President Trump is set to release his new budget plan today. It is expected to include $25 billion for a paid maternity leave program.
Already, there is speculation about whether such a proposal could possibly make it through a Republican Congress. There is a reason to suggest that a generous leave program will be a tough sell in business circles too. Opponents of paid leave have pointed to the costs to employers and the overall economy. President Trump’s adviser who has been placed in charge of “women’s issues,” Stephen Miller has in the past argued that paid maternity leave would cause companies to “lose too much money.”
Given the debates that a paid maternity leave proposal is likely to spur, it makes sense to question the logic underpinning the opposition, in particular, the argument that the fact that businesses do not already offer paid leave is itself proof that such a policy would undermine economic competitiveness.
As a political scientist, I study how the needs of some groups end up unmet by public policies and by businesses.
One of the things that I have found is that often groups’ needs go unmet as an oversight, and not due to deliberate economic calculations.
Yet, over time, policymakers, voters, and businesses or employers can come to assume that those needs go unmet precisely because they are too expensive, and not because the logic itself became perpetuating.
My work on the politics and history of mortgage lending examines how we sometimes take cultural practices and imbue an economic meaning onto them to justify their continuation. A 1973 Washington Post story explains the process of a married couple trying to buy a house outside of Washington, D.C. By the time a Veterans Affairs loan officer agreed to the loan, Carole (an editor for a science magazine) had provided him with a great deal of documentation.
Included was a letter from her employer attesting that she was “not just a secretary,” a letter from her doctor saying she was on birth control and unlikely to become pregnant, and signed affidavits from herself and her husband– one saying that she would have an immediate abortion if she were to become pregnant, and the other, that Martin would undergo a vasectomy if she ever quit using birth control.
Aside from the abortion affidavit, most of the other aspects of the their experience were quite common for the time, as the National Organization for Women and other women’s organizations found when they began to investigate the issue. When NOW conducted its own audit investigation of New York lenders in 1972, it found that of the 180 applications that its female volunteers had submitted across three lenders, only five women’s mortgages were approved. “What does a woman need a house for?” One loan officer reportedly asked a woman as he turned down her application.
Lenders justified these practices by their economics: young female applicants, they reasoned, were likely to become pregnant and stop working.
Therefore, it was bad business to assume that their current income would continue into the future, and even worse to make loans that took into account their current income.
Because it was legal and seemingly warranted by financial concerns, lenders were also quite open about the way they held women to separate standards. The American Security and Trust Company argued that banks would not discriminate against good credit risks, as “profit is still a more powerful motive than discrimination.”
But it also turned out there was not much evidence to support those assumptions.
The limited evidence available suggested that women posed either similar or perhaps lower, credit risks than men. A 1964 study found women were more likely than men to keep their credit accounts in good standing. An earlier 1941 study found that when it came to mortgages, women were better credit risks than men and that two-earner families were safer than single-earner families.
These studies suffered a methodological problem, since logically any woman making it into the pool of borrowers to study may have already had been selected on the basis of stricter criteria.
Two women from the Center for Women Policy studies also conducted a study that looked only at banks with a history of lending to women and men using the same standards. There, the evidence pointed to the “characteristics of the loan itself (i.e., the terms of the financing, particularly the loan to value ratio, the presence of junior financing and loan purpose), rather than the characteristics of the borrower.”
This was at its root a problem of assuming that a common business practice was common because it is economically sound. It may also be common simply because it was done in the past. Maybe it was unsound in the past. Or maybe it was overlooked because the people who were involved did not have a seat at the table.
By 1974 lenders realized that both public opinion and even the economics of sex discrimination were against them. That year, sex discrimination in lending was outlawed.
To be sure, mortgage and credit lending is not the same as maternity leave. But, as with debates about the costs of leave, policy debates over requiring businesses to do something they otherwise might be reluctant to do, have followed a similar logic. This logic of holding women’s credit applications to a separate standard was eventually trumped by research casting doubt on the premises that sex posed an inherent risk to a lender, and by the upswell of activism to bring public attention to these findings.
Today, as with that moment, we are coming to find much empirical support for the idea that paid parental leave – when done right – need not be a financial burden to businesses or taxpayers.
Throughout history and even today, Americans seem very willing to go along with policy makers and defer to the logic of profits and costs. But sometimes it is important to ask whether something is not happening because it’s too costly, or whether we believe it is too costly because it’s not happening.
Certainly, businesses and employers should be concerned about costs. But it is crucial to be aware of how existing practices may become rationalized even when there is no longer an economic basis to justify them.
Nearly 50 years have passed since the gender discriminatory lending practices of the 1970s were outlawed. As American women again– and still– are faced with gender discrimination in the form of economic punishment, it is important that we learn from the past to consider how to identify faulty economic reasoning and to challenge it.
Chloe Thurston is an assistant professor of political science and faculty associate at the Institute for Policy Research at Northwestern University. She is a Public Voices Fellow through The OpEd Project.