Today we’re talking about wages—specifically, how the widespread suppression of wages is destroying the American economy. Author, professor, and fellow traveler Michael Lind just published a new book titled “Hell to Pay” that argues America is in need of a revolution in the way we think about work and wages. Lind warns that if American worker power isn’t restored to its previous highs, there’ll be hell to pay. (Sounds a bit like “the pitchforks are coming,” doesn’t it?)
Michael Lind is the author of more than a dozen books. He is a columnist for Tablet and has been an editor or staff writer for The New Yorker, Harper’s, The New Republic, and The National Interest. He’s one of the founders of the New America Foundation. He has taught at Harvard and Johns Hopkins and is currently a professor of practice at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin.
Hell to Pay https://www.penguinrandomhouse.com/books/690656/hell-to-pay-by-michael-lind
“Hell To Pay”: Michael Lind On A True Good Jobs Strategy https://www.forbes.com/sites/michaelbernick/2023/05/16/hell-to-pay-michael-lind-on-a-true-good-jobs-strategy/?sh=c4e0c584d160
Website: https://pitchforkeconomics.com
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Michael Lind:
The subtitle of my book, Hell to Pay: How the Suppression of Wages is Destroying America. And it was kind of an inflammatory publisher subtitle, but I really believe this.
Nick Hanauer:
Capitalism is either a good system or it’s not. If it’s a good system, it cannot also be true that the whole system will come tumbling down if companies are required to pay workers enough.
David Goldstein:
You know if we don’t start paying people more, in closing that income and wealth gap, there’s going to be Hell to Pay.
Nick Hanauer:
Yeah.
David Goldstein:
The pitchforks are going to come.
Speaker 4:
From the home Offices of Civic Ventures in downtown Seattle. This is Pitchfork Economics with Nick Hanauer, the best place to get the truth about who gets what and why.
Nick Hanauer:
I’m Nick Hanauer, founder of Civic Ventures.
David Goldstein:
I’m David Goldstein, senior fellow at Civic Ventures.
Nick Hanauer:
Today, we get to talk to Michael Lind, who’s got a new book out called Hell to Pay, How the Suppression of Wages is Destroying America. And I’m really excited to get to chat with him. He and I have collaborated in the past. He’s been a fellow traveler on a lot of these issues for a long time. A super interesting guy, and he’s written so many things.
I mean, he wrote another book called The New Class War, The Next American Nation and Land of Promise. He’s been a thought leader and strategist for decades and decades. It’ll be really interesting to reconnect.
David Goldstein:
Yeah. Obviously, a fellow traveler of yours, Nick. The title of this podcast is Pitchfork Economics, and that’s a nod to your original pitchforks piece in Politico. The pitchforks are coming. And part of the argument there was if we don’t start paying people more in closing that income and wealth gap, there’s going to be hell to pay. Their pitchforks are going to come, and they’re going to come for you and your fellow billionaires as well as everybody else.
Nick Hanauer:
Yeah. I love the first chapter of his book titled The Big Lie. You Are Paid What You Deserve. So, near and dear to our hearts. But with that, let’s chat with Michael.
Michael Lind:
Well, I’m Michael Lind. I’m the author of Hell to Pay, How the Suppression of Wages is Destroying America. I have worked for Harper’s Magazine, the New Republic, the National Interest in the New Yorker.
And for most of my career, I was at a Think Tank, I co-founded called New America. I moved back to my hometown of Austin, Texas to teach at my alma mater, the University of Texas in 2017. And I’m staying in Austin, but at the moment I’m a freelance writer.
Nick Hanauer:
You’ve been thinking and writing about these subjects for a long time. What made you want to write the book that you just published?
Michael Lind:
Well, Hell to Pay, How the Suppression of Wages is Destroying America, it’s about worker power and it’s something that you’ve been focused on longer than I have and many other people. I kind of backed into the subject from my major concern, which was industrial policy because let’s assume we get our technology and investment policy right and we grow our traded sector and increased productivity in the non-traded service sector. And that we just have more profitable companies in a bigger economy.
