Understanding macroeconomics is helpful as you advance in your OHS career. Macroeconomics is the big picture evaluation of how an economy works based upon numerous influences at the local, regional, and global levels. Consider the following statement:
“The greater the effort by rich nations to create meaningful employment for women, the greater the likelihood that these actions will eventually topple that nation’s economy.”
The startling enigma about women and work is associated with a nation’s low fertility rate. Demographers, sociologists, and economists have long voiced concerns about low fertility rates. Only lately, however, have these groups used words such as “jaw dropping,” “stunning,” and “astounding” to describe the problem.
A fertility rate below 2.1, also known as replacement rate, means there are fewer births than deaths. If this rate is not raised by an increase in births, or addressed by other means such as immigration, fewer young people and more old people will be the result.
A nation of old people means, among other things, that there will be fewer workers, less taxes, and a necessity by the nation to shift from being a major exporter of goods to directing massive in-nation resources and services to care for its old people.
The top-ten richest countries in the world, in descending order, are: U.S., China, Japan, Germany, UK, India, France, Italy, Canada, and South Korea. Each of these countries have a fertility rate below 2.1. These countries now realize that a fix to the low fertility problem is difficult. Taking too long to sufficiently act risks the country tumbling as an economic power.
Urgency to act – brief examples
China is the U.S.’s closest economic competitor. Late in 2021, China instituted its “Three Child Policy.” China’s regional governments are scrambling to raise the country’s 1.3 fertility rate. China is quickly adapting to a “family friendly” and “work-life balance” country. Paid maternity and paternity leave (yes, fathers get leave too) has been lengthened and depending upon location of regional governance, pregnant workers have legislative access to flexible work schedules, free child-care is provided for working parents, subsidized housing is available for parents, and in some cases direct and indirect monetary payments are given to couples having more children.
Japan began free preschool education and childcare in 2019. More than one-half of Japan’s prefectures have government-run matchmaking services. In 2021, Japan Cabinet Office allocated about $19 million for local governments to implement a new artificial intelligence dating system – all in the hopes of increasing the nation’s fertility rate.
Germany Maternity Protection Act was passed in 2017. The law includes extended leave for workers who give birth to children with disabilities, broader protections are provided against dismissal for workers that suffer miscarriage after the twelfth week of pregnancy, and employers are obliged to assess the risk, including “irresponsible risk” to which pregnant or breast-feeding workers are exposed for every activity, and to consider potential accommodations.
India passed its Maternity Benefit (Amendment) Act in 2017. Under the law, paid maternity leave is raised from 12 to 26 weeks. After leave expires, work from home is available, as needed, with time negotiated between the worker and employer. Paid parental leave (all top-ten rich countries, except the U.S., now offer paid leave for fathers) is extended from six to eight weeks.
Germany, France, and Italy (and UK as a special case pending outcomes of Brexit), and all other EU countries have until August 2022 to establish national law that conforms to EU 2019 Work-Life Balance Directive. The directive’s objectives, including supporting directives, such as the Pregnant Workers Directive, seek to achieve an increase in birth rates through better work-life balance for parents and carers. Among other things, the directive allows for reduced working hours, flexible working hours, and flexibility on the place of work. Per the European Commission, the directive is not only a question of fairness, but it is also an “economic imperative.”
Canada’s fertility rate is 1.5. Canada is best positioned among all rich countries to increase its younger population through immigration.
South Korea amended major laws in 2019 and 2021 to provide greater support to pregnant and child-rearing workers. Paternity leave was doubled. Workers with a child under eight years of age may request their employer to reduce working hours between 15 and 35 hours per week, except in special cases.
The U.S.’s fertility rate is about 1.6 and has been falling for a couple decades. By 2030, all U.S. baby boomers will be older than 65 and by 2034 older adults will outnumber children for the first time in U.S. history, per the U.S. Census Bureau.
The U.S. does not provide paid maternity (nor paternity) leave at the federal level. Pregnant worker risk assessments, as provided by more than one-half of the top-ten richest nations, are absent at the federal level. It has taken over a decade for the proposed federal Pregnant Workers Fairness Act to garner big-business support. The U.S. does not provide free childcare for working parents. Federal legislation for employer requirements for caregiver needs including reduced work hours, flexible work schedules, or flexibility on place of work is absent. Politicians are not emboldened to seek substantial increases in immigration for low skill workers.
If California were a sovereign nation, it would rank as the world's fifth largest economy (wiki). As such, it is included in this discussion of how rich economies may increase fertility rates. California’s fertility rate is 1.5. In 2021, California lost population for the first time in state history – Covid does not explain longer-term decline. Average age at first marriage is over 30 years. Geriatric pregnancy begins at age 35 when health risks increase for mother and child e.g., Down syndrome.
Major changes to the California Family Rights Act (CFRA) occurred in January 2021. Prior to 2021, CFRA generally mirrored the federal FLMA. CFRA now applies to private employers with 5 employees, where prior it was 50 or more employees. Mileage requirement for CFRA is eliminated. Circumstances for CFRA leave expanded. Employees taking CFRA leave may be eligible for California Paid Family Leave (PFL) program or State Disability Insurance (SDI). Normal conditions of pregnancy, not rising to a disability, however, are not subject to PFL or SDI payments.
Competitiveness among rich countries to increase birth rates expands the concept of macroeconomics. Your understanding of this topic will help define the local impact on OHS.