The policies that will deliver economic growth also center fairness, and that's what Democrats need to emphasize to keep the presidency in 2016.
The familiar debate within the Democratic Party – move left or right – is on. In a memo to a “limited number of Democratic leaders,” Third Way, the leading organization for corporate Democrats, lays down the gauntlet: “Democrats are offering economic fairness, but voters want economic growth and prosperity.” And for good measure, Third Way declares, “And it has to be meaningful; Democrats can’t simply stick a 'growth' label on the old bottle of 'fairness' policies.”
The folks at Third Way are right about one thing; voters do want economic growth and prosperity. Where they are wrong is in their assumption that fairness can't be a part of that growth. The policies that do the most to bolster fairness are in fact the most powerful policies to move the economy forward and create broadly shared prosperity.
Progressives and Democrats don’t always make that clear. Most of the time they talk about fairness as separate from broadly-shared prosperity. The Democrat who bases his or her campaign on that crucial link will sweep into the presidency in 2016.
Policies that increase fairness are key to driving the economy forward.
Raising the minimum wage is not just about basic fairness for low-wage workers. Raising wages is about creating economy boosting jobs, not economy busting jobs. When wages are raised, workers have more money to spend, essential when 70 percent of the economy is made up of consumer spending.
An economy boosting job pays enough to cover the basics, which is why the fight for a $15 per hour minimum wage mobilizes people to action. It is about working at that wage for enough hours, with predictable schedules, so that the wages add up to a decent paycheck. It is about getting paid when you are out sick and having paid family leave, so you can care for and support your family. It is about women getting paid as much as men. It is about being able to afford your health care, so you have money to spend on other essentials and don’t end up bankrupt because of a high-cost illness. It is about increasing Social Security benefits and bolstering retirement savings, so you can keep supporting yourself and keep the economy moving well into your retirement.
These measures reward people fairly for work and are essential to rebuilding the middle class engine of the economy, as shown by the evidence collected in the Center for American Progress’s middle-out economics project.
The flip side of creating economy boosting jobs is reversing the soaring concentration of wealth. It’s not just unfair that the rich are grabbing more and more of the wealth we all create, it’s a big reason that the economy remains sluggish. When the top 1 percent capture virtually all of the economic progress, it's impossible for them to spend much of it. When corporations sit on trillions of dollars of cash because there aren’t markets for their goods, that money doesn’t go to higher wages or investment in creating jobs or other things that would boost productivity throughout the economy.
Even Wall Street is beginning to get it. In a report that is stunning only for its source, Standard & Poor's found this summer that “Our review of the data, as well as a wealth of research on this matter, leads us to conclude that the current level of income inequality in the U.S. is dampening GDP growth, at a time when the world's biggest economy is struggling to recover from the Great Recession and the government is in need of funds to support an aging population.”
A big goal of Third Way’s memo is to justify policies that they admit “may not be the most politically popular.” While some of the Third Way proposals are worthwhile, like millions of teachers for pre-K, much of their agenda is that of corporate America and in some cases would actually be bad for the economic growth they claim to seek.
Using coded language in an attempt to dilute the political poison, Third Way pushes for cutting Social Security benefits, lowering corporate tax rates rather than stopping corporate tax evasion, and agreeing to new trade deals which would drive the race to the bottom and allow corporations to challenge environmental and health and safety laws, instead of bolstering American workers' already hard-pressed incomes.
Instead, what the country needs and what Democrats should push are bold policies which drive the economy forward and create broadly shared prosperity: fairness.
We can start by putting Americans to work with a massive investment in core productive infrastructure in three areas: transportation, from roads and bridges to high speed rail; clean, renewable energy, which will simultaneously tackle climate disruption; and high-speed Internet for every home and business in America. Everyone who does this work should be paid enough, with good benefits, to support and care for their families, and be given the flexibility needed to care for those families. In doing so, we doubly boost the economy: through the investment in infrastructure and through the good jobs.
It is both fair and essential for our economic future to ensure that every child has a quality education and the opportunity to succeed in school, career, and life. We need to modernize and replace dilapidated schools and assure that every child has a well-prepared and supported teacher in a small enough class to learn. We need to transform schools, particularly those that teach children in low-income neighborhoods, into community centers. We should make high-quality child care and pre-K universal, employing millions more providers and teachers.
We need to provide career training for the high-skilled jobs that don’t require traditional college. We need to make college affordable, by dramatically lowering the cost of public colleges and universities, providing much more tuition assistance, and tying the payment of student loans to earnings.
And as in infrastructure, all these jobs – from day-care providers to teachers to college professors (no more adjuncts) – should be good jobs, with good pay, benefits, and the flexibility to care and support families.
The only reason that Democrats would consider an agenda that Third Way admits is politically unpopular is to please corporate campaign donors and elites. But with President Obama pushing for new trade deals, advocating revenue-neutral corporate tax reform and having supported cuts in Social Security benefits, that agenda is as alive as the billions in campaign contributions that pour into both political parties.
Americans are right about two things. One, the system is rigged to favor the wealthy and powerful. Two, unless we change course, the future will not be better for our children. Those are the core reasons we saw historically low voter turn out this month and why minimum wage hikes passed at the same time voters decided to give Republicans their turn in the continuing roller-coaster of Congressional control over the past decade.
The Democrat who champions bold policies to build an America that works for all of us, not just the wealthy, and policies that create broadly shared, sustainable prosperity, will triumph in 2016.
The key, as Franklin Delano Roosevelt did (and as great organizers do), is to tap into anger and lift up hope. FDR railed against the “economic royalists” and experimented with bold policies that reigned in financial speculation and put Americans to work building the foundations for the 20th Century economy.
The next FDR will name the villains who are rigging the system: Wall Street speculators and corporations that cut wages and benefits and ship jobs overseas. The next FDR will reveal the truth that “we all do better when we all do better.” That when we all earn enough to care and support our families, when we can shop in our neighborhoods, give our kids a great education, afford our health care, retire with security, we drive the economy forward.
Mamby-pamby won’t cut it. Americans are crying for bold leadership, a way out of a narrowing world towards a better world for our children.
The Democrat who leads a political party that stands up against the rich and powerful and stands up for working families and the middle class, who declares that Americans have done this before and that together we can do it again, will triumph in 2016. A Democratic party that relentlessly presses that agenda into action will meet the great challenge of our time.
Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.