Global Commission Offers Bold Prescriptions To Address Inequality and Grow Middle Class
For the last 18 months, a group of 17 international experts from 5 countries has met to discuss the transnational trends of globalization, technology and declining worker power. These trends—all exacerbated by the financial crisis—have placed downward pressure on wages and incomes, and exacerbated economic inequality. This group, called the Inclusive Prosperity Commission, or IPC, and convened by the Center for American Progress, today released a robust report aimed at establishing sustainable and inclusive prosperity over the long term in developed economies, with a specific focus on raising wages, expanding job growth, and ensuring broadly shared economic growth.
The IPC identifies five key policy areas that can deliver more inclusive prosperity on a global scale: rewarding and encouraging work; promoting educational opportunity for all; improved measures to support innovation and regional clusters; a move toward greater long-termism in the private sector; and international cooperation on global demand, trade, financial stability, and corporate tax avoidance. Beyond that, the report details a number of policy proposals to achieve inclusive prosperity in the United States. Below are some of the highlights, and click here to read the whole report.
Increasing workers’ share of the economic pie, raise wages and incomes
- Create tax incentives for companies to share profits with their workers.
- Modernize employment laws around overtime pay, workers’ compensation, unemployment compensation, and other protections to recognize the changing nature of work and to provide basic economic security to workers.
- Raise the minimum wage to a level that is at least high enough to prevent full-time workers from living in poverty, and index the minimum wage to the consumer price index in order to reduce the share of workers trapped in low-wage work.
Eliminating financial barriers to higher education
- Guarantee financial support for a college education at a public four-year college or community college so that every high school graduate and their family know that they can afford college.
Structuring tax policy to promote fairness and support aggregate demand
- Provide middle-class tax relief—until income stagnation is overcome—by crafting a tax credit that provides relief for Americans who do not benefit from the Earned Income Tax Credit, or EITC.
- Make the tax code more progressive and fairer over the long term by eliminating the decades-long accumulation of tax exemptions, deductions, and exclusions that have helped reduce effective tax rates on high-income households and corporations.
Increasing labor-force participation and growth
- Use family-friendly labor-market policies to increase female labor-force participation and income by enacting policies including paid parental leave, paid caregiving leave, paid sick days, paid vacation, protections for part-time workers, and workplace flexibility.
Targeting public investment to create jobs and raise long-run economic potential
- Expand infrastructure investment by $100 billion annually over 10 years to bring our infrastructure to a competitive level and sustain demand.
This list has just some of many recommendations included in the bold, comprehensive report. But even though the list is long, there is also momentum in some areas. Today, President Obama announced that he will sign a memorandum ensuring federal employees get at least six weeks of paid sick leave for the arrival of a new child and proposed that Congress pass legislation to give them six weeks of paid administrative leave (the United States is the only developed country that doesn’t have a national requirement that workers get access to paid sick leave). Also today, a new poll was released showing that 75 percent of 2016 voters support raising the minimum wage to $12.50 by 2020.
BOTTOM LINE: Despite the economic recovery, global trends are creating a toxic combination to suppress incomes and wages for middle-class families. Change won’t come with more trickle-down economics. But fatalism is not an option–the future of industrial democracies depend the growth of middle class living standards. Today’s report from progressive leaders across the globe is an important roadmap containing new, innovative ideas to spur quality job growth and tackle increasing economic inequality head on.
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