Oren Cass joins City Journal editor Brian Anderson to discuss his new book, The Once and Future Worker: A Vision for the Renewal of Work in America.

The American worker is in crisis. Wages have stagnated for more than a generation, and reliance on welfare programs has surged. Life expectancy is falling as substance abuse and obesity rates climb. Work and its future has become a central topic for City Journal: in 2017, the magazine published its special issue, The Shape of Work to Come.

Cass’s book is a groundbreaking reevaluation of American social and economic policy. The renewal of work in America will require fresh solutions; Yuval Levin of National Affairs calls The Once and Future Worker “the essential policy book of our time.”

Audio Transcript

Brian Anderson: Welcome back to the 10 Blocks, podcast. This is your host, Brian Anderson, editor of City Journal. The American working class is facing an ongoing crisis. Wages have stagnated for more than a generation. Reliance on welfare programs in many sectors of society has surged. Life expectancy has actually declined in various areas as substance abuse and suicide rates climb. The future of work has become a central issue for us here at City Journal. Last year we published an entire issue called The Shape of Work to Come, featuring articles on the great American domestic crisis of our time, long term joblessness. Today we're going to talk about a fascinating and vitally important new book by Oren Cass, The Once and Future Worker: A Vision for the Renewal of Work in America. The book has already generated a blizzard of comment and discussion, including a Time cover story and a column by The New York Times' David Brooks, calling it "absolutely brilliant." Our conversation with Oren begins after this.

Hello again everyone. This is Brian Anderson, the editor of City Journal. Joining me on the show today is Oren Cass. Oren is a senior fellow at the Manhattan Institute where he focuses on issues ranging from welfare to climate change, and he writes regularly for City Journal, among many other outlets. Before joining us, he was domestic policy director of Mitt Romney's 2012 presidential campaign. Oren's new and first book is called The Once and Future Worker: A Vision for the Renewal of Work in America. Oren, thanks for coming to New York.

Oren Cass: Well, thanks so much for having me.

Brian Anderson: Now what, to start off, what exactly is the government's role in labor markets? This is a crucial theme of your book. There are laws about the right to organize unions, unemployment benefits, but what's the range of it and what is our current approach, compared with that of say, other developed countries?

Oren Cass: Well, the primary role that we really have the government playing today is essentially to order the market around to say, "We don't like low wages, so we're going to have a minimum wage. We don't like certain workplace conditions, so we're going to outlaw them." And then as you mentioned, to create the infrastructure to have organized labor as well. One place that the government is surprisingly absent is on the workforce preparedness and training side where our education system is really overwhelmingly focused on college attainment. And for people who aren't going to make it through college, which is still the majority of Americans, we really offer little to nothing and declining support over time, and so that contrasts a lot with other countries that certainly they have a lot of regulatory policies as well, but they tend to take a much greater interest in the other conditions of the labor market and what they're doing to lay the groundwork for successful outcomes for workers.

Brian Anderson: This is one of the most striking arguments in your book about just how this kind of college for all ideal has disturbed a lot of Americans. I wonder if you could say a little bit more about just how few people really get through the full college experience.

Oren Cass: Sure. I think when we look at each piece of the system, we tend to have reason for optimism. So most people graduate from high school, most of the people who graduate from high school enroll in college, most of those people complete college, most of those people find a job that requires a degree, so that sounds good. The problem is if you step back and add up all of those "mosts" together, or rather you step back and add up all the, the other side of it-- the people who drop out at each stage-- what you find is roughly 80 percent of young people are falling out somewhere along the way. You end up with more people who don't complete high school on time, more people who don't go to college, more people who drop out of college than you actually have people that the system is working for. And yet all of our energy, all of our efforts at education reform, all of our funding goes to what ends up being the fortunate few who are going to be the winners in our society and our economy already.

Brian Anderson: And how do you suggest restructuring our education system to perhaps address this problem to some degree?

