Academic journal article American University Law Review

A Different Class of Care: The Benefits Crisis and Low-Wage Workers

Academic journal article American University Law Review

A Different Class of Care: The Benefits Crisis and Low-Wage Workers

Article excerpt


In June 2015, Virgin announced an expansion of its parental leave policy. Working parents at Virgin, regardless of their gender, would receive a year of paid parental leave in the first year following the birth or adoption of a child.1 In making the announcement, Virgin's founder, Richard Branson, stated,

As a father and now a grandfather to three wonderful grandchildren, I know how magical the first year of a child's life is but also how much hard work it takes. Being able to spend as much time as possible with your loved ones is absolutely vital, especially early on.2

In August 2015, Netflix also announced an expansion of its parental leave policy: new parents on its payroll would receive up to a year of paid leave.3 Netflix's policy allows parents to take leave, to return to work, and to go back on leave as necessary.4 In making the announcement, Netflix stated, "We want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances."5

Virgin and Netflix joined several other high profile companies that were already known for offering generous benefits,6 and their announcements were followed by news releases from other companies that were either trying to keep up or vying for the title of most family friendly.7 What is often missing in these announcements, and the ensuing press coverage, is that these benefits only go to a certain class of employees.8 For example, Netflix's policy initially covered only its "salaried streaming employees."9 It did not cover employees in Netflix's DVD distribution centers, who are generally lower-paid, hourly workers.10 This distinction reportedly left out 400-500 of the company's roughly 2300 workers,11 who would continue to receive about twelve weeks of paid maternity and paternity leave.12 Notably, Virgin's policy is even more limited, covering only Virgin Management, a small investment and brand licensing division that employs fewer than 140 of Virgin's 50,000 employees.13 Virgin's policy thus covers some high-wage employees and omits all of its low-wage workers.

Virgin and Netflix are not unique. Across the labor market, highwage workers tend to receive greater employment benefits than lowwage workers.14 These benefits include not only parental leave but also sick leave, flexible work arrangements ("FWAs"), pensions, and employer-sponsored health-care plans, among other things.15 The benefits gap between high- and low-wage workers exists despite the fact that family-friendly16 policies have been shown to produce positive returns for employers in terms of employee recruitment, retention, and productivity.17 These policies have also helped high-wage working parents balance their familial and employment responsibilities. indeed, as the Virgin and Netflix announcements illustrate, a primary justification for, and impetus behind, the creation of family-friendly policies has been a desire to assist working parents in navigating these- at times conflicting-obligations.18 This balance has been particularly urgent for women,19 who continue to bear the bulk of responsibility for childbearing and childrearing in the United States.20

The value that employers and employees derive from familyfriendly policies raises an important question: why are benefits disproportionately bestowed upon high-wage workers over low-wage workers? This question merits attention given the recent growth in low-wage jobs. Following the Great Recession of 2007-2009, the lowwage workforce grew faster than other sectors of the U.S. labor market.21 According to the National Employment Law Project, although most employment losses in the recession occurred in midwage occupations, during the recovery, gains were concentrated in low-wage occupations, which increased 2.7 times as fast as high-wage occupations.22 Thus, while the U.S. unemployment rate is down with numbers approximating pre-recession figures,23 wages among U. …

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