Our national debate about the economy has shifted in the past year or so, as most everyone acknowledges that we need to address some fundamental problems that have been developing for decades. Over the last 30 years, wages have stagnated even as productivity has risen. Most Americans feel insecure despite strong job growth. People at the top are doing terrifically, but prosperity isn’t trickling down. Add to that the changes that technology is bringing, with the rise of the “sharing economy” and the mechanization of more and more types of work, and the moment would seem to demand new ideas to adapt the new reality.
Yet both parties are essentially offering the same menu of policy options they have for some time, with only slight variations. Republicans want to cut taxes and roll back regulations. Democrats want to increase the minimum wage, raise the overtime threshold (allowing millions more to get overtime) and mandate paid family leave.
Even the Democratic ideas are essentially about updating existing rules to account for inflation, or broadening benefits for some workers. As of yet, they haven’t proposed anything truly transformative. But big ideas are out there.
One of them is laid out in the current issue of the journal Democracy, where Nick Hanauer and David Rolf propose what they call a Shared Security Account as a way of re-imagining the relationship between employers and employees in a world where that relationship is increasingly part-time and short-term. Hanauer, a tech entrepreneur and venture capitalist who made waves last year when he wrote an article excoriating his fellow plutocrats for ignoring (and profiting from) rising inequality, argues that if we want to do something about the economy’s ills, we have to think in more fundamental ways about the changing nature of work.
Hanauer and Rolf tell their story through a paradigmatic worker named Zoe, who works part-time at a hotel, drives for UberX, and does odd jobs for TaskRabbit in order to cobble together a living. But she gets no benefits – no health insurance, no paid sick time, no vacation, no retirement savings – from any of them. So how can she and people like her get some measure of security? Their answer is the Shared Security Account, which functions like Social Security but encompasses all the benefits now available only to those who work full time for a large employer.
Built into all those transactions would be a deposit into this account that Zoe could draw on to take paid sick leave and vacation, and pay for health insurance. It would be universal, applying to everyone, not just those who work at big companies. It would be portable, meaning it would travel with Zoe from job to job. And it would be prorated, meaning the money would be deposited in the account whether she did one hour of work for a particular employer that week, or 40 hours. As Hanauer told me with an emphasis bordering on exasperation, “If you work for ten hours for a company, you should get ten hours of benefits.”
Hanauer believes the kind of innovation represented by companies like Uber is a net positive for American society, but whether you agree with that or not, it’s here to stay.
“Rather than pretending like it’s going to go away, we need to rebuild the way in which we manage our economy in the context of this kind of innovation,” Hanauer says. “In the same way that FDR built a system that worked in the industrial age, we need to reconstitute all of those relationships in the context of the 21st century economy.” But this doesn’t just apply to millennials in the sharing economy. Millions of Americans who work in industries like retail and food service aren’t getting benefits either. Hanauer calls those employers “parasites,” who pay their workers sub-poverty wages knowing that other people’s taxes will fund the safety-net programs that enable their employees to survive.
But those employees are powerless to bargain for a better deal. “In a world where a person may have as many employers in a year as their parents had in their entire careers, it’s impossible for that person to negotiate what it takes to lead a decent and dignified life with each one of those employers,” Hanauer says. “If all you have is gigs, and you can barely get by, how do you get vacation? And indeed, if you look at the data, what’s happening is that the number of vacation days that the typical worker takes in the United States is plummeting. This is nuts.”
There’s a political problem, though: establishing a Shared Security Account would mean that businesses are going to incur extra expenses, which means they and their allies in the Republican Party would fight hard against it. When I asked Hanauer how he could convince business owners that such a system would be in their long-term interests, he argued that trying to win them over is fruitless.
“For as long as there’s been capitalism, in the face of an advance of something like wages or protections that benefit workers, capitalists have said the same thing: ‘It’ll kill jobs. We’ll have to lay everybody off. It’ll destroy the economy,'” Hanauer says. “And it has never been true.”
Hanauer then argued against the idea that an increase in wages reduces the number of jobs: “That claim is a con job. It’s a scam. It’s an intimidation tactic. The only thing that’s true about the claim that if wages go up then employment goes down is that if people like me can get people like you to believe it, it will be very good for people like me.”
The Shared Security Account is a fairly radical idea, re-imagining the relationship between employment and the benefits that are now associated with it. And there are lots of practical questions that would have to be answered before something like it could be implemented. But just as the fact that we get health benefits through our jobs is nothing more than an accident of history, there’s no reason that sick leave and vacation need to rely on the generosity of your boss. And if someone like Hillary Clinton wants to show that she’s got new ideas for helping the middle class exist in today’s (and tomorrow’s) economy, an idea like this one isn’t a bad place to start.