By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
So why is there a near consensus among Democrats for such neo-Hooverian hoarding? There is, after all, a clear progressive alternative: Raise the "cap" on the Social Security payroll tax (which currently is levied only on the first $68,400 of annual income) to save the system, and use some of that surplus for social needs that won't be met no matter how much capital is out there to invest.
For the answer, we must go back a couple of months to a closed-door meeting of the leading congressional liberals -- House Democratic leaders Richard Gephardt and David Bonior, prominent senators such as Ted Kennedy and Christopher Dodd -- with one of Washington's most respected (and liberal) pollsters. The question before them was whether there was a way they could sell raising the cap to the American voter. The pollster had phrased and rephrased the question, massaged all the numbers, and come up with a simple answer: No.
"Look, the best idea is to raise the cap," says one leading policy maven who attended the meeting, "but they wouldn't go for it. So the second best idea is the Clinton plan -- because it keeps the Republicans from enacting a catastrophic tax cut."
Such is life in the congressional minority.
III. A NEW MOVEMENT FOR A NEW ECONOMY (THE REAL ONE)
BUT WHILE LIBERALS HAVE BEEN ENDEAVORING, NOT always successfully, to fend off the Republicans on Capitol Hill, while they've been losing battles on affirmative action in California and control of statehouses and city halls all across the nation, they have also been engaged, often far from the public spotlight, in retooling their beliefs and their movements for a new progressive resurgence. More concretely, they've been reinventing liberalism for the decidedly, up to now, illiberal "New Economy" -- the global, postindustrial, skill-intensive, no-job-security, high-tech, high-flex, whiz-bang economic order celebrated by Democratic centrists. Adhering loosely to the notion of the "third way" -- a not-quite-doctrine that positions itself between the pure market mania of Reagan and Thatcher and the classic welfare-state politics of, say, American unions and European social democrats -- the centrist "New Democrats" argue that technological innovation and globalization have rendered the left's traditional concern for income maintenance and more equitable income distribution impossible to sustain. "What you earn," a prominent third-wayer named Clinton has said repeatedly, "depends on what you learn." The chief role of the state is to provide you with the "tools" to navigate the New Economy's choppy but exhilarating waters. After that, bub, you're on your own.
There's a problem with the picture of the New Economy that is painted by its celebrants, however: It's just one piece of a larger canvas. They are certainly right, for instance, that in an open global economy, high-wage manufacturing jobs belong on an endangered-species list. They blind their eyes, however, to the actual jobs that take the place of the decent-paying assembly-line gigs in aerospace and auto. In the one advanced economy most open to the forces of globalization -- ours -- the result has been the creation of more high-end jobs, to be sure, and vastly more low-end ones. In the shift to a largely service-sector economy, we create many more salesclerks, couriers, waiters and hospital attendants than we do investment bankers or computer designers. In the one American metropolis most open to the forces of globalization -- ours -- a look at the figures on income distribution should sober even a New Economy cheerleader. In 1996, as a study from Assembly Member Wally Knox documented, 41 percent of the residents of L.A. County lived in households whose annual income was below $20,000, and fully two-thirds in households with annual incomes below $40,000. Only 26 percent were in middle-income households making between $40,000 and $100,000, with 8 percent in households making over $100,000.
So much for the middle-class majority. And while Los Angeles, port of entry for so many immigrants, is at one extreme of American income distribution, America is steadily becoming more like L.A. as the middle-income blue-collar job drifts off into history.
In short, America has a new kind of structural poverty: the poverty of the employed. It is not cyclical, it is not a function of regional underdevelopment or individual pathology -- though all those kinds of poverty continue to exist and intermingle. It is poverty that results from the normal workings of the New Economy, even in boom times. It is the poverty of the excluded middle, in which the gap between rich and poor relentlessly widens.
It is on this issue, above all others, that American liberalism is reinventing itself. The spread of low-wage work, of poverty-wage jobs in particular, is clearly the occasion for a decisive shift in liberal doctrine, for the creation of new movements and the renewal of old ones that address these issues.
ANYONE TRYING TO FIND A STARTING POINT FOR THE new liberalism might want to go back to the spring day in 1995 when John Sweeney declared his candidacy for the presidency of the AFL-CIO. The mission of the labor movement, he averred, would henceforth be to address those income inequities, to organize, for the first time in half a century, the working poor. His campaign slogan, he continued, was "America needs a raise."