How would we make sure that those profits are shared with the majority of Americans? And the simple econ 101 answer is, it’s magic. Somehow it just trickles down. Right? The somewhat more sophisticated neoliberal answer, which I took for granted for many years, I just became very skeptical about it, was that, well, it won’t trickle down, but we can have a large-scale redistribution from the winners to the so-called losers, a term I obviously I don’t like very much. And it just became clear to me, as I’m sure it was clear to you long before that there’s just no political will to-
Nick Hanauer:
That sounds good on paper. It just never happens.
David Goldstein:
You’re telling me that the people with wealth and power don’t want to redistribute their wealth and power?
Michael Lind:
Well, it’s not only that. It’s what in my book, the New Class War, I call the over class, what some people call the managerial professional elite. And these are not tycoons. These are doctors and lawyers and professors and make six-figure salaries.
And to get their vote, Hillary Clinton had to promise that no households over, I think it was 200,000, would be getting any new taxes in a Clinton administration. And then, Biden, I believe he raised to 400,000 per household.
Nick Hanauer:
Correct. Correct.
Michael Lind:
Well, what’s the alternative? The alternative, and again, this has been well known, this is kind of obvious, is what Jacob Hacker calls pre-distribution. I prefer to call it distribution first because it-
David Goldstein:
I agree.
Michael Lind:
… it is distribution. And second, people can’t hear the difference when you’re saying pre and re. But it’s just distribution. You distribute the profits in the form of dividends to shareholders, payment to managers and salaries and wages to workers.
Nick Hanauer:
Yeah. And I know you know this and have written of it. This approach is both more obvious, but it’s also way more efficient. It is just so much more efficient to pay people adequately rather than impoverishing them at work and then creating this giant bureaucracy designed to fill in the gaps.
Michael Lind:
Well, the scary thing about the giant bureaucracy, even if it’s well-intentioned, it creates a surveillance state because you have to do two things. You have to make sure these people are really… they honestly are needy. They’re not millionaires, just bulking the government. But then, on top of that, you have to control their behavior and the voters will insist on that, right? You can’t spend it all on beer and cigarettes.
And this was really impressed on me in the early days of New America because one of our programs promoted the idea of baby bonds. This was a form of redistribution where you give a certain amount of money to all children at birth and then it grows. And when they’re 18, they can use it for various purposes. So, we had a couple… and these very well-meaning people. We had these very well-intentioned nonprofit advocates giving us a talk about their vision of baby bonds.
And when you were 18, you could use the baby bond with all the interest accrued to put a down payment on a house or to go to college and various worthy things as long as you had graduated from high school and had not had a child out of wedlock. These were liberal. So, I thought about… I raised my hand and I said, “Well, you’re realizing that the federal government will have to have files on the sex lives of every teenager in the United States.”
And that’s just an insoluble problem, Nick, with redistribution, because it is rational for the voters if you’re going to tax them for redistributive purposes, to ask that some constraints be put on how the money is used. And you remember Gunnar and Alva Myrdal, they were the great Swedish social democratic thinkers of the mid-20th century. Alva Myrdal preferred that you have in-kind benefits for Swedes in the Swedish welfare state instead of cash, because otherwise… and this was the great left-wing thinker, the Swedes would spend it all in on alcohol.
Nick Hanauer:
Yeah, Vodka.
David Goldstein:
A lot of beer too, I know.
Nick Hanauer:
In fairness. Yeah, that’s right. That’s right.
Michael Lind:
Indeed.
Nick Hanauer:
Yeah. And herring.
Michael Lind:
Yeah. But I think this is something we need to stress, Nick, which is you could do whatever you want with your paycheck. If you want to go spend it on booze, then spend it on booze. Rich people can-
Nick Hanauer:
Spend a lot of money on booze.
