A Hinge of History by George P. Shultz;James Timbie;

Author:George P. Shultz;James Timbie;
Language: eng
Format: epub
Tags: Technology, demographics, governance, migration, immigration, education, national security, hinge, leadership, trade, manufacturing, productivity, China, Russia, artificial intelligence, workforce, climate, nuclear weapons, international relations
Publisher: Independent Publishers Group
Published: 2020-11-02T00:00:00+00:00

Encourage Work

The first policy principle to keep in mind in a changing America is to encourage work. Work is the only reliable path to prosperity. The US poverty rate—defined as an income less than three times what a family needs to buy food—is now just above 12 percent. But poverty in America is dynamic. According to statistics compiled by the Urban Institute in Washington, DC, the “average” American has about a one-in-twenty chance of falling into poverty in any single year, and just over half of Americans experience poverty at some point before they reach retirement age.24 About half the time this poverty is caused by someone in the family losing a job. But it is also generally short-lived; about half of those who enter poverty exit it within one year, and three-quarters exit poverty within five years. And most of the time that exit is due to a family member’s getting a raise or a new job. Some members of society face severe challenges that effectively prevent them from leading a prosperous life. But they are a small minority. In general, we should think of being poor as a symptom—not as membership in a class—and the diagnosis is generally one of being out of work.

Apart from prosperity, work also provides personal meaning. Psychological studies since the 1970s have shown the importance of structure in modern human happiness. And for most people, that structure comes from their job. Even controlling for loss of income, joblessness in this country and elsewhere around the world has been correlated with lower reported rates of well-being, along with depression, the loss of a sense of social belonging and motivation, and even physical health challenges. These feelings in turn result in the use of destructive coping mechanisms, such as substance abuse and family tensions. In short, we should want people to be working, even if they do not need the money.

In that sense, a safety “net” may be a misnomer. In our emerging new work environment, we may expect people to first experience layoffs at a younger age than is typical today. Capable, trained, and educated people may experience multiple layoffs or buyouts throughout their career. Job security will vary based upon the tasks one performs, and in nonobvious ways across sectors, so a broader swath of professionals may see themselves receiving pink slips. The flip side of this, of course, is that in increasingly dynamic sectors subject to reorganization and reinvestment, workers themselves may choose to jump ship more frequently for higher wages or more desirable opportunities in other roles or firms. And Americans will work longer as they live longer. In short, job disruptions of this sort may become normalized, expected even. Ideally, with the right individual responses, they could even come to be seen as positive, given that they force the issue of improving both overall and (hopefully) individual productivity.

Because of this, we should not think of US welfare programs as catching people as they fall and holding them there, just above the abyss.

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