Outdated Laws Cause Employee Benefit Gap

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2006-04-19 11:21

Employee benefit system

Even more serious than a wage gap between men and women, is an employee benefit gap. According to a soon-to-be-released book, "Leaving Women Behind: Modern Families, Outdated Laws," federal policies encourage employers to provide life insurance, disability insurance and even day care for children; yet not everyone is treated the same.

"Our major economic institutions - including tax law, labor law, and employee benefits law, as well as Social Security, and retirement policies - were designed for families with a full- time worker and a stay-at-home spouse," said Kim Strassel, editorial writer for the Wall Street Journal and co-author of the book. "By comparison, they punish every other arrangement." For example:

  • Because of rigid tax laws and employee benefits laws, if both spouses work full-time they will likely receive duplicate, unnecessary sets of benefits. A wife, for example, will be unable to acquire higher wages in return for forgoing health and pension benefits she acquires through her husband's employer.

  • In a free labor market, one would expect to find a wide variety of work arrangements. Not every two-earner couple will want to work 40-hour weeks. Some might opt for 25 to 30 hour weeks so they can spend more time with each other or raising children. But rigid tax and employee benefits laws make such arrangements largely impossible for people who need health insurance, pensions and other benefits.

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