Social Democratic America (28 page)

Access to health insurance, old-age income security, and other types of insurance will no longer be tied to one's employer. The
taxes that fund particular programs will still be levied partly on payroll, as the Social Security and Medicare taxes currently are. And companies will continue to offer particular types of benefits, such as contributions to a private pension plan, in order to attract better employees and keep existing ones. But these will supplement the public insurance programs.

A larger share of our GDP will go to taxes and government expenditures. Yet in another respect, government will be smaller: there will be fewer regulations on firms and individuals. We'll always need some restrictions to prevent financial excesses, protect worker and consumer safety, safeguard the environment, and more. But we will rely less on specifying what businesses can and can't do and more on competition coupled with cushions. If we do better at enforcing antitrust rules and scrap or reduce regulations that create barriers to entry, competition will help to align business behavior with the preferences of consumers. Insurance—both compensatory and proactive, both cash payments and services—will cushion those who are victimized by market processes or the vagaries of life.

Government also will be more efficient and effective in its administration. Those who favor expanding public insurance ought to be at the forefront of efforts to improve government's performance. This is the approach modern social democrats in the Nordic countries tend to take. As a Danish Social Democratic prime minister has put it, “If you have a large public sector, you have an obligation to wake up every morning searching for ways to make it work better.”
²
The Clinton administration's Reinventing Government initiative, headed by Vice President Al Gore, contributed to this process in the United States. The Obama administration has attempted to streamline and improve regulation.
³
It also has encouraged stronger accountability standards for public schools and teachers. And the 2010 healthcare reform included steps to increase use of evidence-based treatment in Medicare. Though not always a priority for America's left, movement in the direction of better government is likely to continue.

Will outcomes improve? Here too I am optimistic, albeit cautiously so. A universal system of good-quality affordable early education beginning at age one will boost opportunity for American kids who grow up in disadvantaged homes and neighborhoods. Other policy shifts will help too: an increase in the Child Tax Credit, less incarceration of young men who commit minor offenses, and affirmative action targeted at the economically disadvantaged.

Shifts in markets and institutions will continue in the direction of less economic security. More of us will work in jobs with low pay, lose a job once or more during our work career, and reach retirement age with insufficient savings and an inadequate 401(k). Families, community organizations, and labor unions may be even weaker than they are now. But if we fill in the gaps in our public safety net—with universal health insurance, less-porous unemployment insurance, wage insurance, a new public defined-contribution pension program with automatic enrollment, sickness insurance, paid parental leave, a minimum wage indexed to prices, better support for making work pay, more robust social assistance, and individualized advising and support throughout the life course—most Americans will be more secure in spite of these shifts.

What of shared prosperity? It's quite possible that inequality of market incomes will continue to rise in coming decades. More to the point, there is a good chance that wages for Americans in the middle and below will be stagnant, as they have since the 1970s. But if we increase provision of public goods, services, spaces, and free time, living standards will rise even if incomes don't. And if we restructure the Earned Income Tax Credit in the way I suggest in chapter 3—expand eligibility, boost the benefit level for persons with no children, and index it to average compensation or GDP per capita—we can ensure that the incomes of lower-half households more closely track growth of the economy even in the absence of rising wages.

This America will be a society with greater security and fairness. The economy will be flexible, dynamic, innovative. Employment will be high. Liberty will be abundant. Balancing work and family
will be easier. Though we'll need to pay higher taxes, this sacrifice will be a small one, because we will receive a lot in return.

We've come a long way on the road to the good society, but we have many miles yet to travel. Happily, our history and the experiences of other rich nations show us the way forward. The United States is a much better country today than it was a century ago, and a key part of the reason is that government does more to ensure security, opportunity, and shared prosperity now than it did then. In the future it will do more still, and we'll be the better for it.

I'VE PRESENTED PARTS
of this book at an array of venues over the past few years and have had numerous discussions about its ideas in less formal settings. I thank the many participants, discussants, critics, colleagues, and friends who've offered valuable comments and suggestions. The venues include the American Sociological Association annual meeting, Chung-Ang University (Seoul), the 14th International Conference of the Giordano Dell'Amore Observatory (Milan), the Harvard Kennedy School, the Korea Labor Institute, the Next Centre-Left Century conference (Oxford, UK), the Paris School of Economics, the Resolution Foundation (London), the Roosevelt Institute (New York and Washington, DC), the University of Arizona, the University of California-Berkeley, the University of California-Los Angeles, the University of Kansas, the University of Kentucky, the University of Pennsylvania, the University of Toronto, Washington University (St. Louis), and Yale University. I'm particularly grateful to Corey Abramson, Bruno Amable, Jon Bakija, Jared Bernstein, Irene Bloemraad, Jerome Bourdieu, Ron Breiger, John Bullock, Kathryn Edin, Neil Fligstein, Martin Gilens, Jacob Hacker, Alex Hicks, Michael Hout, Christopher Jencks, Frank Lechner, Peter Lindert, Julia Lynch, Jeff Madrick, Ive Marx, Leslie McCall, Karen Myers, John Myles, Paul Pierson, Charles Ragin, Joel Rogers, Tim Smeeding, Joe Soss, Robin Stryker, Jeff Weintraub, Bruce Western, and Scott Winship. Apologies to anyone I've inadvertently failed to include in this list.

