Predistribution, Public Opinion and Unilateral Executive Action
As far I am concerned, there is no moral or political difference between the two. Predistributive institutions and redistributive institutions are both just institutions. What matters is achieving greater economic equality, not so much the precise institutional regime that we use to get there. If anything, I tend to find so-called redistributive institutions more attractive because they are easier to fine tune and strike me as more liberating.
I certainly agree on the ‘no difference’ point. Why is it more viable?
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.
But as Susan Mettler argues in the Submerged State (at the link above), it isn’t so much that Americans are more supportive of predistribution as much as they don’t see it. We could say this just means that they would oppose equality producing measures if they noted them, but I’m not sure that’s exactly right either. Polls suggest they are largely supportive of equality producing measures, including those specifically for the poor, while at the same time opposing some such measures (like “welfare.”) More important than public opinion here is likely elite opinion, which as we know is more powerful (Bartels, Gilens), or corporate interests. Why would they prefer submerged state policies? As Mettler says:
Most submerged policies, however, exacerbate inequality: they shower their most generous benefits on affluent people, and they generate detrimental side effects that adversely impact those who are less well off. Some of the largest winnings, moreover, are accrued not by individuals and households but rather by third-party organizations and businesses that benefit from the economic activities such policies promote.
Indeed, Mettler argues that because those policies are hidden, people don’t notice that they benefit from them, leading them to think that only the poor are being helped by government while everyone else is just getting what the market delivers, making them less willing to support further government action.
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.
This is a good place to focus. It doesn’t directly help all workers, of course, but with the legislative route blocked by Republicans (even if you could line up all the Democrats in Congress to address this issues). As the report notes, “President Obama has significant authority to improve the jobs of nearly two million poorly-paid workers whose work is paid for with our tax dollars through an executive order.”
Through federal contracts, grants, loans, concession agreements and property leases, our tax dollars are currently fueling millions of poorly-paid jobs and exacerbating inequality. While doing business with the federal government can be highly lucrative for executives at contracting firms, nearly 2 million private sector employees working on behalf of America earn wages too low to support a family.
Through the use of his executive power, President Obama has the authority to call for improvements in workplace standards among companies that do business with the federal government or get special benefits from federal agencies. An executive order requiring federal agencies to take all possible steps to raise workplace standards and ensure that companies comply with applicable labor and employment laws has the potential to dramatically improve the lives of the low-wage workers that federal agencies depend on to accomplish their goals.24
The president should also act to improve oversight of companies doing business with federal agencies to ensure that this policy is enforced. Finally, in the case of federal contracts, the president can call on agencies to evaluate when work can be done more efficiently and effectively by government employees than private companies.25 As agencies like U.S. Customs and Border Protection and the Internal Revenue Service have already found, bringing previously contracted services back into the public domain can save money, providing a better value for taxpayers.26
In the past, presidents have used their authority to improve job opportunities for Americans working or seeking to work for federal contractors. For example, starting in 1941, successive administrations issued executive orders to fight employment discrimination in the contracting workforce. This effort culminated with President Lyndon Johnson’s signing of Executive Order 11246, mandating equal employment opportunity and affirmative action for all individuals working for federal contractors. An executive order to raise and enforce workplace standards for contractors, grantees, and other private companies that do business with the federal government would follow this powerful and effective precedent.
My point is the real problem is getting around the power of elites, as well as partisan and institutional barriers. The White House could act on this today. But not only are they not talking about it, but very few people outside are either, even if they are deeply concerned with this issue. And so in terms of barriers, the first step is talk about this. So much of our political discourse revolves around legislation. And not just legislation, but federal legislation. Back to the report.
A different type of precedent is offered by the more than a hundred living wage laws and labor agreements for economic development projects enacted by American cities, counties and states over the past fifteen years. These regulations take many forms, but at their core is a requirement that public contractors, subsidized businesses, concessionaires and/or other private companies that receive special public benefits must meet baseline job standards, such as paying living wages, offering affordable employee health benefits, or hiring in the local community. Less rigorous policies simply favor contractors or subsidize recipients who pay living wages and offer benefits. Still other states and cities require that contractors and other companies doing business with the public meet a basic standard of responsible business practices which excludes companies that have repeatedly violated workplace laws, failed to pay taxes, or flouted other public protections. These many approaches to reforming relationships with public contractors and other private companies that receive special public benefits can serve as models for potential federal action.
These do serve as a precedent for federal action, but they also serve as a precedent at the local and state level. I’ve written about this before. It’s obviously true that federal action is better than state action, but state or local action is better than no action. And if people mobilize over this issue at lower levels it would increase the ability to press for this at the federal level.
People are poor because our policies produce poverty. As the report says:
What most Americans don’t know is that many of the workers keeping our nation humming are paid low wages, earning barely enough to afford essentials like food, health care, utilities and rent. Through federal contracts and other funding, our tax dollars are fueling the low-wage economy and exacerbating inequality. Hundreds of billions of dollars in federal contracts, grants, loans, concession agreements and property leases go to private companies that pay low wages, provide few benefits, and offer employees little opportunity to work their way into the middle class. At the same time, many of these companies are providing their executives with exorbitant compensation.
Changing that should be a top priority.