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How to build family policy for the working-class majority

Michael Lind, DCNF

Politicians of both parties claim to support “working families.” But the existing American social contract — the synthesis of labor market laws and norms and welfare programs and social insurance systems — treats the individual, not the married couple or the extended family, as the unit of public policy. The ideal of elite progressives and business-class conservatives is the dual-earner family, which requires children to spend most of their waking hours with paid strangers as caregivers and turns the family home into a dormitory used on nights and weekends by parents and children leading essentially separate lives.

Defenders of the American working class against the economic and social imperialism of the overclass must make it clear that to be pro-worker is not to help workers as isolated individuals, but to help workers as members of families that are treated as the basic units of public policy.

America’s working-class majority did not seek to replace the dominant single-earner, “breadwinner” family of the mid-twentieth century with today’s dual-earner family. Instead, it has been imposed on Americans over the last half-century by the college-educated managerial overclass, whose interests it serves and whose values it embodies. To begin with, the jobs of professional-class women are much more personally fulfilling and better paid than those of working-class women; it is one thing to be a groundbreaking female pioneer in technology or business or law, and another to be a fry cook or store clerk or warehouse worker. Upper-income families with two well-paid professionals can afford to delegate childrearing to au pairs, nannies, or preschool and afterschool programs.

But the dual-earner system fails the working-class majority of Americans — parents and children, native and foreign-born alike. Instead of receiving intense care and attention in their early years from one or both parents, all too many American children are dumped in toddler warehouses, often staffed by low-paid, poorly educated child-minders — perhaps with one supervising a dozen or two children — while both of their parents work in low-wage, dead-end jobs. Sacrificed to the profits of the rich and the careerism of the professional class, the residual family life of the working-class majority is squeezed into nights and weekends.

Despite its relentless promotion by the bipartisan American ruling class, most Americans stubbornly persist in rejecting the two-earner household as a norm. As the American Compass Home Building Survey finds, they prefer a system that allows one parent to work part-time or not at all, in order to devote personal care to the children. A 2015 Gallup poll confirms this basic finding. It showed that more than half of American women with children under the age of 18 preferred to stay home over working, if given the opportunity. According to the same poll, 39 percent of women without children under 18 said they would prefer to be homemakers rather than workers.

In addition to being unpopular with most Americans, the dual-earner system may tend to suppress the U.S. birth rate among all races, with the exception of highly fecund religious sectarians. According to Gallup, the ideal number of children cited by Americans was 3.5 from the 1930s to the 1960s and has fluctuated around 2.5 or 2.6 since then. In 2017, however, the total fertility rate (TFR) in the U.S. was only 1.7 and has been falling, despite the contribution of immigrants with slightly higher fertility rates than natives (immigrants tend to assimilate to low native fertility rates over time).

Why do Americans say they want more children than they actually have? The demographer Lyman Stone has argued that a chief cause is falling marriage rates. This decline cannot be attributed solely to changes in cultural norms. The role of economics in enabling marriage and stable family life is evident from class differences in marriage. Working-class and poor Americans are much less likely to marry and remain married than affluent Americans.

Nevertheless, the unspoken goal of neoliberal labor-market and welfare policy, shared by many libertarians and left-wing feminist opponents of the traditional family, has been to ensure that all mothers will be encouraged by economic necessity, government work requirements and cultural shaming to work full-time. Does the American economy benefit from pushing the mothers of young children into dead-end, low-wage service jobs? Certainly national Gross Domestic Product (GDP) grows when activities like child care are performed by paid labor in the marketplace — unlike the unpaid labor of family members in the home.

But from the point of view of national economic development, overall GDP is less important than labor productivity per worker, which for the most part results from combining workers with advanced technology or using machines or software to replace them. In the long run, technology-enabled productivity growth is the only sure way to increase national incomes — assuming that the gains from growth are widely distributed, in the form of wages, falling prices or after-tax redistribution.

The two goals of maximizing adult participation in the workforce to bolster overall GDP and boosting greater labor productivity per worker thus come into conflict when a flooded labor market allows employers to pay lower wages and deprives them of an incentive to adopt labor-saving technological innovations or labor-sparing organizational innovations.

