Mandatory paid leave ultimately hurts everyone by making it more difficult for companies to make on-time deliveries of needed products and services. That’s the message from West Michigan Policy Forum Chair John Kennedy, who’s also President and CEO of a major medical manufacturing company based in Kentwood. He knows from experience that Michigan’s proposed policy would do more harm than good, hurting customers and workers while holding back the growth that benefits everyone.
Kennedy recently made this point in a Detroit News interview. While his company, Autocam Medical, is based in Michigan, it also runs a factory in Massachusetts, which recently passed a similar mandatory paid leave program. The law has caused many problems, leaving the company in the lurch.
Kennedy points out that he already went to great lengths to help employees in need. The company offers employees an average annual salary of $65,000. That above-average pay gives employees greater flexibility to take leave without breaking the family budget. Kennedy said Autocam also offers ample paid time off to give employees additional flexibility, but a one-size-fits-all approach will force the company to cut back on the benefits they offer because they can’t afford both.
Since the Massachusetts mandate passed, nearly twice as many workers have taken over 300% more leave. The result is a lack of highly skilled workers at critical times, disrupting the company’s ability to deliver critical products to medical customers on time. As he told the News, “I can’t bring in somebody off the street to match their ability.”
“We differentiate ourselves from other companies by offering better paid time off that we can work with team members to plan around,” Kennedy says.
In addition, mandatory paid leave disrupts the company’s ability to succeed and compete, which also hurts workers when the company struggles. Michigan will especially struggle to compete against nearby states like Indiana, which doesn’t mandate paid leave. The hit is hardest for small businesses, which have little to no ability to adapt and backfill staffing positions on short notice.
Will Michigan’s proposed mandate have similar effects? Kennedy says the answer is yes.
“Small businesses are going to suffer. Manufacturers like mine are going to suffer. And worst of all, workers will suffer. Under this one-size-fits-all policy, their employers will offer less flexibility, fewer raises and benefits, and fewer opportunities to grow. Every community in Michigan is going to feel the pain. Good intentions can’t hide the fact that this is a bad idea.”
Kennedy also points out Michigan’s proposed mandate could be even worse than Massachusetts’ policy. It raises taxes on job creators and workers alike, leaving less take-home pay. And it’s likely to experience the same fraud as other Michigan programs, like unemployment insurance.
Kennedy’s message to Michigan lawmakers is simple: “Don’t go down this dangerous road.” Please contact your state representatives and senators and tell them the same thing: Michigan workers need a stronger economy and more opportunity, not more harmful mandates that hurt us all.
