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Prosperity doesn’t trickle down, it comes from the middle-out (Part 5)

By News Express on 01/01/2018

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These are not outrageous demands. Most Americans already enjoy many of these benefits – our challenge is to retain them in the face of the changing nature of employment. And the benefits for the economy would come in the form of more than the intangible (but crucial) metric of worker happiness. The new system would subtract the inefficiency of negotiation from the hiring process. It would encourage employers to provide additional benefits in order to attract the best workers on the job market. It would increase productivity. And it would level the playing field between the large number of employers who believe in providing benefits for their workforce and that small subset of rapacious employers who sacrifice worker happiness for the sake of profits, lowering the bar for everyone else.

What Middle-Class America Could Look Like

Consider Zoe’s improved situation under the Shared Security System’s suite of benefits and labor standards. Not only would Zoe earn prorated benefits at her hotel job, she would also accrue additional benefits in her side landscaping business, as an UberX driver, and as a temp at the hospital. Since benefit proration would eliminate employers’ financial incentive to keep workers under the 30-hour-a-week “full-time” employment threshold, the hotel might finally offer Zoe the stability of a regular full-time job. And if on occasion she worked more than 40 hours a week at the hotel, she would earn time-and-a-half overtime for her troubles.

If Zoe got sick, she would no longer be forced to choose between her health and her job. Paid sick days earned at all of her jobs would be aggregated in Zoe’s Shared Security Account, and the hotel would be legally obligated to allow her to take up to five sick days a year without the threat of retaliation: The hotel would grant the time off, and Zoe’s Shared Security Account would pay out the benefit. The same would hold true for accumulated vacation days.

For the first time in her life, Zoe would be saving money for her retirement, as each of her employers would match 401(k) contributions per hours worked. The few cents she contributes to her retirement fund for every hour worked gardening on TaskRabbit might not seem like a lot of money, but when all the contributions are totaled for every hour of work Zoe puts in every week, she’ll begin to notice a healthy sum stashed away in her monthly statements. The security of knowing that she’s building toward her retirement would likely encourage Zoe to do more to increase her standard of living in the here and now, and to invest in a future that no longer seems like a tightrope walk over a chasm.

Thanks to the minimum wage increase mandated under the Shared Security Standards – up from Colorado’s current minimum wage of $8.23 to about $15 an hour – Zoe would enjoy a tremendous increase in quality of life. With the additional disposable income, she could not only spend more freely within her own community, thereby increasing the profits of local businesses, but she could also plan to take the first vacation of her adult life. Her expenditures on plane tickets, hotels, and goods and services might not amount to much in total, but the ability of millions of people just like her to finally enjoy the security and freedom to spend money on vacations, small luxuries, and hobbies would invigorate the economy in a way it hasn’t enjoyed in decades. Further, if she decided to have a child, her entire world wouldn’t come crashing down around her; maternity benefits, affordable child care, and universal preschool would ensure that she’d be able to give her new family the time it deserves.

If Zoe eventually moved to another job, her accrued benefits would move with her. Or maybe, with her Shared Security Account boosting her confidence, and the opportunity for a debt-free education, Zoe would choose to go back to college for her horticulture degree, in hopes of becoming a landscape architect. No matter what path she chooses, she now has options, like her parents did, for becoming a fully functioning and contributing member of the Great American Middle Class.

Middle-Out Economics and the Progressive Agenda

There are those who blame the decline of the American middle class on structural changes in the underlying economy—on globalization, new technologies, and other disruptive innovations. But that explanation is disingenuous. For in reality, the erosion of the middle class is a direct result of the economic and social policies we have chosen to implement in Washington, D.C., and in state capitals throughout the nation.

We have chosen to cut taxes on billionaires and to deregulate the financial industry. We have chosen to starve our schools and to saddle our children with more than $1.2 trillion worth of student debt. We have chosen to erode the minimum wage and the overtime threshold and the bargaining power of labor. None of this was an accident. The existential crisis facing America’s middle class is the consequence of deliberate policy choices based on trickle-down’s fundamentally flawed theory of economic growth. At times, progressives have been complicit; at other times, merely compliant. But by failing to articulate an alternative economic theory, they have consistently failed to offer voters a better choice.

We believe that seeing growth as a consequence of including more people in a secure middle class not only accurately describes the real economy; it can unite progressives in a new and important way. Across the broader progressive agenda – on immigration, on education, on civil rights, voting rights, marriage equality, health care, pay equity, the minimum wage, and on many other issues – the one thing that our policies all have in common is that they are fundamentally inclusive. For decades, we have promoted this agenda largely as a matter of fairness, but middle-out economics explains why our policies are also inherently pro-growth. It is through this theory of economic inclusion, this message that growth and fairness go hand in hand, that the various elements of the broad progressive coalition – social justice and labor, along with Silicon Valley and business interests – can unite behind a single, coherent, pro-growth economic narrative that puts us squarely on the side of the middle class. And crucially, this narrative will appeal to voters beyond the progressive coalition – independent and swing voters, many of whom value the promise of growth and employment over the ideal of economic fairness.

We must do more than just offer voters a new economic theory – we must draw a sharp contrast with conservatives by proposing bold new policies predicated on the economic primacy of the middle class. The Shared Security System is one such proposal. But more than just demonstrating an innovative solution to providing economic security that is adapted to the sharing economy, a bold new proposal like the Shared Security System would demonstrate progressives’ unwavering and unequivocal commitment to the middle class – to the proposition that growth and prosperity come not from tax cuts for the rich, but from inclusive policies focused on creating a secure middle class. By establishing our twenty-first-century Shared Security System, we will usher in a new era of middle-class economic security, and by so doing also provide American businesses with the economic stability and certainty that they demand.

For further details call on me for in-depth discussions, business advisory services and training.

•Lawrence Chukwuemeka Nwaodu is a small business expert and enterprise consultant, trained in the United Kingdom and the Netherlands, with an MBA in Entrepreneurship from The Management School, University of Liverpool, United Kingdom, and MSc in Finance and Financial Management Services from Rotterdam School of Management, Erasmus University Netherlands. Mr. Nwaodu is the Lead Consultant at IDEAS Exchange Consulting, Lagos. He can be reached via nwaodu.lawrence@hotmail.co.uk (07066375847).

Source News Express

Posted 01/01/2018 7:18:45 PM

 

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