Oren Cass: I think the place to start is with what most people would call tracking. And tracking has a very bad reputation in this country, partly for good reason because of some very bad and racially oriented practices of the past, but also just for the general sense that we feel like everybody should have unlimited opportunity, and we want to aspire to the best outcomes for all. And I think those are worthy aspirations, but what ends up happening is that they don't serve most people. What we need to do is step back and say, "What are the trajectories that folks are actually likely to be on?" And meet them where they are and support them in, in the paths that they are taking through life. So one of those for some people is going to be a college degree, but one for a lot of people, and this is the case across the developed world, it's the case over time. It's not something that we're changing no matter how much more money we spend on it. A path for a lot of people is going to be one that goes from high school into preparing for work into a job. And that's a place where we need to invest a lot more of our energy. That's something we need to actually focus our high schools on so that they're not just college prep academies, they're actually giving people work experience, giving people practical skills. And then frankly, I think it's where we need to put our money. I don't know how we justify putting virtually all of our resources into making college cheap for the exact people who are going to be the high earners, when it's really the person who was going to be facing a lower wage job, who's going to struggle to find their financial footing who I think is the one we owe more support to early in life.

Brian Anderson: I think one of the reasons your book is generating so much attention is that you're trying to come up, and this is an example that you've just described where the policy agenda that would address what I mentioned in the introduction is really the domestic policy crisis of our time, or, you know, long-term unemployment or underemployment, particularly among males. How serious in your view is that problem? And what led to your interest in it in the first place?

Oren Cass: I think it's an enormous problem. I think even at this moment, I know even at this moment of what is a booming economy, the very top of a business cycle, you know, nearly 20 percent of prime age males are not in the labor force. And that's overall, if you start slicing that down into talking about males who don't have a college degree and so forth, it's a much higher share and it's a much higher share than during previous booms. So while we're certainly doing better than we were during the recession, we're looking worse right now than we were during 2006, which was worse than during 2000, which was worse than the late eighties and so forth. So what, what feel like booms are more like little bumps on a downward slope. And that trajectory is something that has to concern us very much. And then the other thing I'd say is that we have a strange way when we talk about the labor market of being very happy to write off surprisingly large swaths of the population, and I compare that to how we talk about preexisting conditions. The share of the population that actually has a series preexisting condition that's a problem in the healthcare market, is minuscule compared to what I'm describing now in the context of work. But you don't need half of the population have a problem before everybody knows someone with the problem before it's affecting our entire society. And that's how we need to recognize this. It's not that we're fine until most people aren't working. The share that this is affecting now already makes it, as you said, our biggest crisis.

Brian Anderson: Now some economists say that we just need higher growth, that that's going to solve the problem. You know, the Labor issue will in effect resolve itself. I think what you've just suggested that, that hasn't proven true over, you know, over our economic history, at least over the last several decades. Why do you think that's too narrow an approach?

Oren Cass: I think the reality is that we have to acknowledge there's nothing in economic theory that actually says economic growth is going to give us the kinds of labor market outcomes that we want. All of our emphasis on economic growth, and I should say I think growth is important, I'm all in favor of growth too, but for about 50 years now, we've taken this view in which economic growth is essentially all that matters. And I think how we got there is because we chose to focus just on consumers. If all you care about is how much people can consume, then you can just focus on growth. And if you leave some people behind you redistribute some of the money to them. Uh, this is the metaphor of the economic pie that everybody loves to use. As long as the pie keeps growing, everybody can have a bigger slice. What that misses is the question of who's baking the pie? Who actually gets to participate as a productive contributor in our society? And if that's what you care about, then just counting on growth to get where you need to go is a mistake. And it's the mistake that we've made.

Brian Anderson: The rage in Silicon Valley these days is disruption of the job market. Some people, you know, predict that we'll see half of the jobs going by the wayside. And so we should move towards something known as universal basic income. Could you describe what that idea is all about and why you think it's not a very good idea?

Oren Cass: Yeah. Universal basic income is the idea that we should just create a payment to every person every month that's enough to live on. So let's say a thousand dollars per adult per month, and you get that if you're successful in earning a lot of money, you get that if you're not earning anything. And so we don't need to worry about whether people are earning enough money anymore because we'll know that everybody has enough to cover the basics. This is essentially the logical endpoint of this economic pie thinking, what I like to call economic piety. That even if you just, even if Elon Musk is creating all of the economic activity himself, as long as he's willing to mail everyone a check, we'll be okay. And in fact a lot of people would say, well, we can celebrate, right? We now we have all of this stuff and we didn't even have to do the work. But that's not how people, that's not how people operate. That's not what actually turns out to be most important in people's lives. And so not only is it sort of an implausible on affordable model. In practice, I think the bigger concern is, is the principle, the question of whether we want to move in a direction that says, "Don't worry, you're taken care of," or whether we actually want to society, and I think we need a society, where we say, "No, it is your obligation to produce, to provide for yourself to contribute." And that's where individual wellbeing comes from. That's where strong families and communities come from. And that has to be the foundation of a society that's going to be prosperous.