So instead of maximizing GDP by maximizing the lifetime hours of all Americans in the labor market, the goal of both labor-market policy and welfare policy should be minimizing the dependency of American families — not merely their dependence on the labor market, but also their dependence on government welfare, on lenders, and on charity.

To be sure, a family that is largely economically self-sufficient, like premodern farm families, is not possible in an industrial society, nor is it desirable. Most necessary goods and many necessary services will continue to be produced or provided outside of the home. Most adults will have to obtain income for themselves and their dependents by selling their work for wages in the labor market. And most workers will depend to some degree on employer benefits, tax-favored savings, and government social insurance programs like Social Security and Medicare and Medicaid.

Even so, by pooling economic resources, stronger families can secure a higher degree of bargaining power and dignity when dealing with the bureaucracies of government, corporations, lenders, and charities. Workers able to fall back on support from spouses and family can hold out longer in negotiations for better wages, benefits, and working hours with employers. Families with adequate savings can avoid being trapped in escalating credit card debt. Adult children who inherit homes from their parents can spend more money on their own children instead of rent or mortgage payments. Far from being the oppressive structures of progressive mythology, families empower individuals; they do not entrap them.

Pro-family policies are often vilified by feminist radicals, Malthusian environmentalists, and radical libertarians as sexist and sinister — if not crypto-fascist. Indeed, there is a long history of racist or classist policies which have sought to promote the fertility of some classes or races while reducing that of others in the same society. But a class-neutral, race-neutral national policy that reflects the preferences of most American women of all races, ethnicities, and origins is the exact opposite of malign racist or classist eugenics programs.

As long as family-friendly policies do not discriminate among natives and legal immigrants and members of different classes and races and ethnic groups, it is hard to understand why a democratic government should not help its own citizens to have as many children as they want. In fact, a country with a stable or growing native population is less likely to experience a backlash against immigration than one in which high levels of immigration combine with collapsing native fertility and give rise to fear of displacement.

A return to the “breadwinner wage” system that existed in a few industries in mid-twentieth-century America would be unjust and unpopular even if it were not impossible. It was based on discrimination against women in the workforce and higher private wages for men with dependent wives and children. But it is possible to reform welfare state and labor market policies so that they are neutral with respect to family structure, instead of privileging the dual-earner family of America’s elite professionals. While work outside the home should be required for one or more family members, families themselves should be empowered to decide whether to organize themselves as dual-earner, single-earner, or dual part-timer families. By treating families — not individuals — as the unit of public policy, government can empower family autonomy and family choice.

How would a pro-family social contract differ from today’s American social contract?

A pro-family social contract would not try to dictate the division of labor within the family according to either liberal or conservative social preferences. Labor-market and welfare-state policy should be value-neutral and allow families to make their own decisions whether to be one-earner families, dual-earner families, or dual part-time-earner families, as they see fit.

A pro-family social contract would necessarily follow the existing legal treatment of couples and children, so that the small number of families made up of gay and lesbian couples and those with adopted children would have the same rights as others. For purposes of public policy, the definition of family should be elastic enough to include multigenerational households with grandparents, children, and grandchildren in the direct line of descent as well as perhaps extended family members who live under the same roof and play a role in caregiving. Such multigenerational and extended families have been the norm in most places and times. But the definition must also be limited to people related by kinship or others recognized as couples or children under law, to prevent unrelated groups from enjoying benefits intended for families. Otherwise, however, decisions about whom to include in a family unit should be left to families themselves, not to distant legislators. Such flexibility has always existed in the case of family trusts, for example.

Unfortunately, today’s individual-based welfare system is inherently biased in favor of dual-earner and single-parent families, because it attaches most benefits to individuals, not households, and does not permit benefits to be transferred and shared among family members. To avoid this bias against one-earner and dual part-timer families — to say nothing of multigenerational and extended families — a number of government benefits and work requirements should be reformed to allow them to be shared by married couples while remaining individual requirements and benefits in the case of single adults.

Various examples of benefits that could be transferred or pooled among spouses — and perhaps other family members — can be imagined, such as:

Unemployment insurance. Under a family-based social contract, unemployment insurance could be made transferable among spouses or other family members. In most states, unemployment insurance runs out after 26 weeks. An employed spouse should be able to transfer up to 26 weeks of unused personal unemployment insurance to an unemployed spouse. Members of different generations in multigenerational and extended family households should also be allowed to transfer unemployment benefits to family members.

