Policy Shop: The Most Viable Way to Give a Boost to Low-Income Workers

New post at Policy Shop. Excerpt:

But, as Hacker correctly points out, my view is almost certainly an outlying one. For cultural or other reasons, Americans tend to be more supportive of equality-producing measures that get baked into paychecks than they are of equality-producing measures that go through more overt government channels. As a result, the US has a very stingy welfare state and delivers much of its government spending through opaque, submerged mechanisms like tax credits.

If we are going to live in a society that shies away from after-the-fact redistribution, the only way we can hope to achieve greater economic equality is through the predistributive channel. It is in that context that the recent Demos report Underwriting Bad Jobs is most salient. Authors Amy Traub and Robert Hiltonsmith find that the federal government is, in one form or another, involved in the employment of at least 2 million low-wage workers, a figure that is higher than the number of low-wage workers at Walmart and McDonalds combined. The authors arrive at this figure by adding up the number of low-wage jobs that are funded by federal contracts, federal health care spending, infrastructure spending, and a few other sources.

Read the rest here.

As a postscript, I will say that even though predistributive measures are more politically viable given the state of public opinion, I do doubt how useful they will be going forward. Work is becoming more and more precarious. The days of a lifelong employer who basically functions as a private welfare state for its workforce appear to be on their way out. Predistributive measures are not the ones we will need going forward if this trend continues because they put too much emphasis on the employment relationship. As working becomes more and more precarious, income distribution should become more and more detached from the employment relationship context.