With House control, Dems must now fight for working-class Americans

With House control, Dems must now fight for working-class Americans
© Getty Images

Tuesday's election results raise all sorts of questions, but in the long-run, one of the most important is what economic issues will be emphasized by the new Democratic majority in the House of Representatives.

Three issues stand out: taking further steps on health reform, getting high-income households and corporations to pay more taxes and undertaking an all-out assault on the policies that have suppressed wages for most American workers in recent decades.

ADVERTISEMENT

Further steps on health reform rises to the top tier for some obvious reasons. Health-care costs remain a steady drag on the wages and living standards of American households. The Affordable Care Act (ACA) was a huge step forward in improving access to uninsured households, but it left lots to do in regards to containing growth in health costs.

It’s well-known by now how much better other countries with larger public health insurance programs do when it comes to cost-containment; this recognition lies behind enthusiasm for “single-payer” or “Medicare for all” plans.

Even if full-on single-payer can’t be obtained in the short-run, many of its cost-containment virtues can be imported into the current health system piecemeal. For example, a number of different policies could be passed to restrain the power of pharmaceutical companies to gouge American consumers.

The voting public’s enthusiasm for further health reform is striking. In a circus election characterized by dozens of attention-grabbing sideshows, the desire for further health reform stubbornly stayed at the top of voters’ concerns in polling. Policymakers should not ignore this.

Paying for more ambitious health reform would require revenue. Given that huge increase in income inequality in recent decades, the natural place to look for the first tranche of revenue is at the top of the income distribution.

Of course, the tax cut passed at the end of 2017 went in precisely the wrong direction — starving the federal government of revenue to disproportionately boost the incomes of these rich households. Recent signals from the Hill are disappointing in how timid too many Democrats seem to be about rolling back the worst parts of the 2017 tax bill.

This timidity should give way to a full-throated call to raise top tax rates, close loopholes and (crucially) radically improve tax enforcement to raise revenue for needed public investments and expansions to safety net programs.

Finally, the crisis in American pay needs to be addressed by policymakers. The bottom 80 percent of American workers have seen anemic-at-best wage gains for decades. This is not a sad outcome of apolitical market forces; instead it is the outcome of a sustained policy assault on these workers’ leverage and bargaining power in the labor market.

The two most obvious assaults have been on workers’ right to organize unions and bargain collectively and on the value of the federal minimum wage.

But dozens of less-visible attacks have also taken place; the share of workers guaranteed overtime protections has shrunk, and a majority of American employers force their employees to waive their rights to undertake class actions suits against employers engaged in discrimination or wage theft.

Even decisions made by the Federal Reserve about how low to let unemployment go without raising interest rates to slow economic growth have been tilted against the interests of this bottom 80 percent.

The common root uniting these calls for fundamental health reform, more progressive taxation and stopping wage suppression is that all require confronting the prerogatives of the wealthy and corporations. This makes them a heavy lift, and too many would argue this means that they’re bad politics for any party looking to maintain a majority.

This seems like the politics of defeatism to me. More importantly, whether they’re good short-run politics or not, they’re what American families need for genuine economic security.

Josh Bivens is the director of research at the Economic Policy Institute.