Democrats: Don't ignore the American worker
Tax credits won't cut it this time
Democrats want to offer Americans a better deal. It's just unclear if they know what it means.
On Monday, Democratic Party leadership officially rolled out the new platform they're running on in 2018: "A Better Deal: Better Jobs, Better Wages, Better Future." The slogan was almost immediately panned by left-wing critics as a limp aping of President Trump's campaign rhetoric.
Now, while the plan has plenty of worthwhile parts and points in an encouraging direction, the critics are right that Democrats still have a big problem. It's just less the lack of a specific policy (though that matters) and more a fundamental misunderstanding of the American economy's malaise.
What, at the end of the day, makes for a good deal?
The answer is leverage. When a company desperately needs a worker, yet that worker can easily walk away from a job offer, the more he or she can demand: better pay, better benefits, better hours, better treatment. But for decades now, workers have needed jobs more desperately than employers have needed labor.
The great myth that countless economists, politicians, and commentators have told themselves — including many liberals and Democrats — is that this change was unfortunate but inevitable. Globalization and technology combined to make a small number of workers "superstars" — far more valuable to improving businesses' bottom lines than the average worker. So these superstars sucked up all the new income the economy was generating, while everyone else got left out. The answer to inequality and wage stagnation, then, is to make all workers more attractive to employers: more skilled, more educated, more adaptable.
You can feel this myth tugging at the Democrats. For years they've championed college as crucial to improving workers' prospects. Their new agenda was almost titled "A Better Deal: Better Skills, Better Jobs, Better Wages," (emphasis mine) implying a cause-and-effect relationship between the first promise and the next two. The central job-creation plank in Monday's agenda is a tax credit that would reward businesses, particularly small ones, for training new workers to take on unfilled job positions.
This is not a good idea. If you look at wage growth for people with more education — particularly younger people — and what jobs they're getting, it becomes very evident that "skills" aren't really the issue. That's because power has systemically shifted away from workers, and to the much smaller population of people who control the upper echelons of the economy across all industries. A far bigger portion of companies' revenues these days is going to profits and payouts for shareholders and upper management than it used to. Meanwhile, a far smaller portion is going to better wages for most workers or investment in new jobs. And because the majority of workers earn less than they once did, they buy less. This, in turn, makes job creation even less important for employers, setting off a nasty feedback loop. The idea that education, skills, and technology cause inequality and wage stagnation is a convenient and self-congratulatory story the upper class has read back onto this sea change.
So when politicians say ordinary American workers have been "forgotten," they're not wrong. But what does that mean, exactly? They've been forgotten because they can no longer force employers to contend with their needs and interests. This story of lost power — of employers and capitalists with all the leverage, and workers with none — is what Democrats must bring back into the center of their narrative.
To their credit, the party is already inching up to this point. Their commitment to a $15 national minimum wage essentially makes the government the bargaining representative of all American workers. The party's call for a national policy of paid sick and family leave would do the same. Their proposal for $1 trillion in infrastructure spending would create jobs and tighten labor markets, making worker far less likely to take just any job offer, no matter how crummy, for fear of unemployment. Democrats are also talking about getting much tougher with antitrust law — though whether they realize just how many companies they'll need to break up to truly roll back monopoly power remains to be seen.
But all this still draws attention to the void at the center of what the Democrats stand for. They need to make it clear they stand for raising up the power of workers, while laying low the power of capitalists.
A full-throated, FDR-style embrace of unions would be a good place to start. Push to scuttle all "right to work" laws and to return union density at least to New Deal-era levels. They should also follow Germany's lead, and call for laws that require half of all corporate boards be made up of worker representatives.
The other side of this is Democrats must absolutely and utterly reject austerity and the politics of balanced budgets. Always seeking to minimize the deficit places government fiscal policy in the service of the wealthy and Wall Street, keeping their labor cheap and their inflation and interest rates low. Democrats should state plainly that the budget deficit will always be whatever is necessary to keep labor markets as tight as possible, permanently. Specific policies could range from industrial policy like their $1 trillion infrastructure investment; a far bigger suite of welfare state entitlement programs whose spending automatically swells in response to recessions; or even a permanent federal job guarantee, which would provide a job to every worker that wants one.
Yes, the common American worker has been forgotten. But Democrats still need to nail down what it would mean to remember them: making the relationship between workers and the people who own and run their companies once again a relationship between equals.