In the latest “believe it or not” moment, farmers are experimenting with collars for cows equipped with GPS and electronic signaling that would eliminate the need for fencing and herding. American farmers spent $300 million last year on fencing. To policymakers concerned about the creation of jobs, did anyone see farm fencing falling to the veracious appetite of disruption?
Every day there is more evidence that America is hurtling from an industrial to a digital age. The private sector is adjusting to this shift. They are making adjustments, changing business models, finding new markets, or failing. Washington, however, seems left in the 20th century.
The Republican Party, led by Donald Trump, is unabashedly lurching backwards. The tax bill was straight out of the supply side 1980s. The steel tariffs are from the Smoot-Hawley 1930s. Democrats are, understandably, mostly in opposition mode. But the world is relentlessly moving forward.
This gives Democrats a once-in-a-generation opportunity to seize the moment and become the party that prepares Americans to earn a good life in an economic future that is equal parts exciting and terrifying. How people fare will largely depend on the choices of policymakers.
Let’s begin with the positives about the economy: we’ve added nearly 40 million jobs since the introduction of Microsoft Windows in 1993. Despite farms without fences, cars without drivers, newspapers without paper, and stores without storefronts — the American economy is still creating nearly 200,000 jobs per month. Work is not going to end.
But those jobs have radically changed, opportunity has become concentrated, and people feel less economically secure. If you want to know the root cause of the ugly politics churning through America and Europe, it is the belief that many will be (or already have been) left behind.
That’s where policymakers have to step in. Between 2005 and 2015, the U.S. added 150,000 net new businesses. But Third Way recently found that over those same 10 years, two-out-of-three counties in America lost businesses. In addition, we’re creating half the number of startups we did four decades ago, nearly all venture capital goes to three states, rural lending is woefully low, and the capital spigot to small businesses is trickling. We’re seeing a concentration of opportunity in the digital economy to a far fewer number of places.
Opportunity has concentrated to certain types of people as well. Workers with only high school degrees have seen pay cuts in real dollars. A pernicious pay gap continues for women and people of color. And fewer than half of all jobs in cities provide a middle class life.
This concentration of opportunity among people and places calls for a new social contract for the digital economy. This contract should redefine government’s role in ensuring people have the opportunity to earn a good life for everyone, everywhere. Thinking has to be fresh: 1990’s centrism, 1980’s supply-side conservatism, and 1970’s Nordic-inspired liberalism won’t do.
A modern contract must take the challenges and opportunities of the 21st century head on. We recently issued 12 bold policy ideas for the digital economy that would do just that. They would all provide Americans with the opportunity to earn a good life.
One idea, an American Investment Bank, would allow more capital to flow to people throughout the country. Americans are entrepreneurs — it’s time their government buoyed this spirit. If you’re an entrepreneur with a good idea, it will be easier to attract investment capital where you live instead having to move to Boston, New York or Silicon Valley.
A Small Business Bill of Rights would guarantee speed, flexibility, and parity to every single small business in America. For small business owners, it will be easier to grow your business, and navigating government bureaucracy will take a fraction of the time and resources it takes today. You’ll once again be able to better challenge your competitors.
We must provide opportunities to gain skills that lead to middle class wages outside of a traditional two or four-year college. We would dramatically expand apprenticeship programs to create 1 million positions across the country.
Universal private pensions would require all employers to contribute at least 50-cents per hour into each worker’s individually-owned, low-fee private retirement account to supplement their full Social Security benefits. A lifetime of work will forever mean a comfortable retirement.
The key to these initiatives, and many others, is that this era demands bold and modern thinking — tinkering with old, antiquated programs simply won’t cut it anymore. The world is moving forward; our charge is to make sure everyone has a place in it.
Winston Fisher is a partner at Fisher Brothers and Co-Chair of the NYC Regional Economic Development Council and Jim Kessler is senior vice president and a co-founder of Third Way, a centrist Democratic think tank.