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Agenda for Shared Prosperity Launches Today |
Seemed like after the Nov. 7 elections, “economic populist” lawmakers were everywhere in the media. But in fact, those who champion policies that lead to family-supportive jobs, affordable health care and secure retirement have been out-shouted by political leaders who see no problem with sending U.S. jobs overseas under the guise of “free”—but not fair—trade and who offer failed “stay-the-course” tax and foreign exchange policies.
Making sure more lawmakers understand what’s needed to make the American economy work for the middle class is critical as we move toward the 2008 elections. Today, progressive economists joined together to launch the Agenda for Shared Prosperity, a network backed by the nonprofit Economic Policy Institute (EPI) to address the growing gap between America’s promise and its problems. As EPI President Larry Mishel put it:
We challenge the pervasive conservative philosophy that Americans must rely solely on their own efforts.
“Boutique ideas” such as a middle-class tax cut here or there are individual fixes that will never solve the nation’s long-term economic challenges, such as a high and rising inequality in which U.S. corporate chiefs make more in one day than the average working person earns in a year, Mishel said. Instead, the Agenda for Shared Prosperity seeks to provide a comprehensive approach, one that will spark a new generation of social and economic reform in this nation.
Speaking via videocast at today’s launch, Virginia Democratic Sen. James Webb gave his strong support to the Agenda’s goals, telling participants he wanted to “re-emphasize my commitment to these issues and my willingness to work with you.”
As the economy continues to grow—hopefully—we want to be sure that those who are doing the work of this society receive an increasingly fair share of the growing economy.
One of Webb’s first acts after his election victory in November was authoring an op-ed in The Wall Street Journal in which he described the nation’s “ever-widening divide” between the extremely wealthy and those who work for them—and urged lawmakers to recognize the urgency of addressing the downside of globalization. As a result, Webb has become known as a proponent of economic populism, a phrase he said should instead be “economic fairness.”
A former Republican and Navy secretary in the Reagan administration, Webb quoted former President Theodore Roosevelt, another Republican who left the party seeking to address the nation’s economic crises through progressive populism. Referring to Roosevelt’s 1903 “Square Deal” speech, Webb agreed with Roosevelt’s succinct summary of his driving philosophy:
The welfare of each of us is fundamentally dependent on the welfare of all of us.
Webb says he already has met with Sens. Byron Dorgan of North Dakota, Jon Tester of Montana, Sherrod Brown of Ohio and Bernie Sanders of Vermont to discuss an agenda of economic fairness, and the group plans to continue working together on such working family issues.
As part of the Agenda for Shared Prosperity, the network of more than 50 economists will release issue papers on topics such as trade, retirement security and job creation to foster discussion and propose solutions.
Two papers were released today—Jacob Hacker’s “Health Care for America” and EPI economist Jeff Faux’s “Globalization That Works for Working Americans.”
Faux’s paper summed up many of the fundamental points of the Agenda for Shared Prosperity, which seeks to counter think tanks such as the Hamilton Project and the Brookings Institution that, according to Faux, assert “the global system of open trade has brought substantial and widespread benefits to the U.S. economy.” As Faux writes:
Most Americans have rejected the radical claim that the elimination of worker, consumer and environmental protections in the U.S. domestic economy would be justified by a promise that an increase in overall economic growth might result. The argument for a global economy without a social contract is essentially that.
Globalization does generate some economic benefits. But they have been routinely exaggerated in an effort to justify rising inequality, job loss and other costs.
The Agenda for Shared prosperity sees the growing gap between pay and productivity growth resulting from “failures of decades of conservative policies,” Mishel said. Until the early 1970s, the two generally grew together. But since that time, the rate of productivity growth has accelerated—but wage growth has not kept pace. Between 1980 and 2005, productivity in the U.S. economy rose 71 percent, while the real compensation (including benefits!) of nonsupervisory workers rose only 4 percent. And nonsupervisory workers make up about 80 percent of U.S. workers.
Factors behind stagnant wages and growing inequality include the steep drop in unionization rates (from 25 percent in the late 1970s to less than 12 percent today) and failure to raise the real value of the minimum wage—let alone raise it in accordance with productivity (its real value has declined by more than 25 percent since the late 1960s). In addition, corporate globalization and offshoring, economic deregulation and the privatization of government services and escalating pay for CEOs have contributed to the growing chasm between real wages and productivity.
An agenda of accelerated globalization and greater national saving, as some urge, will neither bring the growth needed nor reconnect pay and productivity.
Hacker, an economist at Yale, helped write legislation introduced last year in Congress to address the nation’s health care crisis. At today’s gathering, Hacker overviewed his plan for universal coverage—which he also outlined in his 2006 book, The Great Risk Shift—and detailed how the legislation would expand health coverage through Medicare. Key to the plan, Hacker says, is its political viability. In short, the chance for expanding health care coverage through an existing and successful program is far more likely to gain bipartisan congressional support.
In sum, Mishel said:
We need to talk about what is really needed to solve America’s problems—and then build a movement to make that happen.
Following the Nov. 7 election, such a movement now has legs in Congress.
As Webb wrote in The Wall Street Journal:
With this new Congress, and heading into an important presidential election in 2008, American workers have a chance to be heard in ways that have eluded them for more than a decade. Nothing is more important for the health of our society than to grant them the validity of their concerns. And our government leaders have no greater duty than to confront the growing unfairness in this age of globalization.
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