Thanks also to David McBride and the production and marketing teams at Oxford University Press, and to Elizabeth Thompson and Ginny Faber for editing.

As always, I'm thankful most of all for my family: Kim, Mia, Hannah, Noah, and Josh.

1
. Kessler 2011; Yglesias 2011.

2
. Reich 2007, p. 50.

3
. See chapter 2.

4
. See chapter 4.

5
. Ibid.

6
. Graetz and Mashaw 1999; Chetty and Finkelstein 2013.

7
. Graetz and Mashaw 1999; Barr 2001; Moss 2002; Quiggin 2007.

8
. See chapter 3.

9
. I made this title up, assuming there was no such thing as a “Progressives' Handbook.” It turns out there is.

10
. Gangl 2006.

11
. Duncan, Huston, and Weisner 2007.

12
. Polanyi 1944.

13
. Yglesias 2013.

14
. See chapter 4.

15
. Atkinson 1999; Lindert 2004.

16
. Przeworski 1985; Esping-Andersen 1990; Berman 2006; Sejersted 2011.

17
. Esping-Andersen 1990.

18
. Esping-Andersen et al. 2002; Huo, Nelson, and Stephens 2008;

Kenworthy 2008a, 2010b; Kristensen and Lilja 2011;

Pontusson 2011; Hemerijck 2012; Morel, Palier, and Palme 2012.

19
. Baumol, Litan, and Schramm 2007.

20
. See chapter 4.

21
. See Kenworthy 2011c, ch. 5.

22
. Due to the coming retirement of the baby boom generation and projected increases in healthcare costs, Medicare and Social Security costs are likely to rise by 2–4 percent of GDP.

23
. See chapter 4.

24
. See chapter 4.

25
. Kenworthy 2011c, ch. 8.

26
. This conclusion is similar to that of Wilensky 1975, 2002.

27
. Prominent exceptions include expansion of Social Security in the 1950s and indexation of its benefits to inflation in the early 1970s, creation of the EITC in 1975 and its expansion in the 1980s, designation of food stamps as a federal entitlement in the mid-1970s and expansion of food stamp eligibility in the early 2000s, increases in Medicaid coverage and benefits in the 1980s, and the extension of Medicare coverage to prescription drugs in 2004.

28
. See Heclo 1974.

1
. Lebergott 1976; Cox and Alm 1999; DeLong 2009; Fischer 2010, ch. 2.

2
. Moss 2002; Castles et al. 2010. These laws and programs offered, in Franklin Roosevelt's words, a “safeguard against misfortunes which cannot be wholly eliminated” (speech to Congress, June 1934).

3
. For a contrary view, see Winship 2012.

4
. Osterman 1999.

5
. Uchitelle 2006.

6
. Hacker 2006. See also Hacker 2011.

7
. Gosselin 2008.

8
. Hacker, Rehm, and Schlesinger 2010, figure 4.

9
. Osterman 1999; Baumol, Blinder, and Wolff 2003; Fligstein and Shin 2003; Uchitelle 2006; Blinder 2009a; Farber 2010; Kalleberg 2011.

10
. Western, Bloome, Sosnaud, and Tach 2012.

11
. Congressional Budget Office 2010. The standard indicator of low income is the poverty rate, which tells us the share of people in households with incomes below a particular level—the poverty line. But there is little agreement about where the line should be drawn, so skeptics rightly worry that if the line is a little bit lower or higher, the estimate of how many are poor will change significantly. I prefer to instead look directly at the incomes of the least well-off. See Kenworthy 2011b, 2011c; also Burtless and Smeeding 2001.

12
. Rector 2007; Eberstadt 2008.

13
. Edin and Lein 1997; Ehrenreich 2001; DeParle 2004.

14
. Caner and Wolff 2004.

15
. Mayer and Jencks 1993; Edin and Lein 1997.

16
. Rank 2004, table 4.2, using Panel Study of Income Dynamics (PSID) data.

17
. Ibid.

18
. Boushey, Brocht, Gundersen, and Bernstein 2001. See also Gould, Wething, Sabadish, and Finio 2013.

19
. Wider Opportunities for Women 2011.

20
. Census Bureau 2011, table B-2.

21
. Wolff 2011, table 4.1.

22
. Center for Retirement Security 2009, using data from the Survey of Consumer Finances. The numbers sum to more than 100 percent because some people are enrolled in both types of plan.

23
. Another potential advantage is that a defined-contribution plan isn't vulnerable to a firm going out of business or declaring bankruptcy. Such an occurrence can leave those in a traditional company pension plan out in the cold, though most such pensions are guaranteed by the federal government-backed Pension Guarantee Benefit Corporation.

24
.
Economist
2008; Ghilarducci 2008; Wolff 2011; Fletcher 2013.

25
. My calculations using OECD data.

26
. Layard 2005.

27
. Rose and Winship 2009, figure 6.

28
. Rose and Winship 2009, figure 2. For additional estimates based on the PSID data, see Gosselin and Zimmerman 2008; Hacker and Jacobs 2008; Jensen and Shore 2008; Dynan 2010; Dynan, Elmendorf, and Sichel 2012.

29
. Winship 2012, figure 1. For additional estimates based on the SIPP data, see Acs, Loprest, and Nichols 2009.