AMERICA CAN DO better at ensuring economic security, opportunity, and shared prosperity by expanding some of our existing public social programs and adding some new ones, and I expect we will. What will the country look like half a century from now?
A larger share of adults will be in paid employment, though for many the workweek will be shorter and there will be more vacation days and holidays. Nearly all jobs will be in services; only 5 percent or so will be in manufacturing or agriculture. Many more Americans will work in helping-caring services—teaching, advising, instructing, aiding, nursing, curing, monitoring, assisting—and more of these services will be personalized. Quite a few of these jobs will be relatively low paying. Most of us will shift between jobs and even occupations more frequently than today.
Our economy will be more globalized. More of the goods and services we purchase will be produced or performed abroad. More of us will work for firms based in other countries. More US companies will employ workers in other nations or outsource tasks to firms located abroad. We will continue to attract lots of immigrants.1
Access to health insurance, old-age income security, and other types of insurance will no longer be tied to one’s employer. The taxes that fund particular programs will still be levied partly on payroll, as the Social Security and Medicare taxes currently are. And companies will continue to offer particular types of benefits, such as contributions to a private pension plan, in order to attract better employees and keep existing ones. But these will supplement the public insurance programs.
A larger share of our GDP will go to taxes and government expenditures. Yet in another respect, government will be smaller: there will be fewer regulations on firms and individuals. We’ll always need some restrictions to prevent financial excesses, protect worker and consumer safety, safeguard the environment, and more. But we will rely less on specifying what businesses can and can’t do and more on competition coupled with cushions. If we do better at enforcing antitrust rules and scrap or reduce regulations that create barriers to entry, competition will help to align business behavior with the preferences of consumers. Insurance—both compensatory and proactive, both cash payments and services—will cushion those who are victimized by market processes or the vagaries of life.
Government also will be more efficient and effective in its administration. Those who favor expanding public insurance ought to be at the forefront of efforts to improve government’s performance. This is the approach modern social democrats in the Nordic countries tend to take. As a Danish Social Democratic prime minister has put it, “If you have a large public sector, you have an obligation to wake up every morning searching for ways to make it work better.”2 The Clinton administration’s Reinventing Government initiative, headed by Vice President Al Gore, contributed to this process in the United States. The Obama administration has attempted to streamline and improve regulation.3 It also has encouraged stronger accountability standards for public schools and teachers. And the 2010 healthcare reform included steps to increase use of evidence-based treatment in Medicare. Though not always a priority for America’s left, movement in the direction of better government is likely to continue.
Will outcomes improve? Here too I am optimistic, albeit cautiously so. A universal system of good-quality affordable early education beginning at age one will boost opportunity for American kids who grow up in disadvantaged homes and neighborhoods. Other policy shifts will help too: an increase in the Child Tax Credit, less incarceration of young men who commit minor offenses, and affirmative action targeted at the economically disadvantaged.
Shifts in markets and institutions will continue in the direction of less economic security. More of us will work in jobs with low pay, lose a job once or more during our work career, and reach retirement age with insufficient savings and an inadequate 401(k). Families, community organizations, and labor unions may be even weaker than they are now. But if we fill in the gaps in our public safety net—with universal health insurance, less-porous unemployment insurance, wage insurance, a new public defined-contribution pension program with automatic enrollment, sickness insurance, paid parental leave, a minimum wage indexed to prices, better support for making work pay, more robust social assistance, and individualized advising and support throughout the life course—most Americans will be more secure in spite of these shifts.
What of shared prosperity? It’s quite possible that inequality of market incomes will continue to rise in coming decades. More to the point, there is a good chance that wages for Americans in the middle and below will be stagnant, as they have since the 1970s. But if we increase provision of public goods, services, spaces, and free time, living standards will rise even if incomes don’t. And if we restructure the Earned Income Tax Credit in the way I suggest in chapter 3—expand eligibility, boost the benefit level for persons with no children, and index it to average compensation or GDP per capita—we can ensure that the incomes of lower-half households more closely track growth of the economy even in the absence of rising wages.
This America will be a society with greater security and fairness. The economy will be flexible, dynamic, innovative. Employment will be high. Liberty will be abundant. Balancing work and family will be easier. Though we’ll need to pay higher taxes, this sacrifice will be a small one, because we will receive a lot in return.
We’ve come a long way on the road to the good society, but we have many miles yet to travel. Happily, our history and the experiences of other rich nations show us the way forward. The United States is a much better country today than it was a century ago, and a key part of the reason is that government does more to ensure security, opportunity, and shared prosperity now than it did then. In the future it will do more still, and we’ll be the better for it.