Mark R. Warner, a Democrat from Virginia, is a member of the U.S. Senate.
Modern American capitalism is not working for many Americans. That’s why, no matter what your political leanings, fixing an economy that can no longer be counted on to create steady, well-paying jobs for all has to be our top priority.
Whether you were heartened or heartbroken by the election results, millions of American voters have made one thing clear: There is a widespread belief that our once great institutions are unable, or at least unwilling, to work together to address today’s economic challenges.
Job creation has continued for 73 straight months. Wages are beginning to rise. Still, the populist tide we’ve seen all year is fueled by Americans who continue to white-knuckle it every day, believing they are just one or two paychecks away from disaster. Indeed, too many of them are.
Democrats and Republicans in Washington largely have failed to respond adequately to the seismic shifts that have been occurring for some time across our economy, many of them triggered by increased automation and global, competitive pressures.
While there is no consensus yet on how to respond to a globalized economy that now disrupts at Internet speed, here are a few ideas for equipping Americans with new tools to help navigate the changes:
First, while much attention has been given to the recent growth in gig-economy start-ups such as Uber, Lyft and TaskRabbit, this app-driven work remains a relatively small part of a much broader universe of freelance, temporary and part-time work. About one-third of working Americans today are involved in some form of contingent work, and that’s expected to swell to nearly 50 percent over the next decade.
Workers unattached to traditional long-term jobs typically have limited access to social insurance such as health care, disability insurance and retirement savings, which provide peace of mind and a safety net to protect them if needed. At the same time, we have never made it easy for even successful independent contractors, such as consultants and lawyers, to find or fund their own social insurance.
So we should be encouraging more innovation and experimentation around portable benefits — a 21st-century safety net tied to the individual, not the job. This approach could provide greater income stability and protection for workers who hold multiple jobs — whether across a single day or an entire career.
Second, the government-driven, top-down programs to train workers for today’s jobs simply don’t function well enough. The jobs available today and the jobs expected tomorrow are higher-skill positions that will require targeted and continuous learning to allow workers to adapt to changing technology.
Congress should be talking about ways to incentivize businesses to provide additional training, especially for their lower- and middle-skill workers. We should discuss the appropriate metrics to make sure this training actually results in higher skills and better pay.
Third, too many U.S. public companies today are preoccupied with short-term profits at the expense of longer-term investments. While we used to see 50 percent of corporate profits reinvested in a business, today about 95 percent are redistributed as dividends or stock buybacks. This short-term focus robs companies of the investments in capital and people that make them a source of longer-lasting, well-paying jobs.
Investors, too, have increasingly displayed this short attention span. In the 1960s, the average hold of a share of public stock was eight years; today, it’s four months. If Washington is serious about tackling tax reform next year, we should be looking for constructive ways to encourage more public companies and their shareholders to make longer-term investments.
And while we’re at it, greater transparency around things such as stock buybacks and executive compensation would help restore public confidence in U.S. businesses, too.
Americans want this economy to work better for more people. They want to know how their jobs will pay for the economic security they have earned by following the rules. And they’re worried about their kids and whether any young person entering today’s workforce will ever have an opportunity to catch up.
If the new president and the new Congress do not find new ways to work together and demonstrate a real resolve to begin tackling these challenges, then we will have learned nothing from the election — and that will be on us.