Yesterday, I wrote about the conservative poverty agenda, concluding that there wasn’t much of one. But another aspect of that conversation which I didn’t mention is about middle-class jobs. The fundamental stumbling block for Republicans is their unwillingness to distribute resources down the income ladder. Conservatives tend to worry that federal spending on expanding the safety net will simply function as a hammock lulling people into dependency, as Paul Ryan has suggested.
But if conservatives and Republicans were to support more spending to redistribute money downwards, there is reason to think it could do more than simply give money to the poor — it could have a real impact in terms of creating good paying jobs. In other words, conservatives could reduce poverty and increase middle-class job creation through free-market action in one fell swoop.
So here’s a chunk of Marco Rubio’s speech yesterday:
The only solution that will achieve meaningful and lasting results is to provide those who are stuck in low paying jobs the real opportunity to move up to better paying jobs. And to do this we must focus on policies that help our economy create those jobs and that help people overcome the obstacles between them and better paying work. The War on Poverty accomplished neither of these two things.
Or as he’s quoted here, regarding raising the minimum wage: “$10.10 is not the American dream. I want them making $50.” And sure, that would be great – stagnating wages is obviously something lefty writers worry about too. Indeed, most jobs created since the crisis have been low-paying.
But it’s mistaken to think of the problem of poverty/crappy jobs and the problem of a scarcity of good-paying middle-class jobs as completely unrelated. The reason for this has to do with services.
As in all industrialized countries, service jobs make up the vast bulk of employment in the United States, accounting for roughly 80 percent of all jobs. As manufacturing and other high-value sectors have moved overseas or been automated, service jobs have risen to take up the slack. When people think services, they often think “maid” or “cashier,” and those positions are indeed poorly compensated. But that’s not the end of the story.
A recent story I wrote for the Washington Monthly explains how recreation-based economies can create better-paying service employment. Places like Moab, Utah indeed have some crummy service jobs — but they also have substantially better-paying ones, like river guide or concierge. The thing to remember is that the number of high-paying service jobs is inextricable from the population’s level of disposable income. You can’t be a river guide if people can’t afford to pay for the trip.
This is where distributing resources down the income ladder comes in. We have an economy that mostly creates service jobs because automation and globalization have foreclosed most other avenues of jobs creation; these service jobs are too-few and low-paying because income inequality and the Great Recession have radically reduced people’s disposable income.
The great thing about this realization from a conservative viewpoint is that these higher-paying jobs are created by free market action. People still have to start businesses, hustle for work, and all that stuff. All that is needed is a willingness to spend some money.
Conservatives could even stick a lot of work requirements or other beloved supply-side reforms in there. Eli Lehrer and Lori Sanders have a sample agenda outlined here. But the keystone part of any agenda must be a transfer of resources, either through tax credits or direct spending. Without that, it will accomplish little.