Netflix's "game-changing" parental leave: What does their policy for new parents mean for the rest of us?

Did your employer's stock prices double this year?

By Scott Timberg

Published August 5, 2015 4:03PM (EDT)

  (<a href=''>Halfpoint</a> via <a href=''>Shutterstock</a>)
(Halfpoint via Shutterstock)

At first glance, this strikes many of us as one of the best ideas we’ve seen this year. Those of us who are parents, especially, like the sound of Netflix’s announcement unlimited paid parental leave during their child's first year, even more.

Here’s what Netflix’s chief talent officer, Tawni Cranz, said in a statement:

We want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances. Parents can return part-time, full-time, or return and then go back out as needed. We’ll just keep paying them normally, eliminating the headache of switching to state or disability pay.

The context here, of course, is that the United States trails most of the world in allowing parents time off. Every few years, our politicians start talking about “family values,” but the rest of the world’s democracies make us look like heartless workaholics when it comes to vacation and family leave policy. And while it’s technically illegal to fire a woman for being pregnant, it happens all the time.

A recent Bloomberg story begins with a chilling anecdote about a United Tool & Machine office manager let go when she told her boss she was pregnant, and points out:

Unless you work for a company that voluntarily offers it, or in one of three states, paid maternity leave doesn’t exist in the U.S. A law called the Family and Medical Leave Act (FMLA) grants up to 12 weeks of unpaid leave every year, but it applies only to full-time workers at companies with 50 or more employees. About half of all working Americans are covered by FMLA. The other half—freelancers, contract workers, entrepreneurs, people who work at small businesses—are on their own. Paid leave is even rarer: Only 12 percent of American workers have access to it in the U.S., according to the Bureau of Labor Statistics.

So there’s no way to avoid seeing the Netflix policy – which extends a trend among tech companies including Google, Facebook, and Yahoo, which all have generous employee benefits – as a step forward. That fact that it includes paternity leave is good, too.

The Netflix announcement has drawn raves online. “For right now,” The Huffington Post’s Emily Peck puts it, “considering the U.S. has no paid leave policy at all, I'll just be frank: This seems pretty freaking great.” A Fortune headline describes “a game-changing parental leave policy.”

Again, it’s really nice for people at Netflix. But it’s hard to see this as having quite as wide-ranging an impact as the optimists are predicting. Let’s go back to Netflix’s statement, which was clearly framed for potential recruits of the company, which has been on a roll lately. Besides “Orange is the New Black,” for instance, its stock prices are up 143 percent for the year.

Cranz again:

Netflix’s continued success hinges on us competing for and keeping the most talented individuals in their field. Experience shows people perform better at work when they’re not worrying about home. This new policy, combined with our unlimited time off, allows employees to be supported during the changes in their lives and return to work more focused and dedicated.

This is all pretty much true, as far as it goes. Happy, balanced employees make companies run more smoothly.

Similarly, it was, largely, an attempt to compete for workers during and after World War II that led employers to offer medical coverage. That worked great for a while, but it took place during the country’s postwar boom. We have no similar bout of affluence now – except in Silicon Valley and a handful of other places.

Some economic shifts – minimum wage rules, for instance – put broad pressure on the marketplace and leads to shifts at various levels: As wages at the bottom go up, they often take the next few tiers up with them.

But folks in Silicon Valley – and the tech companies around Seattle and elsewhere – have been paid well and have enjoyed all kinds of workplace perks for years now. The standards around vacation and parental leave are likely to put more pressure on other tech corporations – competing for a fixed number of employees – to offer the same kind of thing.

But will it trickle down to the rest of the economy, including those of us who work for companies that didn’t double their stock prices over the last few months? (Does your employer offer meditation rooms, free gourmet meals, and vintage arcade games?)

That’s an episode we’re still waiting to see.

Scott Timberg

Scott Timberg is a former staff writer for Salon, focusing on culture. A longtime arts reporter in Los Angeles who has contributed to the New York Times, he runs the blog Culture Crash. He's the author of the book, "Culture Crash: The Killing of the Creative Class."

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