Creating new jobs is a top priority for addressing the continuing labor market crisis. It’s not widely recognized, however, that job retention is as important as job creation in improving our economy. That’s why policymakers should pay attention to a tool some states and cities are using to improve employee retention: paid sick days.

Surprising as it may seem, many American workers have no paid sick days—especially among the working poor. A shockingly high 40 percent of private sector workers and 80 percent of low-wage workers have no paid sick days at all. Overall, more than 40 million Americans must choose between working sick or losing a day’s pay.

Getting sick is part of life. Yet, workers who lack sick days risk being fired just for taking a needed day off.

These job terminations aren’t because workers can’t or won’t do their jobs—they just need time off to recover from illness. And these job losses hurt the economy, too, because families need to earn and spend if we are ever going to see more robust economic growth.

In light of this threat, many workers engage in “presenteeism”: showing up at work even when ill. This is counterproductive and costly to business. Not only are these employees under-performing, but they can put other employees – as well as customers or clients – at risk if their illnesses are contagious.

Many of the low-wage workers who lack paid sick days work in health care, child care, or as personal or home health aides, coming into direct contact with children and the elderly. Others without paid sick days work in restaurants preparing or serving food. 

Workers who come to work sick not only put themselves and others in harm’s way, they impose costs on the businesses that employ them. In fact, the costs of presenteeism exceed the costs of absenteeism: studies estimate the annual cost of presenteeism at $180 billion, compared to $118 billion for absenteeism. 

The good news is that paid sick days policies are gaining support across the country. New York City, Philadelphia, Denver, and Seattle are all considering municipal sick days policies. So are states like Connecticut, Arizona, Illinois, North Carolina, and Maine. 

If they succeed, they’ll join the District of Columbia, Milwaukee, and San Francisco, as communities that took it on themselves to provide needed support to low-income families.

Yet passage of legislation to allow workers to earn paid sick days faces an uphill climb.  Everywhere that public health advocates, workers, and small businesses have fought for paid sick days - both to protect the health of employees, coworkers, and the public and as a means to improve employee retention - there has been opposition from powerful employers’ associations.

The good news is that evidence from trailblazing cities can help reassure employers and pave the way for the next steps on paid sick days. San Francisco passed its sick days ordinance in 2006. So far, the local business community has few complaints, as seen in a 2011 study. Employers reported few negative experiences with profitability (14 percent), customer service (2.6 percent), employee morale (1 percent), or predictability of absences (7 percent). Just one third reported any difficulty administering the ordinance and more than two-thirds supported it.

This might seem like a tough time to ask businesses to provide paid sick days, but – as the employers who already provide their workers with paid sick days know – a minimum floor of paid sick days is good for workers, good for businesses, and good for the economy. Now is the right time for policies that improve employee retention, minimize layoffs, and support improvements in the job market. 

Paid sick days prove that we don’t need to choose between good jobs and a good economy—they go together.

To print a PDF version of this document, click here. 

Eileen Appelbaum is a senior economist at the Center for Economic and Policy Research and the co-author of Leaves that Pay.