By Addie Mae Villas | Austin, Texas
This past Friday, the city of Austin passed an ordinance, 9-2, in favor of mandatory sick pay. The ordinance, that will take effect October 1st, is not only a slap in the free market’s face but will greatly harm the small business that makes up the expansive Austin economy. The hypocrisy of the ordinance is the fact that it is supposed to help the people of Austin, but in the end, it will only eliminate jobs and make it harder for businesses to emerge in Austin.
The ordinance, a mess in itself, failed to consider that the people who will be hurt the most are the people who fund their jobs in office. Greg Casar, the councilman who proposed the ordinance, stated that “so much of this is about widening inequality and our fight against it”, but how exactly is this going to be helping to end inequality? If anything, it will force companies to reconsider their workforce as each person is entitled to 48 hours for companies with less than 15 employees, and 64 for all other employers. A business has no choice in determining if an employee deserves the time off with this ordinance. This eliminates any type of competitiveness to work for privileges. But, this creates a dangerous environment of entitlement in a world already full of people who think that everything is a right.
One can simply look to other cities that have implemented this type of ordinance to see the failures. When Connecticut implemented a similar law requiring paid sick leave, businesses began to cut back other benefits, reduce wages, and hours. This was followed by the fact that businesses were hiring fewer people, giving out fewer raises, increasing product prices, and requiring their employees to pay more for health care. Many states that require mandatory sick leave will have major benefits with little cutbacks, but it is hard to avoid the fact that a business can’t constantly spend. When it came to paid sick leave before the laws were put in place, most businesses already had sick pay on top of the benefits that are often offered. In San Francisco, 65.1% of employers already had paid sick leave. The free market will take care of itself without the government forcing mandates down their throats.
Austin has always been a leader for small businesses in large metro areas. So many times has Austin been called the top place to start a business, but with a mandate where the government is asserting their power over the entrepreneurs is hurting this title. Austin is also up for consideration for Amazon’s HQ, but would Amazon really consider a city that mandates the paid time off? These types of mandates may seem that they are helping the greater good, but in the end, the free market will always come out on top.
It boils down to the Milton Friedman quote that “One of the great mistakes is to judge policies and programs by their intentions rather than their results.” What is happening with the utopian laws being made is they only look at the benefits rather than weighing the costs. The government must stay out of the way of small businesses. Let the companies run themselves as they see fit, and allow for more innovation and entrepreneurship to happen by limiting government.