Five ideas for a pro-worker and pro-employer agenda

In the aftermath of President Donald Trump’s election and inauguration, former Democratic presidential candidate Sen. Bernie Sanders urged Democrats to remake themselves as warriors in opposition to big business as the strategy for winning back voters.

“We need to … make it crystal clear that the Democratic Party is going to take on Wall Street, it’s going to take on the greed of the pharmaceutical industry, it’s going to take on corporate America that is shutting down plants in this country and moving our jobs abroad,” Sanders said on CNN in February 2017.

Many progressives have taken that advice to heart. As in many past election cycles, corporate- bashing rhetoric has been the bread-and-butter of many progressive candidates and their supporters pressing for greater governmental intervention on issues such as corporate governance, wages, and worker benefits.

The grassroots group “Justice Democrats,” for instance, is so far endorsing 52 candidates they say “represent people, not corporations,” while “putting Main Street before Wall Street” has become a reliable campaign trope. Other activist organizations are rallying their constituencies against “powerful CEOs” who have been “rigging the economy against working families for decades.”

These instincts are understandable, given the many ways the nation’s current prosperity seems to be bypassing average Americans. Corporate earnings have hit their highest mark since 2011, yet wage growth has been sluggish. Newly mandated disclosures reveal eye-popping disparities between CEO and worker salaries – one study finds the median CEO now makes 140 times as much as the median employee. Many Americans – particularly “gig” workers – seem cast adrift on the economy, with less access to traditional employer-sponsored benefits such as health care and retirement.

But, as a comprehensive economic message and agenda, “fighting big business” unfortunately won’t lead to the kinds of policies workers need.

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Guaranteed Jobs: Too Big to Succeed

As the party out of power, Democrats have the luxury of thinking big as they consider how to topple President Donald Trump in 2020. Bold, ambitious ideas are what the party sorely needs if it is to capture voters’ attention and woo them from Trump’s corrosive grip.

But if Democrats are to craft a winning agenda for 2020, bigness and boldness alone are insufficient; political feasibility and substantive plausibility are also necessary ingredients. That’s why the latest big and bold idea catching the eye of potential 2020 contenders – a federal jobs guarantee – is ultimately a disappointment.

Touted by advocates as a way to achieve “permanent full employment,” the notion of a federally guaranteed job for anyone who wants one has won support from three rumored presidential hopefuls so far, including New York Sen. Kirsten Gillibrand, Vermont Sen. Bernie Sanders and New Jersey Sen. Cory Booker. Last week, Booker revealed draft legislation3 to pilot a federal jobs guarantee program in up to 15 localities nationwide, while Sanders has floated a much more ambitious national plan4 focused on public works projects at a scale not seen since the Great Depression. Under both proposals, participants would earn wages of up to $15 an hour, along with benefits such as paid family and sick leave and health insurance. “There is great dignity in work – and in America, if you want to provide for your family, you should be able to find a full-time job that pays a fair wage,” said Booker in a press release announcing his effort.

Booker’s endorsement speaks to the inherent surface appeal of a jobs guarantee. To borrow President Bill Clinton’s famous formulation, Americans who “work hard and play by the rules” deserve a shot at self-sufficiency, and the promise of work for all who want it invokes Americans’ innate sense of fair play. Proponents also rightly point out stark disparities in employment between certain groups, the result of discrimination and other structural barriers that guaranteed access to meaningful employment could arguably remedy.

Unfortunately, the idea also suffers from a variety of fatal defects, including its size, timing and relevance and any number of practical obstacles that make it administratively unworkable as well as politically untenable. For one thing, it rests on the dubious assumption that the American electorate – at a time when public cynicism and distrust toward government remain at all-time highs6 – is ready to embrace a dramatically expanded role for the federal government as the nation’s largest staffing agency and employer. More fundamentally,
the idea betrays a deep lack of faith in the inherent resilience of the American economy and its people to weather disruption and change. Most Americans don’t share the left’s inordinate confidence in government’s ability to engineer shared prosperity from the top down. Aggressive advocacy of a panacea like government guaranteed jobs can only reinforce public impressions that progressives will always default to “big government” as the solution to complex economic problems.

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Innovating out of student debt

For many students, the burden of student debt lingers years after leaving college, dragging down their financesand household security. New federal data find that, 12 years after enrollment, students with debt still owed, on average, two-thirds of what they had borrowed –and as many as 27 percent had defaulted.