Michael Lind:
Well, this came up with the baby bond stuff because they would limit the purposes for which this form of redistribution could be used. Now, Bruce Ackerman of Yale who had a Yale law who had a similar proposal, he rightly had no restraints on it. And he said, “Well, if a rich kid can take a year off and go tour Europe between high school and college, then why not spend this stake as it was called this baby bond on that?”
But the vast majority of advocates said, “No, no, no. They can only use it for housing. They can only use it for what the taxpayers would believe is worthwhile.”
Nick Hanauer:
Michael, I’ve really never considered this issue in the way that you just framed it. It is this intractable social problem, isn’t it? If you’re Sweden or Norway, it’s just an order of magnitude simpler, right? You have a much more homogeneous population. It’s much smaller.
People know everybody. But in a country as vast and diverse and complicated as ours, you do end up with this really complicated imposition of standards and judgment on everybody which bogs everything down and makes everybody crazy and resentful and so on and so forth. It’s super interesting. Don’t you agree, Goldie? It’s a super interesting point.
David Goldstein:
Well, I think also, yes. Obviously, this is an extremely diverse country, deeply racist in many ways in its history. But also I think what you see, Nick is the result of 40 years of neoliberalism. Part of the problem here is that if you need the money, by definition, you don’t deserve it.
Nick Hanauer:
That’s true. No, that is true.
David Goldstein:
Because the market pays you exactly what your worth. So, if you don’t have money, you’re undeserving. And we have drummed that into people in such a way that it’s easy to make that moral leap that all the recipients are unworthy.
Nick Hanauer:
Goldie, that’s such a good point. But Michael, let’s back up a little bit. Why don’t you lay out the thesis of your book in as shorter way as you can?
Michael Lind:
My argument again, which is not original, but I think coming from me, it may have some effect because I’m not seen as one of the usual suspects in this area. My argument is that the classical liberals, Adam Smith and John Stuart Mill and Alfred Marshall all knew that wages are somewhat indeterminate. That is, most companies, even small companies, have a fair amount of discretion in the prices they charge.
I mean, they can’t charge too much. They’ll go bankrupt. So, I used to work when I was in high school for my uncle, a grocer, and he would have sales. So, how do you have sales? You jack up your price and then you say, “Starting Thursday, I’m going to cut the price,” right?
So if the market determined the price, that would be impossible. And the same is true for wages. And so, this is like the 19th-century liberals. This is not some wild left-wing social democratic view, the bargaining power of the employers, the masters as they were called by Smith, and the workers determined the wage and the higher the bargaining power of the workers. Now, they couldn’t bankrupt the company, but the classical view was that you had to pay your costs and have a profit after that.
But the way the profit was distributed among the shareholders and the managers later in big firms, and the workers was determined by the relative clout of these different groups. And then, along came John Bates Clark, great American economist, whom you may have heard of. There’s a John Bates Clark medal that Paul Krugman among others won for the brightest young economist.
And he wrote a book in the 1890s saying, “Well, no, actually…” I was rereading this the other day. Wages are set by a natural law. It’s actually a natural law. There’s no human agency involved. Everybody, the owner, the lenders and investors and the workers get exactly their marginal contribution to the enterprise.
And I hadn’t realized this when I wrote my book Hell to Pay. It doesn’t affect the argument, but Clark’s thought experiment was all based on a farm where you had a field and then you just added one worker to till that field, and this was the marginal contribution. And then, he worked out how much you would pay for all your higher tens.
And being an academic economist, he just thought this simple-minded thought experiment you could apply to a farm field, can be applied to all industrial enterprises and governments forever, whatever may be the case in the future. But this became the marginal revenue productivity theory of wages, which is still taught in economics classes.
Nick Hanauer:
But Michael, there is a quote by John Bates Clark somewhere that I read, where he went one step further and argued that this way of understanding the economy was very important because it was crucial that workers feel that their wages reflected their contribution.
