Why Conservatives' Plans for Pregnancy 401(k)s Fall Short

The Independent Women's Forum is counting on a magical change in corporate and philanthropic behavior to pay for parental leave.The Independent Women’s Forum is counting on a magical change in corporate and philanthropic behavior to pay for parental leave. (Image: Jared Rodriguez / Truthout)

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Also see: The Not-So-Independent Women’s Forum Was Born in Defense of Clarence Thomas and the Far Right

Eighty-seven percent of workers lack paid family leave, including the vast majority of low-income workers. Fortunately, some conservatives have offered a bold new solution: pregnancy IRAs.

That’s right. In an apparent attempt to cement the United States’ status as the last industrialized nation on Earth without paid family leave, the Independent Women’s Forum proposed a system of Personal Care Accounts (PCAs) in which workers would save for their own paid leave based on the same 401(k) model that has left millions at risk of an insecure retirement.

The proposal would, of course, place the burden on individuals to save for their time off during the lowest-earning years of their lives. As Jeffrey Hayes from the Institute for Women’s Policy Research explains, the fact that women have kids early in their life means that there is very little time for parents’ savings to compound — limiting the main benefit of tax-free savings accounts as well as the savings of most people who aren’t already in the privileged position of being able to take time off.

And, there are other reasons why this proposal pales in comparison to existing plans to guarantee paid family leave.

“Personal Care Accounts” Would Leave Out Many Young Parents

The PCA is modeled after tax-exempt savings accounts such as Health Savings Accounts (HSAs) and 401(k)s. These savings vehicles are supposed to make it easier to accumulate wealth by allowing workers to defer paying taxes on contributions from themselves and their employer. Unfortunately, over two-thirds of 401(k) tax benefits go to the top 20…

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