Yesterday, Kevin Drum expressed some astonishment that Gallup polling shows that Americans are simultaneously satisfied with how their personal lives are going and deeply dissatisfied with their country. One of our feature articles may hold a partial explanation for this paradox. Steven Hill, a senior fellow with the New America Foundation, explains:
The safety net for American workers and their families, which in the post-World War II era has been a cornerstone of the middle class, is under assault. Though the economy is growing, for most Americans it feels more like a recession than a boom. That’s because the U.S. workforce, which historically has been one of the most productive and wealthiest in the world, is undergoing an alarming transformation. Increasing numbers of jobs, even full-time ones, lack safety net protections or a sense of security, and increasing numbers of workers find themselves on shaky ground, turned into freelancers, temps, contractors, gig workers, and part-timers.
You can be fully employed and doing quite well and still not have a sense of basic security. Objectively, you can’t complain, but deeper down something is gnawing at you. Things are not as they should be. Being an “independent contractor” or a “temporary worker” is not the same as being a full-time employee with good benefits.
Here is how Hill defines the challenge for policymakers.
The challenge really needs to be reimagined as one over how to stabilize the economy and reestablish economic security for the broad swath of American workers. One important way would be to figure out how to provide the support structures that workers and families need in order to feel a measure of protection and reassurance, regardless of their employment situation or job classification. In a time of stagnant wages and unyielding economic inequality, how do we ensure that millions of American workers have access to a safety net?
Fortunately, we already have a working model that can be adapted. As former Treasury Secretary Larry Summers and others have said, the key is portability: the personal support infrastructure for workers and families must be designed so that the safety net follows the worker from job to job and employer to employer.
Hill then explores one possible solution, which would be the creation of Individual Security Accounts (ISAs). Here’s a taste of how these accounts might work:
When Nissan, Microsoft, Uber, TaskRabbit, Upwork, or Merck hires any kind of worker, whether regularly employed or a contractor, freelancer, or temp, they would contribute a few dollars more per hour in addition to the wage. Those funds would be placed in an individual security account (ISA) for each worker’s safety net. The amount any business contributes into the ISA would be pro-rated according to the number of hours the worker is employed by that business (if wages are not based per hour but on completion of a job, such as for certain types of freelancers, or on miles driven, like for an Uber driver, the company would chip in a percentage of the gross wages).
These accounts would be structured to pay automatically, via payroll deductions, into existing state and federal safety net programs—Social Security, Medicare, unemployment insurance, and injured workers’ compensation—as well for other safety net components, such as health care and paid sick days and vacations. Workers with multiple employers would earn contributions from each employer, pro-rated to the number of hours worked or a percentage of gross wages, which would accumulate in the ISA (the worker also would have some wages deducted for their safety net, much like regularly employed W-2 workers do now). The ISAs could be overseen by the government (much like a Social Security account) or by private entities (like insurance companies, unions, or agencies specializing in centralized benefit administration), and tracked with a personal ID number.
It’s a bold proposal for a new economy and workers who need a new deal. Make sure you read the whole thing, and then come back and let me know what you think?
If we do a better job of creating economic security for folks, do you think they’ll be a little less anxious, dissatisfied, and pissed off?