• Some Higher Aspiration for Economic Policy: Talking to Gene Sperling

    What makes economists so often “confuse… technocratic policies, and political strategies with… ultimate end goals”? What makes paid family leave or rampant sexual harassment critical economic issues, “regardless of whether they show up in a prominent metric”? When I want to ask such questions, I pose them to Gene Sperling. This present conversation focuses on Sperling’s book Economic Dignity. Sperling directed the National Economic Council under both President Clinton (1997–2001) and President Obama (2011–2014). He is the author of The Pro-Growth Progressive, and co-author of What Works in Girls’ Education: Evidence for the World’s Best Investment. He founded the Center for Universal Education at the Brookings Institution, has been a senior economic adviser on multiple presidential campaigns, and was a consultant on NBC’s The West Wing.

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    ANDY FITCH: Could we start from your broadest call for policymakers always to think of any preferred metrics or agendas as, at best, means towards the end of widespread fulfillment in people’s lives? And could you address some of the distinct challenges at play when even economists try to grapple with subjective qualities like joy, purpose, respect?

    GENE SPERLING: For someone like myself (and, I’d assume, for many people), you enter the policy world with a basic moral desire to promote a vision of economic justice — of basic fairness and racial justice. I am not someone who has ever lost that idealism. Politics and policy are hard, even brutal at times, but I have never lost that special feeling of working with a team committed to doing something bigger than ourselves.

    Still I have to say that something about the nature of economic-policy debates can make you start to confuse the world of metrics, technocratic policies, and political strategies with your ultimate end goals. I don’t think anyone intends for that to happen. But you can see how people start locking into a defense or critique of a specific policy, or political strategy, or particular metric as if these were the end goal themselves — as opposed to means or guideposts to some higher aspiration for economic policy. Hopefully, when you go to the doctor, your doctor remembers that their end goal is not promoting a favorite medicine, but looking out for your health. That clear and agreed-upon end goal reduces the degree to which a doctor would hesitate changing long-prescribed medicine or treatment, if evidence emerged of a better means to promote your health.

    Likewise, to me, if you keep the focus on your end goal (as I advocate with the three pillars of economic dignity), that helps deter you from simply digging in on past positions. It instead forces you to continually examine whether, in light of changing evidence, in light of global or national or technological or political trends, new policies or positions would be more effective in promoting economic dignity for all.

    Beyond policy positions, a major place where you can see this confusion between ends and means is the area of metrics. Unfortunately, many people in the economic world still seem to treat GDP as the end goal of economics. I do think many progressives (most eloquently, Bobby Kennedy in 1968) have come to understand that GDP is nowhere near a proper end goal for judging whether economic policy is working to provide shared prosperity, happiness, and dignity for a nation’s people. And certainly, 2020 has been a landmark year in showing that the stock market is just a terrible measure of national well-being.

    Progressive economists rightly try to shift the focus to broader measures of well-being: like low unemployment, underemployment, and median income. Some like Joe Stiglitz and Heather Boushey have done admirable jobs in seeking to create improved metrics that better measure inequality. All of this is good and right — but I think it’s important for us to note that even these better metrics shouldn’t be mistaken as an ultimate end goal. Low unemployment or rising median income are much better indicators of national well-being than the stock market for sure. But they still fall short of capturing the full measure of economic dignity. Indeed, an over-reliance even on the best economic metrics can too easily make too many people and too much economic pain invisible.

    Even metrics like low unemployment or modestly rising wages don’t measure whether jobs give people voice, whether these jobs facilitate them being able to be there for their families in life’s most precious moments, or whether these jobs cause them to be treated with respect or abuse in their work and economic lives. Looking back, I feel such great admiration for the work of people like Ai-jen Poo, and Dorothy Bolden before her, and many others fighting for the economic dignity of domestic workers. Today, there’s greater focus on the lack of worker power and benefits for gig-workers. But long before these so-called gig workers, so many others in our economy (like domestic workers, and often taxi drivers) lacked almost any benefits or rights at work, or protections against abuse. When the major metrics are moving in the right direction, it’s too easy for too many policymakers to not look deeper at these assaults on economic dignity.

    This isn’t to downplay the importance of metrics, numbers, evidence, and rigorous analysis. All of those are essential to sound policymaking. This is instead a reminder that first one has to understand what one’s ultimate end goal for economic policy is — so that you can even know what to measure, what to look for, and where one may not be able to rely on metrics to accurately measure human happiness, fulfillment, and well-being.

