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Retirado do New York Times de 3 de setembro de 2005
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An Economy Raised on Pork
By ROBERT B. REICH
Cambridge, Mass.
THE old work-force compact is in shreds. Paychecks that rose with productivity gains through the middle decades of the 20th century no longer do so. Since the early 1970's, national product per person has grown more than 75 percent, but the median wage of male workers has risen barely two cents, adjusted for inflation, from $15.24 in 1973 to just $15.26 last year. Family incomes are up only because wives have gone into paid work and everyone's putting in more hours. Job loss often means loss of health insurance and a tax-advantaged pension.
Oil shocks, hurricanes and housing bubbles aside, consumers who are worried about their jobs and wages will be reluctant to buy goods and services, thereby dampening any recovery. But the new insecurity is undermining our national interest in other, less predictable ways by setting off political resistance to economic change, with negative repercussions that ripple beyond the economy.
Forty years ago, free-trade agreements passed Congress with broad backing because legislators recognized that they helped American consumers and promoted global stability. But as job and wage insecurity have grown, public support for free trade has declined. The North American Free Trade Agreement, which passed by 34 votes in 1993, was a hard sale for the Clinton administration. But the recent Central American Free Trade Agreement, embracing a far smaller and less populous area, was an even harder sale for President Bush. Despite Republican control of Congress, the trade deal cleared the House in July by just two votes, and then only after heavy White House pressure.
The increasing insecurity of ordinary workers also imperils our national defense by handcuffing the Pentagon. It can't shift the defense budget to fighting terrorism because of local fears that well-paying jobs will be lost. Contrast this with the comparative ease by which the Pentagon downshifted from fighting World War II to the cold war, more than 50 years ago. Its recent base-closing recommendations ignited a political firestorm, causing even the apolitical Base Closure and Realignment Commission to retreat. The commission's chairman justified its decision to save the Niagara Falls Air Reserve Station, for example, by noting that the base "is the second-largest employer in western New York."
Consider, finally, the pork that's been larded into the federal budget. Republicans may collectively oppose wasteful spending, but as individual legislators they've created more pork than any Congress in history. The new $286 billion transportation act is bloated with 6,371 "special projects" with a price tag some $30 billion more than the White House wanted. The president reassured the nation that it would, at the least, "give hundreds of thousands of Americans good-paying jobs." The new $12.3 billion energy bill cost twice what the White House sought because it's laden with what Senator Pete Domenici, the New Mexico Republican who ushered it through Congress, defends as measures to create "hundreds of thousands of jobs." According to the conservative watchdog group Citizens Against Government Waste, pork programs have risen from fewer than 2,000 a year in the mid-1990's to almost 14,000 this year.
Don't blame the politicians, though. Whatever the policy at stake - trade, defense, transportation, energy - it's likely to morph into a jobs issue because that's what's most on people's minds. So politicians concerned about re-election will do what they can to protect jobs against free trade, base closings, or whatever else might threaten them; and to create jobs by getting as much pork as possible.
And don't blame corporate chief executives for causing the insecurity in the first place. Their predecessors reigned over a stable mass-production system where a few major companies in each industry grew through economies of scale and didn't have to compete very hard. Wage and benefit increases could be easily absorbed or passed on to their consumers, and jobs preserved. But today's profits depend on innovation and low costs. As a result, corporations are doing everything they can to cut hourly payrolls and benefits.
But if the insecurity keeps growing, and government keeps responding to it by trying to preserve jobs and spend pork, the economy will sink of its own dead weight. Future free-trade agreements will be impossible to pull off. The Pentagon and other agencies will be hamstrung. And our fiscal imbalances will swell to more grotesque levels. Yet what's the alternative? There's no returning to the stable jobs and steady wages of the mid-20th century.
The answer is a new compact that gives Americans enough security to accept economic change. Suppose, for example, lower and moderate-income workers got a larger share of today's productivity gains through a much bigger Earned Income Tax Credit starting at, say, $6,000 for those who earned the least and gradually tapering off well into the middle class. This would go a long way toward easing the pocketbook concerns of Americans who are working harder but getting nowhere.
To cushion the pain of job loss, unemployment insurance should be turned into re-employment insurance, helping people to get new jobs instead of keeping them waiting for old ones to return. Community colleges would do the retraining, in league with area businesses that identified skill shortages. Wage insurance would cover part of the difference between their old salary and their new starting wage.
The new compact would also decouple health and pension benefits from unemployment, further reducing the negative impact of job loss. Employer-provided health insurance would be replaced with no-frills universal health under an expanded Medicare program, which could use its huge bargaining leverage to extract lower costs from providers and drug companies. Lower-income workers would be encouraged to save for their retirement (over and above Social Security) by receiving several dollars from the government for every dollar they put away.
The price tag for the new compact won't be cheap. My back-of-the-envelope calculation is several hundred billion dollars a year. But given the high cost of our current doomed effort to turn back the global economic tides, it would more than pay for itself. By reducing the job insecurity felt by so many, a new compact would allow Americans to focus on embracing change instead of worrying about forever falling behind.
Robert B. Reich, a professor of social and economic policy at Brandeis University, was the secretary of labor from 1993 to 1997.