The Drum Major Institute (DMI) has released a new report titled “Paid Sick Leave Does Not Harm Business Growth or Job Growth“.  It is an update to DMI’s March 2010 report that found no causal link between paid sick days and boilerplate opposition claims that they harm employment.

The new report examines employment statistics in the San Francisco area to determine what effect, if any, San Francisco’s paid sick days requirement have had on employment and private sector business growth. Its aim is to help policymakers better understand the impact of the San Francisco law, and predict what the likely effect will be in New York City should a similar law pass there.

The report presents new statistics and evidence from the San Francisco area, analyzing growth in the overall number of business establishments and employment in general. The report’s key findings:

  • In the three years since San Francisco became the first city in the country to implement a paid sick leave law, job growth there has consistently been higher than in neighboring counties without such a law.
    • Total employment in San Francisco increased by 3.5 percent between the first two quarters of 2006, immediately before the passage of paid sick leave, and the first two quarters of 2010, the latest period for which data is available. In contrast, total employment in the five neighboring counties cumulatively fell 3.4 percent during the same time period.
  • The number of businesses has grown more rapidly in San Francisco than in neighboring counties since the implementation of paid sick leave.
    • Between 2006 and 2008, the number of business establishments in San Francisco grew by 1.64 percent while the number of establishments in the neighboring counties fell by 0.61 percent. Business growth was greater in San Francisco than in neighboring counties for both small and large businesses and in the industries widely considered to be most impacted by paid sick leave: retail and food service.

DMI concludes, “[W]e find no evidence that businesses in San Francisco have been negatively impacted by the enactment of paid sick leave. Employment growth in San Francisco was consistently greater in the three years since the enactment of paid sick leave than in neighboring counties. Business growth was also more favorable in San Francisco, even for small business establishments and businesses in retail and food service and accommodations.”

Read the full report »

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