1. The American Social Contract Michael Lind New America Foundation October 2010

2. The American Social Contract 1 I. Adequate income for workers II. Economic security for non-workers Two elements:

3. Policies Promoting Adequate Income for Workers Land for Homesteads (1800s) Abolition of Slavery (1860s) Immigration Restriction (1880s- 1920s) Female Protective Legislation (1900s) Outlawing of Child Labor (1900s) Minimum Wage and Hours Laws (1930s) Full Employment (Monetary and Fiscal) (1940s- ) Wage Subsidy to Low-Income Workers (i.e. EITC) (1970s- ) 2

4. 3 Low Market Fundamentalism New Deal (Living Wage) High Neoliberalism (EITC) Nordic Social Democracy Subsidy Wage Low High

5. Economic Security for Non-Workers Accident, illness, old age, loss of a job. These are the Four Horsemen that ride roughshod over lives and fortunes of millions of wage workers of every modern industrial community… I. M. Rubinow, 1934 4

6. The History of Economic Security in America Means-Tested Public Warfare (1700s- ) Employee Benefits (1900s- ) Contributory Social Insurance (1930s- ) Tax-Favored Private Accounts (1970s- ) 5

7. Alternative Methods of Providing Economic Security 6 Employee Benefits Social Insurance Private Accounts Health Care Employer- Provided Health Insurance Medicare, Medicaid Medical Savings Account Retirement Security Employee Pensions Social SecurityIRAs, 401(k)s

8. 7 The Problem with Private Accounts

9. The Limits to Redistribution 8 Political- Racial and Ethnic Diversity v. Solidarity Economic- Danger of Relying on Volatile Incomes of the Rich for Revenue

10. A Solvent and Politically Sustainable Social Contract Adequate Income for Workers: The High-Wage, Low-Subsidy Model A Living Wage Economic Security for Non-Workers Universal, Contributory Social Insurance The Link Between the Two High Median Wages Sustain Universal Social Insurance Based on Payroll Taxes 9