    One point I try to make when talking to young economists is the degree to which the economics profession often doesn’t even recognize something as an “economic” issue unless it can be lodged in a major metric. Take the issue of paid family leave. This has received recognition as a first-tier economic issue, because it can be seen as negatively impacting a traditional economic metric — the labor force participation of women. That is, no doubt, important. But what if paid family leave didn’t show up in such a prominent economic metric? What if this lack of paid family leave were simply a source of major economic unhappiness, with tens of millions of workers feeling that the need to provide for family robbed them of being able to experience many of life’s most precious and meaningful moments? Would that mean we shouldn’t consider paid family leave a first-tier economic issue?

    Likewise, if a large percentage of women (and sometimes men) find that participating in economic life to support their families or to pursue their potential requires them to tolerate domination, humiliation, and the abuse of sexual harassment, should we only label that a major economic issue if it shows up in an employment metric? If we are clear-minded that the achievement of economic dignity is the ultimate end goal for economic policy, then we don’t handcuff ourselves from seeing issues like a lack of paid family leave, or rampant sexual harassment, as critical, first-tier “economic” issues — regardless of whether they show up in a prominent metric.

    To make even more concrete some of these real-life end goals of policymaking, could you sketch this book’s deathbed test-case of an American worker looking back on his/her life, sifting through the various possibilities he/she found for pride and satisfaction (and/or despair or frustration), as perhaps our most meaningful form of measuring whether society has provided basic economic dignity?

    Sure. One thing I think everybody in a governing situation goes through is learning that effective policymaking often doesn’t just mean what you are for or believe is right — but what is most important: what should be most prioritized in a budget, or State of the Union, or on the legislative calendar. For me, I would find myself in the White House just wanting to step back and ask: “At someone’s deathbed, what would they look back on as most important to their life and sense of fulfillment?” Asking this doesn’t perhaps tell you what the precise corporate tax rate should be, or anything like that. But it makes you think differently. It makes you see economic goals more in terms of what matters to people’s dignity and sense of themselves and their role as parents, workers, sons and daughters. It makes you think a little more about things like having a voice or power in your job. Whether you could be there for your children and parents when they needed you most. Whether you felt you could give your children the chances you wanted them to have. Whether our policies protect people from evictions or loss of health care in the worst of times. All of that makes you see why something like health care security and protecting people with pre-existing conditions, or the right to organize and have paid leave, can be core issues for how people look at their economic lives — again, regardless of how much these concerns show up in GDP.

    One motivation for writing this book was having some members of Congress call me in 2009 and ask if I could help convince President Obama to focus on the economy as opposed to health care. For me, the inability of a parent to provide health care for the children they love more than life, particularly when the health of those children was at risk, would be among the largest assaults on economic dignity. Yet what really hit me there was even some Democratic members of Congress not thinking of this as an “economic” issue. Like many people, they had come to think of “economic policy” as only being about what sparked an extra tenth of a percentage of GDP, as opposed to what someone on their deathbed would have thought mattered most.

    That was one of the moments making me feel it was worth stepping back and asking more people, more policymakers, to reflect more on what should be the ultimate goal of economic policy. My personal journey on this issue led me to the view that our North Star for economic policy should be the three pillars of economic dignity that I lay out in this book: first, people having the capacity not only to care for their family (as they define family) but to experience life’s most precious moments; second, people having the capacity to pursue purpose and potential and meaning in one’s economic life (and receiving first and second chances to do so); third, people being able to work and participate in the economy with respect, free from domination and humiliation.

    So for just one quick example of far-reaching policy implications posed by the first pillar of economic dignity, could we consider how labor-market monopsony (a relative scarcity of potential employers) has reduced worker power in recent decades? And could you sketch a few striking manifestations of how this particular inequality plays out in everyday strains placed on American families — say with 70 percent of low-wage workers now required to keep their schedule “open and available” to suit their employers’ needs?

    Well first, I think the evidence is more and more airtight that economic concentration has led to increased economic inequality in terms of wages, income, and loss of worker power. I also think that concentration has moved us in the wrong direction when it comes to basic spheres of economic dignity that should be guaranteed — and not subject to being trampled on due to unequal market power.