Michael Lind:
Oh, yeah, exactly. Exactly. But the politics of it was he was a conservative opponent of labor unions and of socialism and of William Jennings Bryan type populism. And the business class of his day of the 1900s and since seized upon this as a way of saying that, “Well, sorry, workers, there’s no point in unionizing. There’s no point in having more bargaining power.
All you will do…” and you read this all the time in the Wall Street Journal and Libertarian, “If you get a raise above the natural rate, you are supposed to be paid, then you will destroy the business and you will be fired, and the American economy will collapse, and we’ll have World War III and mutants will wander the atomic.”
Nick Hanauer:
That’s right. Cats and dogs living together, et cetera, et cetera.
Michael Lind:
Exactly.
Nick Hanauer:
Yes. End of times.
Michael Lind:
Biblical horrors. Yeah.
Nick Hanauer:
End of times. Yes. I’ve got to dig up that quote because it is just extraordinarily revealing.
Michael Lind:
He also said, “But of course, this only applies if we assume no technological progress.”
David Goldstein:
Other than that, it works perfectly.
Michael Lind:
Yeah. The minute you have technological progress, then one firm is increasing its market share based on the new product it’s offering rather than on the poverty of its workers. So, we can’t think about that. That undermines the whole project of discrediting the Samuel Gompers and William Jennings Bryan and Karl Marx.
Nick Hanauer:
Okay. So, given decades and decades of wage suppression, you have some strong views about what we should do to heal it?
Michael Lind:
Yeah. And I think there’s no one size fits all method. So, I think just as industrial policy, we have to have sector-by-sector policy. What you’re going to do, and… well, for example, look at the Teamsters in transportation and logistics, the proper way of increasing the bargaining power of folks who work in that industry may be different from that of professionals who are contractors who work for financial firms from home or of nursing aides in large hospitals.
So, again, my book, I’m putting things together. I’m not trying to be terribly original, although I think the combination is original. In large concentrated industries that what you think of as a classic manufacturing and infrastructure industries, it makes sense to have fairly traditional trade unions. What they need, unlike in our present system, and we can talk about this a little bit more in detail if you want, is it needs to… they need to be able to bargain with all employers, multi-employer bargaining in that sector, which I’m sure you agree with, not just with individual employers.
Nick Hanauer:
A 100%.
Michael Lind:
Now, the interesting thing for the 21st century is even in the 1900s reformers, including the young Winston Churchill who might quote in the book, who introduced an early version of this kind of legislation, they realized there were some occupations that it was impossible to unionize, mainly because they were dispersed. So, if you have one or two workers scattered all over the place, and if they quit, then they were just fired. They can’t shut down the operations of the company.
And most of those workers a hundred years ago were women who did piecework, often sewing. The textile company would drop off the pieces of cloth to their tenements or their homes or whatever, and then they were milliners. They would sew or make hats, and then they would turn it in for a fee.
And these were terribly poorly paid occupation, long hours. And so, Churchill and these other reformers in the US and also Canada… I mean UK, Canada, US, Australia and New Zealand around that time, they came up with wage boards, which are sometimes called worker standards boards, where it’s not traditional collective bargaining. What you do is, as you know, you appoint a representative of labor, representative of all of the employers in that industry, maybe a government representative, maybe a consumer representative, and you work out a sector-specific scale of wages, hours and so on for that occupation only.
And this was kind of forgotten about. That there were a few states that had statutes like this from the early 20th century in the US. But Andrew Cuomo, as you know, in 2015, dusted off this old wage board statute in New York and used it to push through a wage increase for fast food workers. And Governor Newsom in California is doing something similar with us. They call it a commission.
And finally, in addition to sectoral bargaining and concentrated sectors and wage boards for these decentralized low-wage jobs, I think there may be a lot of jobs where neither is particularly appropriate, for example, professional jobs, but you can still bolster the bargaining power of the workers through contract law alone. Because as you know, employers have all kinds of devious things buried in these contracts that workers sign that they don’t know about until later. The most sinister is the non-compete clause.
