As we greet 2017, one clear message is that America has a jobs problem. It’s not that we don’t have enough jobs, but that we don’t have enough good jobs.
More than 40 percent of American jobs today pay less than $15 an hour, and most of these low-wage jobs lack important employment benefits such as paid leave, health insurance or retirement.
Think of your own household. Does $2,600 a month (if all goes well) seem like enough to pay for food, rent or mortgage, transportation, childcare and whatever other monthly expenses you might have? Does $30,000 a year seem like it is going to leave you with a little something you can put aside to save for a house, or your children’s education, or your retirement, to say nothing of covering an unexpected family emergency? Chances are the answer is no. In fact, nearly half of Americans cannot afford an unexpected $400 obligation.
And imagine if you are among the estimated one-third of American households who cannot rely on the same level of income month-to-month. You may need to take on expensive credit card debt — or other even costlier financing — in order to cover monthly bills. On lucky days you may suddenly have the opportunity — or requirement — to work extra hours, but you will need to rearrange all of your family care and other obligations on the fly, or risk losing your job entirely.
This is the labour market reality for millions of working Americans. They are tired, anxious, and have diminishing faith in the American dream.
We have moved from an industrial economy with a generally agreed set of labour norms and standards to a service economy with a prevailing political philosophy that labour standards are bad for business. In the process, millions of working people have gone from relative economic stability to constant economic vulnerability, if not panic. Our policy ideas are often divorced from this reality.
In the presidential campaign, we were inundated with boasts that manufacturing jobs would be brought back. But manufacturing jobs constitute less than 10 percent of total employment, and new technology has obviated the need for large numbers of manufacturing workers. Changes in trade policy or renegotiated trade deals will not bring those jobs back. And regardless, changed employment norms mean many of today’s manufacturing jobs are not the middle class jobs they once were. Nearly half of American front-line automotive manufacturing workers make less than $15 an hour, and many manufacturers employ workers through staffing agencies which leaves workers with lower wages, reduced benefits and little job security.
Private sector service industries now provide over 70% of the jobs in the U.S. economy. While some service sector jobs are professional roles in industries like insurance or information technology, many more are in sectors that currently rely on low-wage work such as retail, food service, health care, and hospitality. There is nothing on the horizon that could change this fundamental reality. And yet, our dominant political discourse pretends otherwise.
Today’s policy proposals to help workers in low-wage service jobs generally fall into two categories: offer education or training so people can get better jobs, or supplement earnings through programs like the Earned Income Tax Credit to help people survive on low-wage work. Both are wholly inadequate given the current labour market. Training programmes have success when there are jobs that require and reward technical skills, but on their own these programmes will not create more good jobs. The EITC, which currently benefits nearly one in five workers, lifts only some of its recipients’ households above the poverty line. Even then, their income rises just barely and to a level well below what a family needs to pay even its most basic living expenses.
Our nation should not ask people to show up every day and devote most of their waking hours to work in exchange for a paycheck that’s insufficient to cover basic needs. And we should not add insult to injury by pretending a meager set of government benefits is an adequate supplement to those low wages, or by promising against all evidence that labor market advancement is likely if people just keep working. That promise rings increasingly hollow if not cruel to hard-working people who have seen their economic fortunes moving steadily in the wrong direction.
Finally, we cannot continue to ask people who earn marginally more to pay ever higher taxes to subsidise the incomes of those whose paychecks just aren’t enough, breeding resentment among those who have little for those who have less.
We need to summon both the courage and the imagination to envision a system in which all work can be good work. We will never solve our jobs problems unless we find a way to make true an idea that people from across the political spectrum should be able to agree on: people who work hard should not be poor. We urgently need to find ways to make that ideal a reality in America.
There is not a “silver-bullet” solution to this challenge. We need business leadership, and we also need to rebuild the agency of working people so they have a stronger voice in our public discourse. We need to look clearly at work and reimagine how more of today’s jobs can be good jobs, rather than longing for the jobs of yesterday.
Many have already started paving the way. Companies like QuikTrip and the Container Store demonstrate how service businesses can invest more in and expect more of their workforce, and how that approach can be a driver of value for customers, workers and investors over the long-term. Organizations like the National Domestic Workers Association and Restaurant Opportunity Centers United create new ways for working people to engage in debates about business practice and public policy in America. These organizations help advance the dignity of work and the rights of workers who are performing critical — and often undervalued — tasks in our economy, such as caring for children or preparing and serving food. These organizations have demonstrated how advancing the interests of workers also works to the benefit of consumers and communities.
We cannot deny the critical role of government in setting the economic rules of the road. Government helped to rid America of child labor, dramatically reduce workplace injuries and fatalities, and improve the education and capabilities of large numbers of working people. We need a set of standards for work that is adapted to a modern economy, and that more people believe are fair rather than reflective of a “rigged” system. And we need to reimagine the roles of individuals, businesses, social institutions and government in moving forward a system that truly values work.
If we want to address the jobs problem, we need to get real about what that problem is, as well as what it will take to fix it.
Originally published by the Aspen Institute, Monday 4 January 2017.
Elliot Gerson (Connecticut & Magdalen 1974) is the National Secretary for the Rhodes Scholarships in the USA and is the executive vice-president at the Aspen Institute.