Lack of Paid Leave Cost U.S. Workers $28 Billion in Lost Pandemic Wages

Talk about a massive blow.

Many people are fortunate enough to work for an employer that offers some amount of paid leave. Some companies, for example, have generous policies for sick time, caregiving, and parental leave.

But unfortunately, there are still many workers across the U.S. who don't have access to paid leave through their jobs. And so when they need to take time away from work, whether to care for a sick child or recover from an injury or illness they experience themselves, they're forced to forgo a paycheck.

For those with savings to tap, a missing paycheck here and there may be an event that's easy enough to recover from. The problem, however, is that many Americans don't have savings. If they're forced to go without pay for even a brief period of time, they land in a situation where they're forced to rack up debt just to stay afloat or otherwise fall behind on bills.

Such was the case during the pandemic. Despite different relief programs, many workers' finances took a massive hit during the early stages of the crisis due to not being eligible for paid time off. And new data highlights just how widespread the problem was.

Billions of wages lost

Workers without access to paid leave lost an average of $815 in wages per week of missed work during the pandemic, according to a new report by the Urban Institute. All told, workers lost out on a whopping $28 billion more in wages between March 2020 to February 2022 compared to the previous two years.

Of course, it's easy to see why so many workers were forced to take time away from their jobs during that period. Not only was there a threatening virus circulating, but many schools had switched to remote learning in an effort to keep teachers and students safe. As such, many parents had to take time off of work in the absence of having access to childcare.

One thing that helped soften the blow of unpaid time off was that unemployment benefits got a nice enhancement in 2020. But many workers who had to take unpaid time off weren't eligible for unemployment because they weren't considered jobless, and as such, didn't benefit from that provision.

A bigger problem

The issue of unpaid time off clearly came to a head during the pandemic. But the reality is that it's been a problem for years, and not just in the context of health crises.

Many parents, for example, are not entitled to paid leave following the birth of a child. That puts parents in a position where they can't focus on healing and caring for their newborns because they have to worry about paying the bills.

Some lawmakers have been advocating for better paid time off policies. But while some states have paid leave programs in place, many do not.

Plus, it's often the case that workers who lack paid time off are also lower earners. That effectively deals them a double blow -- they can't easily build savings because they don't make a lot of money, but they need access to savings due to not getting a paycheck every time they're unable to show up to work.

The solution? Some type of universal paid time off program. But clearly, we're not there yet.