Here’s a letter to the editor of AEI Today – a daily e-mail feed of articles from the American Enterprise Institute:
Among the items that you feature today is Christopher Ruhm’s case for government-mandated paid parental leave (“Paid family leave: Developing a national policy”). To support his case, Mr. Ruhm writes that “There is widespread public support for paid parental leave.”
No there isn’t.
If there truly were widespread support for paid parental leave given its costs, employers would have every incentive to supply such leave to more workers. The fact that such leave is not supplied to more workers is the best available evidence that support for such leave in fact is not as widespread as Mr. Ruhm assumes it to be. The poll of the market where each respondent acts with something material at stake – in contrast to opinion polls (upon which Mr. Ruhm relies) where each respondent talks with nothing material at stake – reveals that most of the workers who Mr. Ruhm wishes to force to take a larger share of their compensation in the form of paid leave in fact prefer compensation packages featuring no paid leave but with higher take-home pay to packages featuring paid leave but with lower take-home pay.
It is surprising that many of the scholars at AEI overlook this reality.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
Note that it will not do to say that what the opinion polls really show is that there is widespread support for paid parental leave on the assumption that workers’ take-home pay (or other aspects of work) do not worsen as a result. Of course that’s what the polls show – which is precisely why such polls are unreliable in cases such as this. We need take no polls to discover that people generally prefer to get benefits at a cost to them of nothing. Such ‘information’ is hardly newsworthy. What must be learned is whether or not those who receive some benefit are willing to pay the cost of receiving that benefit. If they aren’t willing to pay that cost, then these people don’t really want that benefit.
I want, for example, a brand new Mercedes-Maybach S600, but because I’m unwilling to pay the hefty price for the benefit that owning such a car would give to me, the correct conclusion is that I do not really want such a car given its cost. And if I answer “yes” to an opinion-poll question “Would you like a brand new Mercedes-Maybach S600 if it costs you nothing?”, surely my positive answer would be both drearily dull and indicative of no action that should be taken in reality.
Unlike many economists I do not disparage opinion polls. But I nevertheless do not regard the results of such polls to be nearly as revealing and as reliable as are the results of the many daily, continuous, and nuanced polls taken by markets, where each person puts his money where his or her mouth is.