Véronique de Rugy: To lift all the boats, help Americans return to fulfilling work | Everyday
Pushing back against recent pro-worker populism on the right, Michael Strain of the American Enterprise Institute writes that “workers need an agenda for growth and participation”. The addition of the word “participation” to traditional pro-growth ideas is particularly important today.
Millions of pages of studies and commentaries have rightly demonstrated that economic growth lifts all boats. But while necessary, economic growth without removing existing government barriers to work and entrepreneurship will not be enough. It cannot cure the participation crisis that traps many working and low-income Americans.
In addition to the money we earn from our jobs, most of us find intrinsic value in the act of working or in our work community. Of course, some people have very good reasons for not working, such as the desire to stay home with their children. But whether we work or not should not be the result of government-created incentives or barriers.
People on the left have always been inclined to fight poverty and other ills with government benefits, not caring too much about the noticeable and unintended consequences of their favorite programs. From pushing for a higher minimum wage to implementing a federal paid vacation program, they often overlook how these policies lead to potential lost work hours (or even lost jobs). ), lower wages and reduced prospects for promotion (especially for women). Lately, people on the political right have joined the same chorus in demanding counterproductive proposals.
Take some Conservatives’ newfound enthusiasm for universal programs like the extended child tax credit. Due to his remarkable generosity and lack of work or marriage conditions, he could have negative effects on labor market participation and child poverty similar to those created by the US welfare system of before the reform of the 1990s. The same goes for the other left-wing favorite policies now endorsed by some right-wingers, namely industrial policy to boost manufacturing employment and protectionism.
Contrary to how they are sold, these policies will hurt workers without addressing some recent developments that are cause for genuine concern.
Indeed, over the past 20 years, some Americans — disproportionately working-age men — have dropped out of the labor force despite low unemployment. In the past, for example, economic shocks like the Great Recession have been followed by rising unemployment. But as people moved away to find jobs and the economy improved, unemployment returned to lower levels. Not today. This concerns both academics and policy makers. Now, Americans (especially those without a college education) tend to stay in hard-hit geographies, where they remain unemployed.
Unfortunately, right-wing populists were quick to join the left in blaming the free market for these woes and are now demanding an expansion of rights programs. But too often, the reduction in geographic mobility and labor market participation is the result of the very initiatives they call for.
Take, for example, the Social Security disability insurance program. It was created to support people with health conditions or injuries that make work difficult or impossible. He continues to play this role. But the researchers find that the program also helps keep many physically capable adults with limited earning potential out of the workforce. Men make up a large majority of these job applicants.
Another set of problems was brought on by the pandemic when many policies were enacted precisely to keep people out of work. Most notable are paid holidays, child tax credits, large individual stimulus “relief” checks and enhanced unemployment benefits. Many Americans received more than one and found that their income increased beyond what they earned from working. Although understandable at first, the effects linger. With the worst of the pandemic behind us, some workers remain reluctant to return to the workforce. In this, they are encouraged by politicians who would prefer that the handouts continue to circulate permanently.
This situation is unhealthy and fiscally unsustainable. Emergency measures are for emergencies and should be eliminated when such circumstances pass. It’s only a beginning. Congress must finally remove the barriers to worker participation created by long-term government programs. This would lead to more opportunities and better lives for people who have been excluded from the gains enjoyed by most workers.
While these steps may not be the complete answer, a failure to remove barriers to participation could very well undo the government’s other efforts to uplift people and increase economic growth. Americans deserve better.
Véronique de Rugy’s column is broadcast by Creators.