The Greater Philadelphia Chamber of Commerce recently urged City Council members to oppose the proposed Mandatory Paid Sick Leave legislation in a letter sent on behalf of the GPCC Board of Directors:
Dear Council President Clarke:
As board members of the Greater Philadelphia Chamber of Commerce, we are writing to once again express our concern with expected Mandatory Paid Sick Leave legislation. While the intentions of the proposal may be admirable, if passed, this measure would add costs for small employers and hinder job growth within the city. Furthermore, by requiring this benefit only in Philadelphia, costs will be placed on Philadelphia employers not borne by similar businesses in neighboring jurisdictions.
Unfortunately, employment growth in Philadelphia has not kept up with the surrounding suburbs. The unemployment rate in the city is currently at 10.3 percent, surpassing the national average of 8.2 percent. We believe this should prompt policy makers to seek ways to spur job creation by eliminating barriers to growth, not add costly new mandates.
Small employers that don’t provide paid sick leave in most cases have made that choice because they can’t afford it. If forced to do so, many employers would have to eliminate other benefits, such as reducing hours for their employees, freezing wages, and eliminating bonuses. Worse yet, some employers may decide that they cannot expand their operations or even have to lay off employees to pay for the added expense of paid sick leave.
Last year, our Chamber commissioned a study to determine the economic costs of Bill 080474-AA on city businesses. As you might expect, the study found that the bill would create a financial and administrative burden on employers and cost the city both jobs and tax revenue. The additional burden on employers would cost Philadelphia businesses from $350 million up to $752 million to comply and implement the law. Furthermore, estimates of an increase in labor costs would result in a reduction in employment of about 4,000 lost jobs, which would be doubled if employers need to hire substitute workers. While the proposed legislation that is circulating is not identical to Bill 080474-AA, it is similar enough to assume that it will impose significant costs on city employers.
The vast majority of Chamber members provide paid sick leave. We oppose this measure because we believe it is inherently unfair to those small employers who cannot afford to do so. We believe that it is important for Philadelphia to remain competitive with its neighboring jurisdictions if it is to create jobs and grow opportunities for all of its citizens. Mandatory benefits in a vacuum hurt rather than help the city’s competitive position.
We urge you to oppose Mandatory Paid Sick Leave legislation and focus on ways to create private sector jobs by reducing mandates on Philadelphia companies.
