Editor’s note: This is one of several guest posts related to our Liftoff & Letdown series about the fate of America’s middle class. To go with those stories, we’ve invited a wide range of researchers to weigh in on what is – and is not – holding back U.S. workers. This one is from Heather Boushey, who runs the Washington Center for Equitable Growth.
With every passing political season, Americans are treated to a similar spectacle. One party attempts to defend decades-old policies, while the other seeks to dismantle them. Both express outrage about the sadly predictable efforts of the other. These entrenched positions miss a bigger point: What’s needed today are new solutions, both public and private, that improve upon policies from a bygone era.
America’s families look very different today than a generation or two ago. Too many families fear they are falling out of the middle class or will never get there due to a combination of stagnating wages, rising and high levels of income and wealth inequality, and an increase in jobs with unpredictable schedules and too few benefits.
Yet, our workplaces are matched to a very different time. The foundation for labor standards in the United States are grounded in a set of policies implemented in the 1930s. They include the minimum wage, overtime provisions and unemployment insurance. This basket of social insurance programs presumes a specific kind of work and family structure that was prevalent then, but is not the norm now. In today’s families, women are breadwinners in two-thirds of families with children, complicating today’s workaday family life.
Families and businesses have changed dramatically over the past several decades, but our basic labor laws and social insurance programs have stood still. For example, you could try to raise wages, but that won’t address the fact that at some point, most of us will also need paid family leave. And, even if we address the reality that overtime protections are woefully outdated, we also need to ensure sufficient hours and predictable schedules.
This mismatch between our ever-changing society and labor policies stuck in amber contributes to many of the problems facing today’s shrinking middle class. Policies that recognize the new diversity of families and the role of women in the workplace need to be considered, among them family friendly workplace rules, expanded access to affordable childcare and early childhood education, and earned income tax credits and child tax credits for families eager to enter and stay in the middle class. These are policies that affect families across the income spectrum and constitute areas where there are real opportunities to bridge the red-blue political divide.
Similarly, how workers protect their own interests in the workplace needs to change. For decades, traditional unions were the primary way that workers maintained some degree of bargaining power. The National Labor Relations Act, first enacted in 1935, provides a series of rules that govern what unions can do and how employers must participate in collective bargaining. These rules haven’t been modernized, creating hurdles to unionizing workplaces. Unions have also faced challenges getting workers to buy-in to the traditional labor model, such as the no vote last winter at the Volkswagen plant in Chattanooga, Tennessee. The end result has been declining unionization rates, a leading factor in falling or stagnant wage growth for the vast majority of workers.
Policy changes can help, but so can more informal steps. Around the country, we’ve seen new movements, among them local non-profit workers’ centers that enable workers to network in search of new jobs in their communities. Then there’s the fast-food workers movement, another non-traditional type of union. These and other new organizing vehicles offer another route to giving workers a voice at work.
The economy of the postwar era is gone. Placing the blame or hailing as a redeemer only one institution, whether businesses or labor unions, is unfair and unrealistic. We can never go back, so we need to work on a new model for the 21st century.
Heather Boushey is the executive director and chief economist at the Washington Center for Equitable Growth.