U.S. economic policies have failed to restore full employment and in some ways have made labor market conditions worse for many Americans, panelists from Washington University in St. Louis said during a recent presentation in Washington, D.C.
Marion Crain, JD, vice provost and the Wiley B. Rutledge Professor of Law at the School of Law, and Michael Sherraden, PhD, the George Warren Brown Distinguished University Professor at the Brown School, are co-editors of “Working and Living in the Shadow of Economic Fragility.”
The book was published recently as part of the “Livable Lives” interdisciplinary collaboration initiated by the Center for Social Development at the Brown School, which Sherraden directs, and other WUSTL schools and departments.
Crain and Sherraden were in the nation’s capital May 28 at the New America Foundation for a panel discussion called “In the Shadow of Economic Fragility: Work and Life After the Great Recession.” The event was a chance, Crain said, “for scholars to talk to the world.”
The panel focused on the challenges American workers of all stripes face in the new economy. “We should think not just in broad economic terms,” Sherraden said, “but also in the micro sense: What’s happening to real people?”
He said the U.S. has not had an active employment policy in response to the Great Recession, instead emphasizing stimulus for demand for goods and services through tax cuts and monetary incentives.
“Today, to the extent that employment policy is discussed, it is in terms of whether it can improve overall economic growth, rather than how it can stabilize workers and their families,” Sherraden said.
Unemployment remains high, particularly among young people and minorities. Sherraden suggested active employment policy as one possible solution, citing the New Deal’s Civilian Conservation Corps, which employed 300,000 young men – equivalent in today’s labor market to 1 million workers. “In the 1930s, the country came around to the idea that employment should be a high priority,” he said.
Similarly increased employment and productive work could be possible today through expansion of organizations such as AmeriCorps, Sherraden said.
But even good labor market policy won’t be enough to sustain many American families, as wages continue to remain stagnant at the bottom, he added.
“We’re living in a world where labor receives a gradually decreasing share of the total economic product,” Sherraden said. “Under these conditions, we must rethink what it takes to make a stable household, and we should think beyond labor income.”
One place to start, he said, would be to extend public subsidies for retirement accounts and home ownership to the full population.
“Today, hundreds of billions of dollars a year in public support for asset accumulation go almost entirely to the top half, mostly to the top 10 percent,” he said following the event. “It is regressive public policy, exacerbating inequality, and by any reasonable standard it is bad governance. It’s a kind of scandal, though we don’t talk much about it. These resources should be fairly distributed to all households.”
Crain, director of the Center for the Interdisciplinary
Study of Work and Social Capital at the School of Law, said the book contends that “economic fragility is a consequence of deliberate policy choices.”
One example, she said, is the diminished power of labor unions. The labor movement enjoyed its heyday from the 1930s through the 1950s with the stimulus of the Wagner Act, which protected the right to organize and to bargain collectively. Unions improved wages and benefits, especially for people of color and women, and established norms such as job security and progressive discipline that were adopted even in non-union companies.
By the 1950s, unions represented one-third of the workforce; today it’s just 11 percent, much of that in the public sector.
Crain said the decline is partially attributable to amendments to labor laws and court decisions that “have made what was a promise to workers into a dangerous illusion.” She argued that congressional gridlock has rendered much of labor law obsolete, rendering it a poor fit for our changing economy and workforce.
Crain recommended repealing the National Labor Relations Act and replacing it with a federal statute modeled on the antidiscrimination laws, which would protect the core right to organize and impose meaningful sanctions for employer retaliation.
The new statute should fully protect the right of assembly, including rights to strike, picket and conduct secondary boycotts, she said. With these protections secured, an obligation to bargain on a worksite-by-worksite basis would no longer be necessary; workers would have the tools to press for the kinds of industrywide agreements that they need in a modern, mobile work environment, she said.
“Dramatic inequalities require dramatic solutions,” Crain said.