And this happened to a friend of mine who was an H-1B and was working for one of these so-called body shops or labor contractors, which then rented him out to US financial and tech corporations. So, they finally grudgingly sponsored his green card, so he would’ve all of the rights of an American worker while waiting to get his citizenship, which eventually he did, thank God. But then, when he quit the labor contractor, they sent him a letter saying that, “Well, you remember, you signed this contract saying you can’t work for any firm that we work with or with any similar firm within a 3000-mile range of New Jersey,” including the Atlantic Ocean, right?
I think that goes into Britain and France and Spain a little bit. So, he was terribly distraught. And I told him that is unenforceable. In most states, it’s called an adhesion contract. Under common law, informal judgment made law in most states in the US and Britain, if there’s too much inequality of bargaining power between parties, then the written terms can set it aside.
So, the fact that the judge can just say, “We’re going to tear up this contract.” So, I had my friend, he had spent some money to hire a lawyer, send a note to this contractor saying, “This is unenforceable.” So, they never tried to enforce it, but it makes you wonder, Nick, how many hundreds or thousands in this case of these poor H-1Bs… oh, by the way, I left out the most important part for paying a large sum, they would waive the non-compete clause.
Nick Hanauer:
Unbelievable. Unbelievable. Well, we happen to know that one in five American workers are subject to non-competes today, and the Biden administration has published a rule that is in the rulemaking process right now to eliminate non-competes altogether.
But you are right in pointing it out that it is one of the most nefarious clauses in labor today because… and the economic estimates, I’m not sure if you’ve read it, are that by eliminating non-competes, you’re talking about raising wages for workers in the range of $300 billion per year, right? That’s real money.
David Goldstein:
It also makes the labor market a lot more efficient because now you have people moving to the right jobs instead of being stuck in jobs that they’re not best fit for. You want people to be able to move from job to job. That’s an efficient labor market.
Nick Hanauer:
So, what else should we be doing?
Michael Lind:
If you look at most of the low wage jobs in the US, they’re concentrated in a few sectors as you know like retail, leisure and hospitality. We have a lot of very poorly paid, but essential medical jobs like nursing aids, these very important jobs, elder care, childcare. So, I think we ought to have a triage approach.
And the first thing we need to do is to really clean up those areas. I mean, I feel for the professional engineers and scientists who got screwed over by Google and Apple and so on with these no-poaching conspiracies that the Justice Department caught these tech firms at. But right now, my main focus is on janitors and on fast food cooks and so on. And there I think you want to do two things. You want to do the wage boards, and you don’t need to do anything different from 1900s.
You just need… every state needs to have these wage boards. You can even do them at the municipal level. And the good thing, so to speak about these bad jobs is that they cannot be offshore. They cannot be removed. Factory jobs can be located anywhere, but they’re always going to be janitors.
They’re going to be emergency room nurses, some nursing aids, you’re going to have to have them in your town. And if their wages go up, then you may have fewer of them, and you may rearrange things, and you may invest in automation. But you’re not going to get rid of your janitors and your nursing aids and your city, wherever it is. So, that basically gives the government bargaining power with these employers. Because they’re not going to just shut up and move to a more lenient state.
Now, at the same time, for political reasons, and also there are nice, well-meaning small business employers who would like to pay their workers better, but their profits are too low. My friend Robert D. Atkinson, the economist and head of the Think Tank, ITIF, and I did a proposal for what we call small business boards where you would combine wage boards with various other measures, helping small businesses to increase their productivity.
Now, ironically, contrary to the Antitrust School of Lina Khan and Barry Lynn and of Matt Stoller, which gets some things right, but others wrong. Our proposal for helping these small businesses would be to relax antitrust rules to allow them to engage in non-competitive collaboration that it allows them to obtain increasing returns to scale like big firms. So, examples of that are they could have common R&D shared with all of the small businesses.
