Investing in physical infrastructure is not enough if an opportunity to build real "social infrastructure" in the country is squandered
Imagine a place where doctors still do
house calls. Or where childcare is affordable, professional and widely
available. Or where all new parents are paid to stay home and care for their
newborns, and receive a monthly stipend to pay for diapers, food and other
daily needs.
Or imagine a place where a young person doesn't have to mortgage her or his
future by going in debt to pay for a college education. Or where everyone has
quality, affordable health care, and all workers receive two months worth of
paid vacation and holidays every year, and paid sick leave too, as well as a
generous retirement.
To most Americans, such a place sounds like Never-Never land. But to most
Europeans, Canadians and the Japanese, this sounds like standard operating
procedure. It is important for Americans to keep this in mind as we listen to
President Barack Obama announce the goals of his new administration.
For example, in announcing his economic stimulus plan, Obama unveiled some
badly needed measures, including rebuilding of roads, bridges and schools and
increased renewable energy production. But his American
Recovery and Reinvestment Plan misses an opportunity to more directly
invest in the greatest "infrastructure" of all - the American people.
Public investment in physical infrastructure as a way of creating jobs and
boosting consumer spending is a sensible strategy. However, it leaves American
workers stranded by the same "ownership society"
ideology that has been part of the problem. The fact is that the next
economic recovery will be followed at some point by the next downturn. Without
a different type of intervention, Americans will remain lacking in the type of
institutional support and "social infrastructure" that is crucial for
providing economic security in this uncertain age of global capitalism.
A more comprehensive solution has been crafted in many European countries, Japan and Canada. In these nations, a small
amount of each employee's and business' income is redirected into a pool of funding to pay for universal
social infrastructure like affordable childcare, paid parental leave, paid sick
leave, free or nearly free-higher education, affordable health care, job
training programs, adequate vacation, sufficient retirement pensions and more.
Providing such benefits to all residents lays a much stronger foundation for
the middle classes in these countries than anything comparable in the United States.
For example, the US is one
of only five countries that do not guarantee some form of paid maternity leave
(the others being a few impoverished African nations and Papua New Guinea). Fathers are
granted paid leave in 65 countries, but the US guarantees fathers - as well as
mothers - nothing. A majority of Americans are not even eligible for unpaid
parental leave.
The US
is also one of only a handful of nations that have no national law guaranteeing
paid sick leave, leaving some 46 million workers - 43 percent of the private
industry labour force - without paid sick days. At least 145 nations provide
paid sick days, since if you're sick, it's preferable to stay home and take
care of yourself. In the US,
the ill are forced to show up to work and infect their co-workers.
American detractors have decried this European, Canadian and Japanese way as that
of a "welfare" state and "creeping socialism", but nothing
could be further from the truth. A better name for this system is a "workfare"
state, since all of these supports are part of a comprehensive system of
institutions geared toward keeping individuals and families healthy, productive
and working. By building a safety net beneath their workers, those countries
that have embraced certain social democratic reforms have put some meat on the
bones of "family values".
But in America's
"ownership society", you are truly left "on your own". In
theory, this should lead to Americans paying less in taxes and having greater
discretionary income, but this has been mostly an illusion. In return for their
taxes, people in these other countries are receiving a whole host of benefits
and services for which Americans end up paying extra for, out-of-pocket, via
fees, premiums, deductibles and tuition, in addition to their taxes. When you sum up the total balance sheet, you discover that many
Americans are paying out just as much as their counterparts in other nations,
but receive a lot less for their money.
Properly understood, these workfare supports are a necessary part of
infrastructure investment, just like the maintenance of physical infrastructure
such as bridges and roads or spending on energy efficiency. This social
infrastructure investment also creates jobs and stimulates consumer spending,
even as it invests in the most precious resource of all - people.
By narrowly emphasising investment in physical infrastructure in his economic
recovery plan, Obama fails to recognise how social infrastructure must be a
crucial part of the mix. A failure to invest in social infrastructure during
this critical time will leave the American middle class on the same shaky
ground where it has always stood, vulnerable to the current as well as future
economic downturns.
Steven Hill is director of the Political Reform Program for the New America Foundation. His book "Europe Rising" will be published by the University of California Press in 2009
