation.

Rahul Sunny answered 1 year ago

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