They could have common marketing. And we’ve had this since the New Deal, by the way, in agriculture. So, agriculture, if any of you grew up on a farm, is organized on the basis of commodity marketing boards, and they have these wonderful names like the peanut board and the Christmas tree board and things like that. And so, you have the Department of Agriculture through these boards does mass marketing, and sometimes they do other businesses that the individual small farmer could not afford.
Nick Hanauer:
So, like milk.
Michael Lind:
Milk, yeah.
Nick Hanauer:
Like milk advertising?
Michael Lind:
Exactly.
Nick Hanauer:
Right? Milk is good for you. Well, that’s not an individual dairy doing that. It’s an association, right?
Michael Lind:
Yeah. So, our proposal is that you do this-
Nick Hanauer:
Yeah. Interesting.
Michael Lind:
… with these small ends. So, that’s the stick in the carrot. The stick is we’re going to have wage boards. They’re going to say, “What…” Just like the janitors or the fast food workers, or let’s say it could be nursing aids, retail clerks, this higher minimum wage in that sector only is going to be phased in in this state. But in the intervening five or 10 years while we phase in this inflation-adjusted permanent increase, you can get aid, you can belong to this R&D consortium that will help you automate your small business.
You can have your products sold by this government broker, trade association, marketing board. And so, other countries do this. For example, the marketing boards are used routinely by other countries both developed in developing countries. We had R&D consortiums in the high-tech sector, you may recall, for catching up with Japan with silicon chips. And that was a success.
So, our proposal is in addition to imposing higher wages in better hours on small businesses, the federal government could help, and this would be in a state-by-state basis. So, it would be most… I myself, given my druthers, I’m a Hamiltonian. I would rather do everything nationally, but this is a federal country.
And most successful policies apart from social security and Medicare are hybrid federal and state policies where the federal government funds it may be entirely or with matching funds, but the states have some leeway. So, we would set up a hybrid federal-state program to help small businesses become more productive. So, that they can pay the higher wages that they’re going to have to pay according to the wage board, but at the same time, their profits will go up. So, they’re not going to be hurt.
David Goldstein:
That’s a super interesting idea. And it could differ. Obviously, there may be a national association of small businesses that could be helped technically, but that’s a really interesting idea.
Michael Lind:
One of the themes of Hell to Pay is that our system now, we’ve gone from a high wage low welfare system, by which I mean, not that we had a high welfare system in the New Deal, but just that today, wages are so low and our low wage, high welfare system that they make up a large amount of the overall income by design of a low wage workers. So, the low wage worker, even an individual cannot support a family, cannot survive without various means-tested subsidies, whether it’s cash like the earned income, tax credit, housing vouchers. And if you know these people, it’s just a total nightmare because they’re run by different government programs, they have different eligibility standards, they have different paperwork. It’s just horrible torture to live like this.
David Goldstein:
It’s hard work being poor.
Michael Lind:
It is. You have to hire an attorney and accountant just to do the paperwork of being poor. So, a lot of these problems, I think will solve themselves. So, you wanted to have a residual compensatory welfare state. That’s means-tested for people who, because of behavioral problems or illness, disability, et cetera, they cannot work. But one of the applause lines I’ve found that works with all audiences in this country, left, right or center, is if you work 40 hours a week, you should not have to be on means-tested welfare programs of any kind.
Nick Hanauer:
Yeah, a 100%. As I’ve said it, capitalism is either a good system or it’s not. If it’s a good system, it cannot also be true that the whole system will come tumbling down if companies are required to pay workers enough to get by without government assistance, right?
Michael Lind:
Yeah, exactly. Exactly. So, basically what our system is a pro-employer welfare state. It is designed to privatize the benefits of low wages to workers, to the employers, and also to the consumers of specific goods and services they provide. And the workers themselves suffer, and the real losers are the taxpayers because the taxpayers end up having to top up the inadequate poverty wages of tens of millions of people.
Nick Hanauer:
So, couple of final questions. First, our benevolent dictator question, if you were in charge and politics was not a concern, what would you change? What would you do?