Work requirements for government benefits. Standard means-tested welfare benefits like the earned income tax credit (EITC) impose individual work requirements on the adult recipient. In the case of married couples, the work requirement for eligibility for benefits should be attached to the couple as a whole, not the individual spouses. This would allow the family, not the government, to decide the family structure: dual-earner, single-earner, or dual part-timer? There should be similar flexibility for multigenerational and extended families.

Medicare. Unlike in many private group insurance plans, Medicare does not cover spouses. This means that if you turn 65, you are eligible for Medicare, but your spouse will not be if they are younger than 65. This is another example of our individual-based social contract pressuring both spouses to work and discriminating against single-earner families. Medicare should be reformed so that both spouses become eligible when one does.

Medicaid asset tests. Nursing home care in old age is provided by Medicaid, not by Medicare. Only those with no assets beyond a few thousand dollars are eligible for Medicaid-funded nursing home care. Those who own their own homes are forced to sell them and pay the proceeds to Medicaid until they are destitute, at which point Medicaid begins to pay for their care.

Some states allow spouses or other relatives to live in the home while the elderly homeowner is in nursing home care. But “claw-back” laws require government to be paid back from the estate after the individual is deceased.

This defeats the purpose of other government housing policies, which encourage people to build up assets in homes that can be passed on to children and grandchildren. Because the major form of wealth of most working-class and middle-class Americans is the family home, there should be a homestead exemption from the Medicaid asset test, allowing the family home to be passed down to the next generation, instead of being sold to repay the government for late-life nursing home expenses. The homestead exemption should be capped at a reasonable amount to prevent the rich from exploiting it.

Tax-exempt perpetual family savings accounts. Many American families have less than a month in emergency savings, while affluent professionals and the rich own most tax-deferred savings accounts like 401ks. The lack of adequate savings means that an income shock like the loss of a job or a surprise medical bill can set off a spiral of disaster, rendering working-class families unable to make rent, home mortgage, auto loan, or credit card payments.

The answer might be family emergency savings accounts (FESAs). These would not be specialized accounts accessible only for particular purposes, like retirement, education, or down payments on homes. Instead, family emergency savings accounts would be unrestricted rainy day accounts, which could be used as families see fit — without the government telling them how to use their money. Most would use the money to tide themselves over during financial crises. Some might pay down debt. Others might use the funds for family vacations. Why not? The rich get to enjoy vacations without the government dictating the purposes for which they can use their money. Why not the working class and poor?

Any member of the family — both parents, children, grandparents, aunts, uncles, cousins, and nieces — should be eligible to contribute to the FESA, up to a modest fixed annual amount. To help each family’s FESA grow over time, it should be permanently exempt from taxation, both at the time money is deposited and at the time it is withdrawn. In most cases the accounts would be so modest and the capital gains taxes so small that the government should simply waive them.

Working-class families could thus enjoy the benefits of multigenerational wealth accumulation from long-term economic growth and compound interest payments. Like certain trusts, the FESA could be potentially immortal, with each generation withdrawing from it and adding to it in turn.

These family-friendly policies are illustrative. Many thinkers on the right and left have innovative ideas for particular family programs. Pro-family reform of social insurance and the welfare state can only be part of a pro-worker economic agenda focused chiefly on overall economic growth and increasing the power of workers to bargain for higher wages.

The goal of public policy should be to empower families, not just individuals. It should accommodate families rather than dictate their structures or micromanage their behavior through the benefit system or the tax code. By strengthening the family as a base of economic support, a social contract for working families would allow family members to pool their incomes and benefits and help individual workers to reduce their dependence on exploitative employers, punitive welfare bureaucrats, predatory lenders, and self-serving nonprofits. Public policy, which today frustrates and undermines working-class families of all races and origins, would benefit America’s working-class majority instead.

This article was originally published as part of the Home Building series of essays by American Compass

Michael Lind is a professor of practice at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin and the author of more than a dozen books, most recently The New Class War.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

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