People derive more happiness from meaningful, productive work, according to Cass, than from their spouses or their children. Where productive work exists, families and communities thrive. Kids raised in these communities, including those in the bottom 20% of US households, have as good a chance as any others to move up the socioeconomic ladder. Even middle-class kids in two-parent homes experience impaired social mobility if they live in a community with large numbers of single-parent households.
Having good jobs for all doesn’t mean that everyone gets rich, but, Cass says, even menial work has value when it supports a family and improves a community. Such work replaces idleness and promotes the formation and sustainability of two-parent families.
Why “Making Things” Matters
Higher productivity – plus greater output – translates to better living standards. Manufacturing, or making things, is important to communities and nations. The health care and personal services industries create jobs, but, Cass notes, everyone can’t do each other’s laundry. Communities and nations need tangible things to trade, including exportable goods. Otherwise the United States’ trading partners will use their gains to purchase the nation’s debt, which imperils everyone’s future.
Cass believes that nations emphasize GDP more than they should; GDP measures only economic activity and does a poor job of it. Working in your home and raising a family doesn’t count in tallying your country’s GDP.
On the other hand, the author says, productive pluralism, which emphasizes good jobs for all, generates the crucial components of sustained productivity, life satisfaction and economic growth. To accomplish productive pluralism, Cass maintains that governments must change how they leverage five critical policy instruments:
- “Demand” – Through tax breaks, incentives and regulations, government influences which industries grow sufficiently to create jobs, demand and innovation, and which don’t.
- “Supply” – Government and educators influence the supply of talent by funding and emphasizing certain public education policies.
- “Boundaries” – Through immigration and trade policies, governments influence their nation’s labor supply – especially in the lower-skilled market – and affect the viability of producing goods domestically.
- “Transactions” – Governments make and impose rules governing the employee-employer relationship through labor laws, minimum wages and contract law.
- “Taxes” – Governments levy employer and employee taxes. They offer tax relief, subsidies, and other tools to reward some behaviors while discouraging others.
Cass fervently believes that the United States has made mostly disadvantageous choices in each of those categories.
Needed Policy Changes
To promote productive pluralism, Cass cites several important areas in which he believes American policies must change:
- Environmental rules and regulations – Cass believes that each new or more restrictive environmental law costs industry significant sums in terms of compliance, which depresses wages, restricts investments and costs jobs.While environmental improvements and public health improved markedly following the Clean Air Act of 1970, government hasn’t put a stop to incremental regulation nor defined what constitutes “clean enough.” With American air quality already exceeding Europe’s and on a par with Iceland’s and New Zealand’s, Cass thinks further proposed restrictions should consider what happens to the health and welfare of workers and communities if factories have to close. Regulation should balance local economic, community and job needs against broader environmental concerns. Governments should streamline rules requiring environmental impact statements, which now take, on average, five years to resolve.
- Workforce education and skills retraining– Federal retraining programs spend multiple billions of dollars each year to accelerate displaced workers’ return to well-paid jobs. Cass says flatly that these programs don’t work. American worker retraining efforts fail because they guess at what skills employers need without asking them directly. In cooperation with employers, government should provide federal funds to pay for specifically needed training. European-style apprenticeship programs work well, for example, because they involve the employer, the trainee and the government.
- Public education policy– Despite a four-decade effort to push every student through college, Cass maintains, fewer than half manage to obtain even a community college diploma. When government spends resources on college-track students, he says, it fails the majority of high school students who won’t complete college. High school students should be able to chose either a trade or a college track. Some students might select a vocational track in 10th grade, for example, so they can serve apprenticeships and earn wages before they graduate. Students could always switch from one track to the other.
- Employment laws and regulations– Cass argues that employment taxes, laws and safety regulations burden employers with higher costs and leave workers with smaller paychecks. He urges governments to strive for the proper balance, and asks if employers and employees should negotiate their own deals without government involvement. Individual employees lack leverage, but collectively, they wield enormous power. And, Cass says, current union dynamics don’t address workers’ needs. Fewer employees join unions today, in part, according to the author, because American unions adopt an adversarial attitude toward employers. A European solution – the use of “co-ops” – could replace government regulation by allowing employees to negotiate with their employers collectively and collaboratively to establish agreements and rules. Workers might agree not to charge overtime, for example, in return for flexible work weeks. For co-ops to emerge in the United States, however, the National Labor Relations Act must first permit them.
