Editor’s note: this is a guest post from Harry J. Holzer, the John LaFarge SJ Professor of Public Policy at Georgetown University. Holzer is a former Chief Economist at the US Department of Labor.
Last month’s victory by Conor Lamb in the special election in Pennsylvania’s 18th congressional district shows that Democrats can win in heavily Republican districts, especially when they emphasize pocketbook issues affecting the working and middle classes, rather than divisive social ones like abortion or gun control.
Yet Democrats still face headwinds in trying to appeal to white working-class voters, especially men in small towns and rural areas. The view that Democrats care a great deal about minorities and the poor, but less about the plight of white workers without college degrees, is quite widely held there.
At the same time, there is no reason why Democrats cannot generate policies to help both white and minority workers without college degrees. Indeed, both groups–and especially the men among them–have suffered declining employment and earnings in recent decades. Both have withdrawn from the labor market in large numbers. Too many from both groups are concentrated in declining towns and rural areas from which economic growth and opportunity have essentially vanished. And both suffer from the scourge of drug dependencies and criminal records.
A sensible Democratic agenda to address such working class problems could benefit the party politically, and–much more importantly–begin to reverse the traumas that have so badly reduced the earnings and incomes of many millions of Americans.
Causes of Low Worker Earnings
What has caused the fortunes of so many non-college education men to deteriorate? As is widely known, the combination of new technologies and globalization have eliminated millions of the jobs, in manufacturing and elsewhere, in which less-educated men traditionally earned strong wages and benefits. And the jobs that remain and pay well–in sectors like health care, construction, transportation and logistics, and even manufacturing–often require the postsecondary education or job training that too many workers lack.
But other forces have also lead to stagnant or declining wages. Weakening unions and outdated minimum wage laws have undercut the pressure on employers to raise wages in a wide range of jobs. To reduce their labor costs, many employers now turn their workers into independent contractors, further reducing any need to invest in their skills or pay them well. And many also force workers to sign “non-compete” agreements, forbidding them to bid up their wages by considering offers from nearby competing firms. Such anti-competitive behavior not only hurts millions of workers with good skills and job performance but also makes labor markets less efficient.
Compounding these problems, as manufacturing jobs have disappeared from states like Ohio, Michigan and Pennsylvania, few others have taken their place. Though many new jobs have been created in large metropolitan areas that had earlier lost manufacturing jobs–like Chicago, Pittsburgh and Cleveland–often driven by growth in world-renowned hospitals and universities, no such drivers of economic development have appeared in smaller cities like Allentown, Youngstown and Flint, or surrounding rural areas. And, while college graduates typically move to booming regions in the country, non-college grads are more likely to remain in depressed regions because of strong family and social ties.
As good jobs have disappeared from these markets, with those remaining often being low-wage service jobs, millions of workers have turned to other sources of income, such as disability programs or informal and sporadic work, paid for in cash. Substance dependency (whether on alcohol, opioids, or other illegal drugs) has soared. And, particularly among black men, sales of drugs have raised incarceration rates dramatically, creating permanent barriers to their employability, even after they leave prison. But many white and Latino men have also been ensnared in the trap of incarceration. Indeed, recent evidence suggests that as many as one-third of all nonworking men at age 30 are or have been incarcerated in the recent past.
At the same time, there is some reason for hope. In the currently tight labor markets of most states, employers have some difficulty filling good-paying jobs in many sectors with skilled workers, and retaining these workers when they are hired. As a result, some are now more willing to invest in worker training than before, and many seem more open to hiring workers–including the long-term jobless or those with criminal records–whom they would normally consider too stigmatized and risky. And wages are finally beginning to rise, though not quickly enough to help most of those who need it.
So Democrats should seize the opportunity now to develop a strong agenda to improve employment and earnings of less-educated workers, both white and minority. Of course, no single policy approach will address all of the problems causing low employment and earnings in these populations. But a strong and coherent package of policies could make a real difference for these workers, and Democrats should now be developing such an agenda.
A Democratic Policy Agenda
Any policy package proposed by Democrats should contain the following elements: 1) Improving worker skills and also the number of good-paying jobs where such skills are rewarded; 2) Rebuilding job markets in distressed towns and rural areas; 3) Addressing barriers to employment, such as opioid dependencies and criminal records, that now limit work for many non-college-educated men; and 4) Making work pay for those who remain unable to improve skill and get better jobs.
Policies to improve worker skills below the BA level have some broad support, though Republicans do not usually want to fund them at the federal level (without offsets from other important priorities). These policies would involve more supports for lower-income (or first-generation) community college students, including adult students who need to work full-time to support families; more aid to the colleges themselves for reforms that raise student completion rates and earnings; and greater affordability, which could be enhanced by expanding loans with income-based repayment, aside from the usual but very expensive calls for free college. Both financial rewards and technical assistance for employers expanding apprenticeships make sense too.
But Democrats should also embrace a broader “good jobs” agenda. Employers who provide “high-road” compensation, with investments in worker skills and productivity, should be publicly favored over those who simply reduce costs by turning workers into contractors, outsourcing their work, and scheduling them erratically. Career pathways, profit-sharing and other ways to enhance worker earnings should be explicit policy goals, with support from “bully pulpits” and a range of policies such as government procurement preferences, tax credits and grants, technical assistance and the like. Support for workers’ right to organize and collectively bargaining would, of course, be part of any such effort. And sensible regulations to limit volatile scheduling, “non-compete” agreements and wage theft are important as well.
Rebuilding distressed areas should be a high priority for Democrats. Grants to support economic development in regions with high pockets of unemployment should provide substantial funding for subsidized jobs and infrastructure projects, including roads and broadband, to link these regions to others nearby that are prospering.
Opioid treatment should be heavily funded and cover both prevention and amelioration. Efforts to reduce the scourge of criminal records in the labor market should include special assistance to link former offenders to employers, provide needed documentation of positive participation in training efforts, and expunge old records for those who have avoided further criminal activity after initial non-violent convictions for drug possession.
Finally, the “make work pay” agenda should include higher minimum wages and an expansion of the Earned Income Tax Credit. The “Fight for 15” should not, however, be a litmus test, as lower-cost states and cities might find it more practical to have somewhat lower floors that do not burden small businesses or reduce their competitiveness.
Indeed, such flexibility for states and localities should apply broadly to the framing of the entire agenda and whatever specific policies are proposed. Broad policy themes are more important to emphasize than the policy details, though some of the latter should be available to back up the former, if and when needed. And the resources needed to fund these priorities could be obtained from rescinding the worst of the tax cuts passed last year, particularly those benefiting only the rich. In more conservative districts or states, the consistency of these recommendations with fiscal modesty and responsibility should be highlighted.
Overall, Democrats can have broad political appeal with sensible policy proposals to improve earnings for a wide swath of Americans left behind by prosperity. There is no reason why the Conor Lamb experience could not be replicated in many other states and congressional districts.