    There’s no reason you cannot have a strong market economy that has policies ensuring everyone a basic level of economic dignity. While a market economy will inevitably mean some people have more income or wealth, there’s no reason we shouldn’t seek to protect what may be life’s most inherent equality: that the most meaningful things (being able to care for those you love, being able to enjoy the most universally precious moments throughout the seasons of life, being treated with respect, having a sense of purpose) can be available to all. Yet while many of these experiences may fall under the “best things in life are free” category, we know that economic deprivation and economic inequality indeed deny these basic joys and sources of meaning to tens of millions of people in our country. When you consider that one in eight American women have to return to work within a week of childbirth if they want to keep their jobs, when you recognize that even bereavement leave (for those who suffer the ultimate tragedy of losing someone in their immediate family) goes mostly to executives and not lower-paid workers, when you think of workers feeling they can’t be the parents they want to be because they have to work three jobs just to survive, when you think of working parents (disproportionately people of color) having no choice but to live in places where their children experience disproportionate environmental harm from asthma or from violence, you can’t just say: “Well, at the very least, these elemental joys and moments of meaning are free, and make family the great equalizer.” Economic-policy failures also impact these basic matters of fulfillment and well-being.

    We clearly do not have that floor, that universal capacity to enjoy these moments which should come equally to all people. Even when our economic policies help to provide a basic list of goods, and to meet a basic list of needs like a job, health benefits, housing (each essential for caring for loved ones), we still must ask whether those policies are designed to be comprehensive enough to meet this deeper requirement of economic dignity — so we ensure that what is most equally meaningful in life isn’t denied to tens of millions, due to a failure of economic policy.

    Then for your second economic dignity pillar, how might a robust pursuit of potential and purpose emerge through reinvigorated policy commitment to providing each American with both first chances (tangible support to cultivate our distinct capacities) and second chances (a leave-nobody-behind approach to economic growth)? And how might this focus on both first and second chances speak in unifying terms to, say, under-resourced communities of color and economically displaced majority-white communities?

    To me this definition draws heavily on uniquely American ideals, even though we have brutally failed to live up to them throughout our history: especially in the case of the brutal treatment of Native Americans and enslaved Americans, but also the continuing second-class citizenship of black Americans and women for far too long. This second pillar of economic dignity is one of those unrealized ideals that many of our top civil-rights heroes (from Frederick Douglass to Thurgood Marshall to Martin Luther King) have sought to hold up as a promissory note that needs to be fulfilled. This is mainly the ideal that the accident of your birth shouldn’t put a limit or ceiling on your ability not just to rise economically, but to pursue some greater sense of potential and purpose. That ideal (in never squelching human potential) must mean a true commitment to both first chances and second chances. It means Americans will retain their capacity to thrive and pursue potential even after economic downturns and individual accidents — and even after making mistakes.

    In the book, I discuss how that ideal was expressed when, in the 19th century, the US became the first major country to outlaw debt prisons, and to offer fresh starts through bankruptcies. When you look at this history, you see it rooted in the notion that capping someone’s potential to thrive would contradict both the national pursuit of a more productive economy and the inherent dignity of individuals feeling that they always have the opportunity to contribute. Of course, the hypocrisy is obscene when you consider that this all happened, at least for white Americans, during the time of slavery.

    But I do believe this ideal (however ignored or historically unrealized) to recognize the basic human desire to thrive, contribute, and pursue potential can be a unifying cause for Americans. For example, there are of course different policy solutions required to provide opportunity to a young African American who has faced enormous barriers of systemic racial discrimination and economic disadvantage, and 52-year-old laid-off steel workers in a depressed manufacturing town. Yet I do believe there is power in seeing these different policies under a unified national commitment to ensure that each of us has the economic dignity of receiving true first and second chances to contribute and pursue potential, and that no one feels their country has given up on or abandoned them.

    For your third pillar of economic dignity, concerns of abuse, domination, and humiliation stretch from the acutely personal forms of workplace harassment highlighted by recent #MeToo campaigns — all the way to economy-wide concerns of entrenched monopolistic firms treating employees, small-business suppliers, and consumers as little more than sources of profit margins. How might mapping this broad range of exploitative practices help to trace certain spheres of dignity that we need to carve out as exempt from economic hierarchies and market-driven calculations?