- Immigration– When people criticize globalization, they usually mean immigrants and foreign-made goods. Highly-skilled immigrants tend to increase the demand for low-skilled work and improve economic conditions overall; lower-skilled immigrants add to the labor supply, which reduces blue-collar wages in the receiving country or region. When immigration rules tighten, Cass maintains, employers have fewer low-skilled workers from which to choose, resulting in higher pay for native workers. Policy should exclude immigrants without four-year college degrees, but also should give current, illegal immigrants work permits of a duration that matches their time in the United States. Cass suggests that anyone living in America for 10 or more years should have a path to citizenship.
- Trade– Imbalanced trade and current policies put domestic producers at a disadvantage. The United States runs enormous annual trade deficits. These may make consumers happy, but deficits, Cass asserts, undermine domestic manufacturing and its jobs. By contrast, Chinese trade policy aggressively pushes exports while restricting imports and stealing intellectual property (IP). Cass believes that America should not make trade agreements that favor cheap goods over good jobs. Instead, it should deny nations any access to its world-class higher education, to certain technologies and to life-saving drugs to nations that compete unfairly and any who steal IP. The United States should prohibit or tax foreign purchases of domestic real estate companies, Cass maintains, as well as other assets so foreign nationals and governments have to spend their hoarded US dollars on US goods and services.
- Job creation– American states spend billions in enticements and tax relief to lure businesses to create good jobs. Cass believes this generates counterproductive interstate competition and results in unfairness to existing businesses. Instead, firms should pay workers a “wage subsidy” directly, to allow them to accept lower wages while knowing the government will make up the difference. This would be hard to game, but easier to administer; it would sustain an efficient transfer of the gains made by globalization’s benefactors to its losers. Cass is repeatedly adamant that wage subsidies would support workers who work instead of those who don’t.
- Wealth distribution– Government spends $150 billion each year subsidizing low-income workers and their employers and $1 trillion overall in wealth-transfer programs. Cass asserts that much of this directly discourages work. Government assistance to low-income households reduces the motivation to work and the meaning of any work people may do. For anyone capable of work, he contends, assistance harms more than it helps. On the other hand, government assistance for the old, disabled or temporarily unemployed, makes sense. Governments must strike the right balance to encourage work and yet protect those incapable of work.
Programs tailored to each person’s or each family’s needs might supply temporary subsidized day care in some cases, initial help with the rent in other cases and free transportation in still others. Cass warns that a permanent, national, subsidized day care program for everyone might absorb all available resources while helping only certain low-income workers’ families. Targeted assistance offered for as long as needed helps more people and costs less. Today’s programs tend to remove assistance as recipients’ incomes rise – and at such a steep rate that they discourage work and self-sufficiency. Cass thinks this problem, and ever-expanding entitlement programs in general, places idle workers so close to a middle-class lifestyle that it causes working people to question why they work. He argues that these programs fail to reduce the poverty rate.
A New Work Mind-Set
All these policies carry a consistent theme: productive pluralism and good jobs for all who want them. Even with these policies in place, Cass contends that a crucial change must occur in culture and attitude. Work that supports a person’s family and community should bring social approval. Idleness, Cass believes, should bring shame. To get people working again, they must value work. Pride and respect must accrue to all work. American culture must return to valuing independence, work and self-sufficiency. This requires people to speak up – much as they’ve done to make drunk driving culturally unacceptable – in praise of workers and in disapproval of idlers. Governments must signal the importance of work by shifting policy to favor it. Cass strenuously asserts that policy makers should stop talking about a “universal basic income” (UBI), since, he feels, such policies can only reduce people’s commitment to work, self-reliance, community and nation, while turning the United States into a nation of “trust-fund babies.”
The current one-size-fits-all, consumer-focused policy agenda doesn’t work and never will, Cass maintains. The rise of populism and identity politics isn’t a battle against immigration, taxes, help for the poor or free trade. It reflects people’s innate need to occupy a respectable place in society – something that productive pluralism can deliver.
Ideology Detached From Reality
Cass is a fervent conservative ideologue. So it’s not surprising that many of his arguments – such as opposing both universal day care and universal basic income – hew to the conservative line. Unfortunately for Cass, his strident positions against these policies, however likely or unlikely they are to see implementation, renders many of his other positions irrelevant. In opposing these policies and supporting others, he seems to be describing a pre-1990s economy in which the poor could pull themselves up by their bootstraps if only they worked hard enough. In exhorting the poor to get to work, Cass willfully ignores that the jobs that once raised up the poor up no longer exist – they’ve gone overseas or been automated out of existence. While many of his arguments are thought provoking and well stated, Cass’s decision to write in denial of such a tough facet of today’s economic life echoes a stubborn grandpa at the dinner table arguing in favor of a better but bygone era.