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asked ago in General Economics Questions by (140 points)
We use premiums to offer services such as health care and retirement plans. Millions of workers see monthly deductions from their paychecks to gain access to these types of benefits.
Is it reasonable to consider treating paid sick leave as a benefit with a premium cost similar to a retirement benefit with a monthly deduction or a premium paid to gain access to healthcare? Why or why not?
What prior policies help shape your thinking about this question and how you would answer it? When an employer pays for a worker’s sick leave is such a payment economically rational? Why or why not? What is the most economically efficient system which can allocate resources to pay for employee sick leave? How can one be trained to think about this question as an economist? https://medium.com/@joshuadavis31/is-it-reasonable-to-charge-a-premium-to-offer-paid-sick-leave-10424320aed9
Reasonable to charge
Unreasonable to charge
Depends upon market conditions
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1 Answer

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answered ago by (2.7k points)
In my experience, taking into account machining, which is the rule for a developed company (I know that a lot of firms rather prefer to allocate its factories in low labor cost countries, what is economically less productive), labor costs aren't so high. Thinking economically, the most productive procedure of an economy is having high fixed costs (machinery, factories), and low variable costs. This means that product per person is high, what allows us to enjoy a higher living standard per hour worked. Taking into account all of this, I think that people should have the opportunity for enjoy sick leave days (what isn't their fault), without paying any premium. And maybe, if the sick leave takes too long, the state should pay a part of it. I know that the welfare state isn't very popular in these times, but I think that there is enough room for applying it in these cases. At the end, I want to say that maternity leave is completely necessary in a developed economy, because if we don't apply it, our population will age and decrease, what is economically a shot on your feet.
commented ago by (2.7k points)
Taking into account a labor intensive services economy, I think that it's always better reduce profits than consumption. Anyway, the world's economy has decreased prices enormously (i.e. data storage and computer processing) , so I still think that we have the opportunity for having free sick leave pay. Besides, there is a increasing controversy in services producer countries about inequality, which without welfare improvements can lead to a too socialist political behavior. Because all of this I think that it's politically and economically efficient (it would increase productivity and loyalty to the firm, consumption and better performance of the economy as a whole and economic growth and performance in the long term in all senses in the case of maternity leave).