    So, the Progressive Era no doubt drew force when people in factories started to say: “Hold it. How much do individual political rights mean if, in my economic life and for the majority of my day, I am subject to complete domination, humiliation, and exploitation?” One can see the degree to which these basic matters of what I call “negative” economic dignity start driving the need for government to ensure a realm of economic rights — a realm of basic dignity that cannot be trampled on due to either market power or pursuit of profit. Kant described dignity as essentially a commitment to never treat a person as purely a means to an end. As our nation started the process of passing laws that outlawed child labor, created a minimum wage, prevented sweat-shop conditions and excessive hours, this marked the beginning of collectively saying that it was unacceptable to treat a worker as a pure means for profit, without regard for their basic humanity and dignity. Unfortunately, even with the progress made over the last 120 years, that fight still needs to be fought throughout the American work force even today. Millions of workers still face domination, humiliation, and abuse. I give several examples in the book.

    Some of that story has to do with structural challenges in our economy, and with certain forms of globalization pitting certain workers against each other. Some of it has to do with the decline of unionization, and practices such as forcing workers to accept conditions like non-compete contracts — all operating to reduce labor’s power to demand higher wages and benefits and more dignified conditions.

    We have to fight on two levels to restore that kind of labor power. On the legislative front, we need a new economic dignity compact that includes a higher minimum wage, a stronger set of civil-rights protections, paid sick and family leave, and of course health care. Legislative victories on these items truly can alter the power balance, can help to transform domineering or humiliating workplace situations into respectful and fulfilling arrangements, all while reducing wage inequality. But beyond these protections, you also need broader structural reform that restores workers’ power to organize, to bond together, to have tight labor markets that give workers “Take this job and shove it” power — the options to exit if they are being mistreated or unfairly underpaid at their job. We need to strengthen the right to organize at every level. Without the right to bond together with other workers and to collectively bargain, there can never be anything approaching equal labor-market power. This is why measures like the PRO Act (or Protecting the Right to Organize Act) and the Domestic Workers Bill of Rights are so important.

    I do note in this book a fair criticism that while many of us in the Clinton world were right to be focused on public investment in education and human capital, we could have done more to emphasize the structural issues of market power as causes of economic inequality. The last 20 years have clearly validated the progressive economists who made this point. We’ve seen the corrosive effect of attacks on collective bargaining: a diminished minimum wage, growing economic concentration, practices like abusive non-compete clauses, and forms of wage theft that require fixing. Again, this doesn’t mean we’ve ever faced some either-or choice. We need to cultivate both worker skills and worker power — as a dynamic duo, not an either-or.

    I think of the Fight for $15, for example, as the single most exhilarating, powerful, pro-worker grassroots movement I’ve seen in recent decades. I give great credit to Mary Kay Henry and the SEIU and so many grass-roots leaders across this nation. At a time when Republican control of the House of Representatives left no chance for a serious minimum-wage increase at the federal level, so many people took to the streets across the nation to make it happen in their cities and states. It may have started as an effort to get a sectoral bargaining agreement with the fast-food industry, but it then developed into a national movement that has deftly operated city by city, improving economic life for tens of millions of people — all while weakening the national case against a higher minimum wage, and fueling collective bonding around progressive policy reforms.

    You also make the persuasive case for how a “dignity net” can provide a secure base from which to innovate our way to future flourishing. So what should, say, post-COVID economic restructuring prioritizing “double-dignity” occupations look like?

    There’s no question that the COVID crisis has shined a light on our national contradictions, and on holes in our social compact. Truthfully, it shouldn’t have taken the COVID crisis to make us realize how essential to our lives farm workers and front-line health professionals and those who care for our loved ones are. Why should it have taken a pandemic to make people realize that caregivers for very young children or for older parents are doing some of the most valued and essential work in our society? What COVID did, I think, was to force more national cognitive dissonance over the injustice of seeing nursing aides risking their lives to care for someone in our family, while knowing they couldn’t normally take a paid week off to care for their own ill loved one. Or that farmworkers were risking their lives to provide us food while half did not have health care.

    Our imperative is to use this moment to recognize the need for a broader economic dignity compact for all. And we need to start seeing these jobs as what I call “double-dignity jobs” — jobs that promote dignity both for workers, and for those who benefit from this work. We need to ensure these workers have good pay, benefits, the rights to organize, the ability to take on more responsibility and to pursue stronger career paths. It’s not good enough to call these workers heroes, and applaud, and then just allow an economic framework to continue that denies them basic dignity. We have to seize this moment to make a true and tangible commitment to economic dignity for all.

     

    Portrait of Gene Sperling above courtesy of Praise Santos.

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