This article by Paul Lind of the New York Times, September 16, shows how the old paradigm of the twentieth century, jobs with solid wages, regular hours and employer-provided benefits, is fast being replaced in this century by a system characterized by more flexible work arrangements of “gigs” and “tasks” with partly socialized benefits provided by the government.
The article is presented in two parts:
SHOULD the goal of public policy be to ensure that all Americans can have good jobs — or good lives? Politicians of both parties say one thing. Policy experts of both parties say another.
Politicians routinely promise that, if elected, they will create more good jobs, which are understood to be jobs with solid wages, regular hours and, perhaps, generous employer-provided benefits. In this campaign year, Hillary Clinton promises “the biggest investment in good-paying jobs since World War II” by means of a mixture of tough trade negotiations, investment in domestic manufacturing, infrastructure investment, research and development, regulatory relief for small business, debt-free higher education and a tax credit to subsidize apprenticeships. Donald Trump proposes to protect American workers from competition with illegal immigrants, the offshoring of jobs by United States-based corporations and harmful practices by trading partners like China.
Far from the campaign stops, in university and think tank offices, the emerging consensus is quite different: Americans should be able to enjoy good lives, even if they have “bad” jobs — jobs with low wages, irregular hours and no employer-provided benefits. Bipartisan experts tend to agree that the decline in employer-provided benefits and the rise of unconventional work arrangements are trends that should be accommodated, by reforms including new portable benefits and expanded income maintenance programs, like tax credits for low-income workers.
For several decades, this consensus has been reflected in what legislators have actually been doing. Slowly, incrementally, Americans have been moving away from a system in which a good job with a generous employer was the key to having a good life to a new system in which even people with low-wage jobs can have access to the basic goods and services that define a decent life in a modern society.
One piece of the new system includes the earned-income tax credit, a means-tested wage subsidy that has enjoyed bipartisan support since its creation in 1975. Expanding wage subsidies is one way to compensate for the low wages paid by many of the new jobs that are being created. According to the Bureau of Labor Statistics, 94.6 percent of jobs added from 2014 to 2024 will be in the service sector. The single largest employer of near-minimum wage workers, the restaurant and food service industry, is one of the sectors with the greatest projected job growth.
Another example is provided by jobs in the health care and social assistance sector. These jobs are projected to grow much more rapidly than the average for all occupations, increasing by 38 percent between 2012 and 2024 and accounting for 3.8 of the 9.3 million new service sector jobs. Many health-related jobs are poorly paid. Home health aides, who need no formal educational credentials and whose median annual wage is $21,850, now significantly outnumber better-paid and better-educated licensed nurses (median wage: $43,090). And low-wage home health aides are more than three times more numerous than medical and health services managers (median wage: $92,710).
Support for expanding the earned-income tax credit or other wage subsidies to compensate for low-wage service jobs like these is shared by Republicans like House Speaker Paul Ryan and progressives like the former labor secretary Robert Reich. The E.I.T.C. supplements statutory federal and state minimum wages. Mrs. Clinton supports a federal minimum wage of $12 to $15 an hour. Mr. Trump says he supports an increase to $10.
Paul Ryan Robert Reich
Meanwhile, fewer employers are providing health insurance to their workers. As of March 2016,no more than 41 percent of workers in the bottom quarter of wage earners had access to sick leave. Part-time workers are even worse off. The Patient Protection and Affordable Care Act — Obamacare — enacted into law in 2010 sought to ensure that all Americans without employer-provided health insurance had access to affordable health insurance, through either Medicaid, state-regulated exchanges or a federal exchange.
Employer-provided, defined-benefit pensions with guaranteed benefits are also becoming a thing of the past. Among workers fortunate enough to participate in employer-sponsored retirement plans, defined-benefit pensions alone plummeted from more than 60 percent in 1979 to fewer than 10 percent in 2011, when around 70 percent of workers with employer plans had 401(k)’s. Roughly half of American workers don’t have access to an employer-sponsored retirement plan.
So it’s no surprise that nearly half of working-age families have no retirement savings at all — and for individuals between 56 and 61, the median retirement account holds only $17,000. Here again, many Democrats and Republicans agree that the answer is to detach retirement security from particular employers, though it should still depend on how much you work. A number of states have considered creating state-sponsored retirement savings plans for private sector workers without employer-provided retirement savings plans. California, Illinois, Oregon and Massachusetts have already established such programs. California’s new Secure Choice plan will require employers that do not provide 401(k)’s to automatically enroll their workers in an individual retirement account.
From the 1970s to the present, then, mostly with bipartisan support (the glaring exception was Obamacare), American policy makers have responded to the decline of high-wage jobs and generous employer-based benefits by gradually expanding the role of the government in ensuring that Americans have adequate income and adequate benefits. Most of this expansion has taken place in what the political scientist Christopher Howard calls “the hidden welfare state” and the political scientist Suzanne Mettler describes as “the submerged state.”
This huge government sector is made up of tax credits, federal grants-in-aid to the states and low-interest loan programs like student loans. Many of these indirect programs, like entitlements and tax breaks for health care, retirement and housing, are not counted as part of the conventional federal budget. This allows Congress to stealthily expand the size of government while pretending not to. The individual mandate of the Affordable Care Act, for example, is a tax, though an unusual one, as the Supreme Court found when upholding its legitimacy in 2012.
To be continued