Michael Lind:
Well, the first thing I would do as benevolent dictator, and I assure you as dictator, I would not be benevolent. I would be pretty hard line.
David Goldstein:
Yeah, I think I’d be like that too now.
Michael Lind:
But first thing I would do is outlaw at-will employment in the United States. Most countries do not have at-will employment. That is once you’re hired, you can only be fired for cause specified in the law. In this country, you cannot be fired, at least in theory because of racial discrimination or sex or gender discrimination or religious discrimination. But you can be fired at a whim otherwise.
And so, merely getting rid of that will employment, gives workers some security and bargaining power in their jobs. The second thing I would do is expand our social insurance system, which gives worker as bargaining power even if they’re not unionized. So, for example, if unemployment insurance is more generous and it lasts longer, then the workers can hold out longer until employers are forced to raise wages.
And this is why Lindsey Graham and other right-wing Republicans want an employment insurance and the stimulus to be as brief as possible to make workers desperate for any jobs at any wages. And the same thing has with family policy, parental leave, subsidies for a childcare, whether that can be used for commercial care or public care or by a caregiver at home. All of those increase the bargaining power of what I consider the real unit for society for most people, not for single people, but it’s the household, right?
And the household can take various forms, but many households where you have a full-time worker, a non-work, two part-time workers and so on. And in real life couples and extended families operate as economic units, and you want to strengthen their bargaining power. And so, the final thing I would do as dictator of these three things, I would mandate… now you’ve noticed I haven’t got into the unionization because that’s a much more complex thing.
And you asked me like what could be done without elaborate congressional law rolling politics. And I think union reform requires that it can’t be imposed. But what you could impose just by dictatorship is just get rid of the small business exemptions and mandates employer health insurance and maybe a few other things like vacation that is this ceases to be private luxuries that maybe unions can bargain for.
You still have lots of stuff for unions to do and wage boards. But if you hire one person as a small business, that person has to have health insurance. That person has to have two weeks paid vacation.
And I come from a long family of small grocers and ranchers and farmers in Texas. And my view is that if you can’t pay a living wage to your workers, then your business should go out of business. You’re not a good capitalist, you’re not a good… you need a different business plan.
David Goldstein:
And somebody who can will take your place.
Michael Lind:
Exactly. Exactly.
David Goldstein:
And we wrote about this in the shared security piece. What I would do is just eliminate all these bullshit job classifications. Work is work, full-time, part-time, gig, salaried, W-2, 1099. It’s all work and everything should get benefits.
Michael Lind:
Yeah, that’s a brilliant idea. And Hell to Pay, I talk about this using the phrase of labor arbitrage, but that’s a form of labor arbitrage. You do not want employers to be able to pit categories of workers with different rights against each other.
Nick Hanauer:
One final question, why do you do this work?
Michael Lind:
Well, it’s less boring than various other jobs. But I grew up in kind of a political family. My aunt too was arrested with her Black friends, desegregating Woolworths, and she later became a co-author with Barbara Jordan on Barbara’s great memoir. And so, I come out a New Deal, civil rights family, and I always thought, “Well, for my generation, what are the things that we need to do and the fights to be fought?” And really now at the age of 61, I think that… the subtitle of my book Hell to Pay, How the Suppression of Wages is Destroying America.
And it was an inflammatory publisher subtitle, but I really believe this. I think that so many of our problems from failed family formation to political polarization and even the lack of friendship and social connection in America today, you can’t solve all human ills. That’s not possible with any political program. But if people could graduate from high school and make enough money to get married and have kids and own a home if they wanted to and have health insurance, then it’s not going to solve all problems. But this would be a better country in all sorts of areas that you don’t think of as normally economic.
Nick Hanauer:
Fantastic. Well, Michael, it was so great having you on the podcast. Congratulations on the new book, and just really fun to reconnect and catch up.
Michael Lind:
Well, thanks. And you and your allies and Goldie, you all have been the head of this, of head of everybody else in this area for a long time. So, keep up the good work.
