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
Comments
First I would like to stress that I agree, in principle and broad perspective, with Mr. Hill's suggestions. However, he paints a very rosy picture of his comparison countries without explaining any of the downsides. As a Canadian, I can tell you that I have no expectation whatsoever of seeing my "generous retirement" because our once-proud funding pool is leaking like a sieve in the face of an aging population - which America also faces. Our schools aren't better than American schools. Our doctors haven't made house calls for decades. Our public health care system is at risk of collapse for lack of available doctors - who make more money by getting their subsidized education here and then moving to the US to practice. Public health care has failed to the extent that privatization (semi- or full)has been at the forefront of national discussion for years.
I had to chuckle at the phrase "a small amount of each employee's income". In total, our taxes to pay for these social systems run over 40% of earnings for entry-level middle classes, and close to 60% for high earners. Think of what that means in dollars and ask yourselves if you couldn't get the same services cheaper in a free market.
So Americans, I beg you - don't kid yourselves by looking at social programs through rose-coloured classes. They're expensive and extremely prone to getting fat and over-regulated.
All that said, there remains no question that Canada is an excellent country to live in, and far beyond the US in terms of social programs and personal liberty. Just be aware that we have our problems too.
Article fails to notice that in the UK, none of these social security features, including even the pensions of state employees is FUNDED, they are all paid out of current taxation and so vulnerable to downturns such as the current one.
If funded, they would be protected against the vagaries of state power as well as financial crises.
It is too early to say that Obama has ignored the social infrastructure.
As far as I understand, the main goal of Obama's plan is economic recovery. If you put money in the infrastructure, those money go directly into the "live" economy, and through many companies who will grow and invest and hire.
If the money would go directly to the population (like in the bush stimulus package) they would pretty much stop there. Not hiring, no investing. Yes, there are positive effects, but they are _very_ long term, and his solution is probably the best for medium term, which is where the problem is.
Of course there are problems with the welfare systems of countries like Canada and the UK (I speak as a citizen of both). Nevertheless, Stephen Hill's article is essentially correct. Unlike the US, everyone in Europe and Canada has access to good health care; and social benefits such as sick leave and maternity leave are considered to be essential elements of a modern,civilized society.
Unfortunately, what we are now battling against - at least in the UK - is a political leadership smitten with privatization and a desire to emulate the expensive, morally bankrupt, deeply inegalitarian US system. The price of civilization - like that of liberty - is eternal vigilance.
jf
It is 40 years after the Moon landing and our economists have not been telling the American people how much they have lost on the depreciation of automobiles since then. There have been 200,000,000+ automobiles in the United States since 1995. That is more cars than there were Americans in the 1930s. If each car lost $1,500 per year that would be $300,000,000,000. Since 1995 that would amount to FOUR TRILLION DOLLARS.
Is that what the US fought the Vietnam War for?
Economists that can't do ALGEBRA.
When is Obama going to make accounting mandatory in our high schools?
GlobaLIES
A very valid observation. I do hope authorities the world over, and not only in the US, take due note of this.
As an American, I am not bought on the recommended stimulus plan. However, there are some points that I would like to point out.
Universal social infrastructure in America needs to be revamped in some aspects, but others are just fine the way they are.
Education in America is extremely expensive, including primary schools. I would think that the government would develop a plan that could mirror the same education plan as Canadians and Europeans to an extent. I believe this would provide those that need the assistance to educate themselves are available to it. I understand that most believe the government should front the money, but why front the money when people are not utilizing it properly? There are non-profit groups that assist in education but not all take advantage of it.
Depending on the employer one works for, job-training classes, maternity, sick leave, adequate vacation and sufficient retirement plans are in place by the individual company; not government funded.
There are some that refuse to better themselves while they are collecting welfare checks from the government as they fear they cannot make more than their welfare checks.
While we do have a social security plan, like most have stated, it is slowly dwindling down as the baby boomer age starts to retire. That makes it harder for those like me who are still young wondering why we still have to pay into it if we are not going to have it available when we hit retirement age.
America needs more to understand individual and personal responsibility. The issues we have are growing from greedy people who think they deserve more than they earn. We had people buy houses at outrageous prices, knowing they could not afford them. This is one underlying factor of the sub-prime mortgage collapse which sent our country in a downward spiral. This could have been prevented if people just used common sense approach and some personal responsibility of their own finances as well as the companies willing to say no instead of being greedy about business and saying yes.
A stimulus plan will only work if the root of the problem is fixed. In its current state, the stimulus plan is just a band-aid not medicine to fix the problem. One would wonder how America’s government cannot see this.
There are so many people criticizing the U.S. president for making an effort to fix the issues at hand in a frivolous plan, but none have yet to submit a plan of action themselves. I would suggest that the root of the problem be addressed and a plan of action from that in a grass-roots effort to stimulate the economy. This would not only address the issues that started the downfall, but would assist the government in building an effective plan that could last for decades.
I just do not understand this president. Before he was president, he wanted to slow Bush's bill to help support the crumbling economy, and now he is trying to force his own economic plans through even faster. What happened to him wanting to take the time and ensure that proper over sight and all that stuff is in place. And I love how after the first bail out was passed, Obama stated that all the over sight he wanted was put in place and we all now how that first bail out went. No one kept those banks in check and it was a waist. What we need to do is invest back into making things here instead of buying everything. What happened to the great American work ethic? We have become a fat lazy spoiled child and this economic down turn is our spanking. I was reading articles at www.americanboom.com about how if we had supported our products made here then we would not be in much of this mess. People would still have jobs that are now in India. Yes things do cost a little more if they are made here, but think of it as supporting the home team. Most of us do not seem to mind paying $8.00 for a hot dog at the ball park, even though you can get probably a better one down the street at Wal-Mart. So support the American home team a little more now and I believe it will help us all in the future.
Is waist a freudian slip, is slip a petticoat or a landslide fall from grace now that celebrity status has introduced newly converted celebrity property developing hotdog catholic blair witches to democratic america with GB in tow, no not him, I mean great britain, poor sacrificial lamb - so much for kenya ousting the bullies, so much for russia being anything other than bully, so much for standards. Even the last nazi war criminal cast into fiction since the real bread and butter is province of the entertainment industry, well get what I think then, that Obama and Iran are going to blast us out of the water after a disastrous olympics in 2012 - so the rest of you can go on living. Send me a ticket out of here will you and please don't vote PC for King, some of us loved Diana.
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