Democrats Need to Decide If Work Matters

(Bloomberg Opinion) -- The U.S. has an important choice to make. Should work continue to be the fundamental marker of a person’s worth? Or is that idea outdated?

A hundred years ago, when the world was struggling with the social and economic upheaval wrought by the Industrial Revolution, there was little question that human labor was of the utmost importance. The Marxist labor theory of value held that the value of a commodity was based on the amount of work that went into making it. The Soviet Union’s 1936 constitution, quoting the New Testament, declared that "He who does not work, neither shall he eat." Meanwhile, in his speech announcing the New Deal, U.S. President Franklin Delano Roosevelt declared:

What do the people of America want more than anything else? To my mind, they want two things: work, with all the moral and spiritual values that go with it; and with work, a reasonable measure of security.

The New Deal definitely placed work at the center of its program for economic revival. Agencies such as the Works Progress Administration and the Civilian Conservation Corps provided jobs to the unemployed. Social Security, perhaps the New Deal’s most iconic and lasting achievement, pays out its benefits based in large part on how much income someone earned over her lifetime. Later programs added by FDR’s successors — such as Medicare and the Social Security Disability system — often focused on groups of people who had credible reasons for being unable to work, such as old age or disability.

Sometimes conservatives have rolled back progressive policies, portraying them as giveaways to those who didn’t work, as President Ronald Reagan did when using the disparaging term “welfare queens.” When President Bill Clinton signed welfare reform in 1996, the central change was the requirement that recipients of government benefits at least try to get a job. Adding work requirements to government benefits is still a strategy Republicans use to attack the social safety net.

Now, as Democrats gear up to push back on decades of increasing inequality and stagnant incomes, they face the key question of whether to once again put work at the center of social policy, as Roosevelt did.

Some on the left have championed a radical shift in strategy — to have the government value people based not on how hard they work, but on the fact that they simply exist. The centerpiece of the Democrats’ agenda — a system of universal health care they call Medicare for all — would give health insurance equally to every human being, finally scrapping the employer-based system that favors people with jobs.

Meanwhile, lawyer and blogger Matt Bruenig has championed the idea of a universal basic income, which would pay people simply for being Americans (or, potentially, permanent residents). The UBI made it into Representative Alexandria Ocasio-Cortez’s proposal for a Green New Deal, a raft of measures designed to combine economic egalitarianism with environmentalism.

But although Medicare for all has wide support, many on the left are uncomfortable with the idea of UBI. Instead, many have turned to egalitarian proposals that once again center on human labor as the determinant of social worth. One of these ideas is a federal job guarantee, which is also a part of the Green New Deal.

Other Democrats have focused on ideas that affect the pretax distribution of labor income — Senator Elizabeth Warren has proposed giving workers power on corporate boards, while Senator Bernie Sanders has put forward a raft of measures designed to force companies to raise pay. The idea of a national $15 minimum wage is popular on the left, as are policies to strengthen labor unions.

More wonkish center-leftists, meanwhile, have focused on big expansions to the earned income tax credit, a program proven effective in fighting poverty; some proponents now want to expand it to the middle class. Big increases in the EITC, which pays higher benefits to people the more they work, have been proposed by Senator Sherrod Brown and Congressman Ro Khanna; and Senator Kamala Harris’s ideas are very similar.

So although the tension is still muted, there is a clear divide forming between work-based social policies and more universalist arrangements. From an economics standpoint, both approaches have strengths and weaknesses.

Work-based programs like the EITC and job guarantee tend to let old, sick and disabled people fall through the cracks, unless specific provisions are made to provide for these exceptions. Policing the boundaries of who can be expected to work can be a tricky and contentious process. Policies that give higher wages and more power to workers have similar issues.

In addition, there’s a real question of whether a work-based welfare state is simply out of date. Economists aren’t sure yet, but there are some signs that technology is splitting the economy into high-value and low-value occupations. If that’s true, the rationale for making poor people work for a living might be much weaker than in FDR’s time.

But proposals like UBI have their own drawbacks. They tend to be very expensive (health care might be an exception, since Medicare for all would replace the costly private health system). They could potentially give rise to both ennui — as people lose the sense of personal value that work once conveyed — and resentment, as people find reasons to suspect that others aren’t as worthy as they are. Technology may have changed, but human nature probably hasn't.

The choice between work-based ideas and the alternatives won’t be an easy one. But as momentum for egalitarianism builds, sooner or later that choice will have to be confronted.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

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