David Goldstein:
Great conversation with Michael. But we didn’t actually get to the topic of his subtitle, which is how the suppression of wages is destroying America. And to be clear, we’ve talked about this a lot, low wages. That’s really the heart of the problem here.
Nick Hanauer:
It is. It is.
David Goldstein:
We used to have a higher wage economy, an economy in which wages were growing consistently year over year, one generation to another. That’s real wages. And that’s how we built the middle class. And it was, as we’ve said, growth and prosperity is a consequence of a robust and vibrant and growing middle class, not the other way around. And when we moved into this low wage regime starting sometime in the 1970s when the focus became on cutting wages, suppressing wages, limiting wages, and we see an echo of that recently with the Federal Reserve’s fight against inflation.
It was, “Oh, well, how can we spark a recession so that there isn’t so much… we can have unemployment again? So, isn’t so much pressure on wages,” that is what has been hollowing out the middle class and in turn, hollowing out the economy.
Nick Hanauer:
Yeah, absolutely. And hollowing out the democracy, as we’ve remarked on so many times. And the thing that just… the irony of which I just can’t get over is that if you stipulate that some people want limited government or small government. Well, the best way to do that is to have high wages. Because in a high-wage economy where everybody gets paid adequately, you don’t have to have these big social programs to make up the difference.
And you don’t have to have this giant prison, industrial complex to deal with the consequences of poverty. It’s a classic example of being penny rich and pound-foolish.
David Goldstein:
And how locked all sides have been into the neoliberal mindset that has prevented us from creatively addressing this issue. I was thinking during our conversation when we were talking about how in our policies essentially subsidize employers, and we know… we come from the left, we’re progressive. We know that the earned income tax credit is one of the most effective anti-poverty programs we have. It lifts people out of poverty, and yet it’s a subsidy for low-wage employment.
Nick Hanauer:
For low-wage job.
David Goldstein:
Right?
Nick Hanauer:
Yeah, absolutely.
David Goldstein:
You couldn’t pay your workers that little if not for the earned income tax credit because they wouldn’t be able to lead lives that would allow them to do their jobs. And so, we end up subsidizing employers through the EITC and through Medicaid and through housing subsidies and through fuel subsidies in the cold parts of the countries. So, you can heat your home through SNAP, through food stamps.
Nick Hanauer:
Well, as Michael said, we have a pro-employer welfare state.
David Goldstein:
Right. And so, if you get past that into a high-wage economy, then these supports aren’t needed anymore.
Nick Hanauer:
Right. Absolutely.
David Goldstein:
And there’s not just an economic benefit to that. There’s a psychic benefit to that because people don’t want these subsidies. They don’t want government subsidies. They want to earn their own living. It’s dehumanizing, and it’s difficult and it’s convoluted, and people are constantly risk falling off a means-testing ledge.
And it’s an incredibly inefficient way to run the economy as well. So, people say there’s this thing going, “Ah, you just can’t… throwing money at a problem isn’t going to solve it. This isn’t a problem you can just throw money at.” There’s a truth to that. But you know what, throwing money at this problem wouldn’t hurt.
Nick Hanauer:
No, absolutely. Well, it’s the only thing-
David Goldstein:
Won’t solve it on its own, but it doesn’t hurt.
Nick Hanauer:
Yeah, absolutely. Well, fascinating conversation. Really interesting guy. It’s fun to have him on.
David Goldstein:
And again, the book is Hell to Pay, How the Suppression of Wages is Destroying America. And you will, of course, find a link to it in our show notes. We urge you to buy it from your local independent bookstore, or if for convenience’s sake, you can always get it from that big online monopoly.
Speaker 4:
Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to subscribe, rate and review us wherever you get your podcasts. Find us on Twitter and Facebook at Civic Action and Nick Hanauer, follow our writing on Medium at Civic Skunkworks and peek behind the podcast scenes on Instagram at Pitchfork Economics. As always, from our team at Civic Ventures, thanks for listening. See you next week.