The continuation of an article in the New York Times of September 16 by Michael Lind.
The solid job of full-employment, retirement and health benefits paid for by the employer and union representation of the fifties and sixties are over, according to this article, to be replaced by part-time work with benefits subsidized by either the state or federal government (socialism?).
In terms of direct spending on social welfare, the United States seems miserly compared with many other developed nations. But according to a recent study for the Peterson Institute for International Economics by Jacob Funk Kirkegaard, this is an illusion. When tax-favored private social spending is combined with public spending, American public expenditures at 20.8 percent of G.D.P. are only a little lower than the average in 21 states of the European Union. Mr. Kirkegaard concludes, “Taking the full effects of tax systems and social spending from both private and public sources into account, the United States is seen to be devoting more resources toward social purposes than is generally acknowledged.”
Preserving the fiction of a small federal government by relying on the hidden welfare state to deliver benefits sometimes comes at a cost. For example, unemployment insurance is not a simple, straightforward, uniform federal program, but a hodgepodge of separate state programs financed partly by the federal government and partly by the states. During economic downturns, this design often creates crises, because the federal government can more easily borrow money in recessions than state governments bound by balanced budget provisions in their state constitutions. And as Suzanne Mettler has pointed out, the importance of indirect benefits in America creates political problems, too. Middle-class American voters often underestimate how many government benefits they receive, while overestimating the cost of means-tested welfare for the poor. Unfortunately, the preference of American policy makers for what the political scientist Steven Teles calls “kludgeocracy” — indirect, complex, off-budget mechanisms rather than simple public programs financed through higher taxes — seems likely to persist.Looking back over the last half-century, we can discern a long-term trend in which the United States government at all levels has been gradually responding to the decline of high-wage, high-benefit jobs, by methods such as gradually socializing benefits (state-run retirement plans) and partly subsidizing wages (the earned-income tax credit). Is this a trend to be welcomed or feared?
One criticism is that the growing socialization of wages and benefits, combined with the decline of employer-provided benefits, transfers responsibility for the well-being of workers from employers and their customers to taxpayers. But any welfare state of any design allows employers to pay somewhat lower wages, because workers do not have to pay for goods like retirement security or health care entirely from their after-tax earnings.
But the political problem remains. Even if center-left and center-right policy wonks agree that the goal should be good lives for all workers, even those with bad jobs, many Americans do not agree, to judge from the rhetoric of politicians, who know their audiences well. The replacement of a world in which one or a few lifetime jobs in a paternalistic company that provided benefits during your working life and a pension after your retirement by a future in which individuals struggle to survive by piecing together “gigs” and “tasks” with a bewildering variety of federal, state and local social programs may strike many workers as a dystopian nightmare. The price of increased flexibility may be increased stress.
The emerging policy agenda tends to shift administrative burdens from employers to the least-educated and worst-paid workers in America. Members of the professional class who are well-remunerated freelancers and can hire tax preparers have a quite different experience of the new economy than high school dropouts who, between part-time shifts, struggle with the paperwork for the earned-income tax credit, Section 8 housing vouchers, food stamps and other benefits.
More opportunities for part-time work can benefit retirees, who are able to rely on Social Security for a basic income. And a Pew Research Center poll in 2013 showed that half of working mothers say that part-time work would be ideal for them. For other workers, particularly those in low-wage service jobs, irregular and unpredictable working hours are often unwelcome.
The unelected policy experts who envision a future of multiple job types and a greater, if hidden, role for government in maintaining minimum incomes and providing health and retirement benefits are essentially right. The elements of a “good job” — adequate income, health insurance and retirement benefits — that were once combined in the package that a Detroit automobile manufacturer provided to a unionized male steelworker in 1950 are likely to be provided, for most American workers now, by some combination of employer and government.
Until most American workers are persuaded that they will not be worse off in a system characterized by flexible work arrangements and partly socialized benefits, they may continue to make unrealistic demands that 21st century politicians restore something like the occupational structure of the 20th century. Politicians should tell working Americans what they need to hear, not what they want to hear. And what they need to hear is that it is possible for all Americans to have good lives, even if they can’t all have good jobs.
End of article