Dear Democrats: Don’t be corporate stooges too

Dear Democrats: Don’t be corporate stooges too
© Greg Nash

Congratulations fellow Democrats on the midterm elections. We took back the U.S. House. We put Democrats in governor’s mansions in seven more states, including: Maine, Wisconsin and Kansas. We flipped hundreds of state legislative seats nationwide, and at least six legislative bodies.

But if we want to build on these victories into 2020 and beyond; if we want to save our republic from the anti-democratic assaults of the Trump administration; then we must do more than just build fleeting electoral majorities. We need to use them. It is only by unambiguously improving the lives of the majority of Americans that the Democrats can become the majority party America desperately needs.

Rising economic inequality is shredding the political norms and social cohesion on which a healthy democracy depends. That is why our country will not get better until our people feel better; and they will not feel better until they do better. And the American people will not do better until they are actually paid more.

How much more? $2 trillion a year. Seriously.

Over the past 40 years under Republican and Democratic administrations alike, the collapse in real wage growth has been astounding. From 1935 until 1973 — an era in which hourly compensation grew in near lockstep with net productivity — the real income of the bottom 90 percent of Americans rose an average of 4.2 percent a year. This was substantially faster than incomes of the top 1 percent. But since 1973, the bottom 90 percent have actually seen their real incomes decline, while the top 1 percent have seen their incomes soar.

In fact, over the past four decades, large corporations and their wealthy shareholders have captured nearly all of the benefits of economic growth. After-tax corporate profits have doubled from about 5 percent of GDP to about 10 percent, while wages as a share of GDP have fallen by about the same amount. Meanwhile, the wealthiest 1 percent’s share of personal income has nearly tripled, from about 8 percent in the 1970s, to about 22 percent today. Taken together, these two trends amount to a shift of more than $2 trillion a year from middle-class paychecks to the bank accounts of corporations and the super-rich.

Today, the median American family earns about $59,000 a year. Had inequality held constant since 1980, that figure would be $86,000. Had middle-class incomes continued to grow with productivity, the median American family would be earning over $100,000 a year.

This is the inconvenient economic truth that is tearing our country apart. America owes the median family a raise of somewhere between $25,000 and $40,000, per year. And only by enacting policies that right this wrong can Democrats build a democratic majority.

What would a majority Democratic agenda look like? A $15 minimum wage, a $70,000 overtime threshold, crucial infrastructure investments, modernized labor laws, paid family leave, affordable housing, health care, childcare and public college.

And when you’re asked how you’re going to pay for all these things, grab a page from the Republican playbook: “They’ll pay for themselves.” (Though in this case, by growing the middle class, they actually will).

All of these policies share two core features in common: they are both broadly beneficial and broadly popular. Yesterday, in Missouri and in Arkansas, Democrats and Republicans, alike, approved ballot measures to raise their state minimum wage.

In deep red Utah, Idaho and Nebraska, Medicaid expansion easily passed at the polls. So when pundits and consultants start warning you against moving too far to the so-called “left,” remind them that policies that serve the wants and needs of the majority of Americans are actually “centrist.”

Of course, there’s not much a Democratic House can achieve on its own while Trump loyalist still control the White House and the Senate. But this is where all those governor’s mansions and state legislatures come into play.

If your state hasn’t raised the minimum wage, do it. Same with raising the overtime threshold — overtime pay is like a minimum wage for the middle class. And do everything you can to reinvest in housing, transit, education, childcare, health care and all of the other prerequisites of an affordable middle-class lifestyle.

These next two years are crucial. If Democrats put the American people back at the center of the American economy, voters will reward us at the polls. But if we merely prove to be kinder, gentler corporate stooges — if we allow the nascent Trump loyalist autocracy to take hold — we may not get a second chance.

Nick Hanauer is a Seattle based entrepreneur and venture capitalist. He’s the founder of Civic Ventures, a public-policy incubator.