Colleges, however, face no equivalent long-term financial stake in their students’ education: their obligations are done once the tuition is paid and the last exam is graded. Except perhaps for the pressure to put on a good show for U.S. News

& World Report’s college rankings, schools have little incentive to ensure their students can land good jobs with decent pay – let alone graduate. Students bear the full risk of their investment and cope with the fallout if things don’t pan out as planned.

This lopsided burden of risk is one reason a dramatic expansion in financial aid – i.e., “free college” – can’t solve the crisis in college affordability. Schools would see no need to rein in their costs or to share the risks of investing in education with their students. In fact, the opposite. If the government is willing to pick up more of the tab for students, there’s no reason that tab wouldn’t simply grow – with potentially no reduction in student debt.

What’s needed instead is to break the paradigm of how higher education is financed. That means new mechanisms that both lower the cost of college for students and hold schools more accountable for how their graduates fare in the job market.

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Tax Cuts for the Companies That Deserve It

 U.S. companies are  on track to see dramatic reductions in their tax rates, thanks to the $1.5 trillion tax cut package passed by the GOP-led Congress and signed by President Donald Trump in late 2017.

Unfortunately, it’s far more likely that shareholders, not U.S. workers, will reap the biggest benefits from the Trump tax cuts, despite a handful of companies that have handed out “Trump bonuses” and pledged to pay their workers more.

If we really want companies to do right by their workers, we need stronger incentives. One way to do this is to establish a preferential tax rate for companies that organize themselves as “benefit corporations,” a new legal structure that allows corporations to pursue missions other than just profit.

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The Centrist Premium

For most of the last 30 years, self-described ideological moderates have comprised a plurality of the American electorate. While the share of moderates has dropped slightly in recent years, 38 percent of voters in 2010 still described themselves as such.

In Congress, on the other hand, moderates are decidedly—and increasingly—a minority. Among Democrats, the moderate New Democrat and Blue Dog Coalitions suffered heavy losses among their respective memberships in 2010 and are now outnumbered by their liberal counterparts in the Progressive Caucus. Among Republicans, moderate
members are an even rarer species. In fact, there are only 33 members of the moderate Republican Main Street Partnership who are not also part of the 177-member conservative Republican Study Committee.

Analysts have offered up structural explanations—such as gerrymandering and the current political primary system—for why there aren’t more moderates in elected office to reflect America’s true ideological complexion. This paper looks at another structural disadvantage that moderate candidates and incumbents face: campaign finance.

For better or for worse, financing plays a major role in a candidate’s viability and success. Financing buys the ads and ability to raise a candidate’s profile, counter the opposition and turn out the vote. A hefty campaign war chest can be enough in itself to discourage potential rivals.

According to the Federal Election Commission, House Congressional races cost a grand total of nearly $1.1 billion in 2010—or $2.5 million per seat. Moreover, elections are becoming increasingly expensive. The spending in 2010 was nearly double the $563 million spent just a decade ago in 2000. But as this analysis shows, the burden of fundraising falls much more heavily on moderates. While it’s axiomatic in today’s politics that winning and keeping a seat is more expensive in “moderate” districts than in more reliably red or blue turf, this analysis provides a case study that quantifies just how much the “centrist premium” costs.

In particular, this analysis draws on Federal Election Commission data to compare the campaign expenditures made by Democratic candidates and their opponents in “moderate” versus “liberal” districts in the House. To avoid ideological judgment calls, self-selected members of the New Democrat and Blue Dog Coalitions and the Progressive Caucus were used as proxies for defining “moderate” and “liberal.”

Among the key findings:

1. Moderate Democrats and their opponents spent more than twice as much on their campaigns in 2010 as their counterparts in liberal districts. Blue Dogs, New Democrats
and their opponents spent an average of $3.3 million on their campaigns, compared to an average of $1.6 million spent by candidates and opponents in Progressive Caucus districts. Not only did moderate candidates spend more to defend their seats, they
faced better-financed challengers.

2. Moderate candidates were much more likely to draw outside spending in their districts. On average, outside groups spent a district-by-district average of $1.46 million in Blue Dog and New Democratic races, versus an average of just $257,000
on Progressive Caucus campaigns. With the inclusion of outside spending, the total cost of campaigning in moderate districts soars to an average per district of $4.76 million, compared to a grand total average of $1.87 million in liberal districts.

3. “Safer” moderate members still pay a premium. On the whole, veteran moderates spend less on their campaigns than newcomers. Nevertheless, among Blue Dog, New Democratic and Progressive candidates who won by similar margins, moderate
candidates and their opponents still outspent liberal candidates and their opponents by an average of almost $900,000.

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