Brian Anderson: Well, this is what you call the working hypothesis in a sense, right?

Oren Cass: Yes, exactly. So the book is organized around what I call the, the working hypothesis, which is that a labor market that creates these opportunities for people of all aptitudes and all places to be able to support strong families and communities actually is the basis of our prosperity, especially in the long run. And so it should be the focus of our public policy. And I think the easiest way to see how that contrasts to how policy works today is again, to think about this role of economic growth, and most of how we talk about the economy today is that we assume if we get enough economic growth, then all of these nice things will follow from it. Frankly, we're seeing that that's not true. We've gotten a lot of economic growth and nice things are not necessarily following from it. And now we're not even getting much growth. And so I think you have to turn that around and recognize that it's the strong society of the productive individuals, the families, communities that create the growth, that the growth isn't what we aim for. The growth is the emergent property of the prosperous society.

Brian Anderson: How much of this, who's a geographical phenomenon, you know, that the coastal elites don't see a problem and don't really have much to do with these communities that, that have struggled even in growing economies?

Oren Cass: I think the geographic dimension is one that's been thrown into focus most recently. I think based on the way American politics works, essentially the groups that made such a difference in the 2016 election in particular, typically what we'd call the white working class, have really elevated emphasis on this to another level. Something that I try to really focus on in the book though is that we shouldn't think of this as a white working class issue-- that in fact the problems we're talking about now in that context is just the latest manifestation of the same problems we've been talking about in the war on poverty for 50 years. And the same things we've discovered don't work after 50 years of trying to raise especially inner city impoverished communities out of poverty. With this approach to redistribution, we're now seeing the same maladies spreading more broadly. Unfortunately, a lot of people are saying, "Well, let's just take the same approaches there." And so this same working hypothesis, this same emphasis on work is critical to these working class communities that are now in focus, but it's equally critical to our approach to poverty, to struggling communities, whether in the inner city or in a rural area.

Brian Anderson: Say a bit more, I realize the book is dense and filled with all sorts of policy ideas. But, but two or three that you think would be the most effective at addressing this crisis.

Oren Cass: Sure. One, one place I think we should look actually as organized labor. You know, conservatives have come to be very opposed to organized labor because the form we have in this country, born in the Great Depression, now what we call big labor, is frankly a very destructive force. But the concept of organized labor, of workers being able to organize, to act collectively, to bargain with employers, to come to a mutual each other's mutual aid, that's a tremendous thing. That has real economic value. It can help position workers and prepare them for successful careers, it can help engage constructively with employers, and it has social value. It can be a critical institution of civil society. And so I think that's something that rather than throwing away, we need to really focus in on and say, "We need everyone to agree that the system we have doesn't work." That should be something left and right can agree to at this point. But let's also agree that we want a system that works and we're willing to move reforms in a direction like what you see in Europe in a lot of cases, with what's called works councils, where the emphasis isn't on an adversarial relationship and fights about seniority and work rules and strikes. It's about actually the workers and the employers collaborating to be more productive. So I think that's one place we should look.

Brian Anderson: You mentioned education earlier.

Oren Cass: Yeah, education is a big one.

Brian Anderson: You're very critical in the book about our current trade relations with China especially. Say a bit about that because some serious reforms there may be in motion as we speak.

Oren Cass: Yeah, I think trade is an important dimension of this and it's something that this consumer welfare versus worker focus really throws into relief. You know, if economists are right that if all you care about is consumer welfare, more trade is always better. In fact, trade deficits are great. If China wants to send us hundreds of billions of dollars in stuff and we don't have to send them anything back, we can just send them an IOU, like a treasury bill or something, that's great for consumers. If you take the worker lens though and ask what's happening to our labor market and to the opportunities for productive contributions, especially from less skilled workers, that kind of imbalance becomes a real problem. And so I think it's important to recognize the problem isn't trade. You could have balanced trade that's fantastic for workers as well. The problem is the imbalances that we have in a situation where one country is focused on promoting work and creating opportunities for workers in China and one country is just trying to buy a lot of cheap stuff in the US. And so the reforms that I talk about aspire to more trade. That's what we should want, but we should insist that it's balanced. We should be ready to confront countries that are manipulating the market to their own advantage as China does and we should be prepared to invest on our own behalf. Just as we invest in national institutes of health, because scientific breakthroughs in healthcare are valuable to everybody, so we should be investing in technologies in the manufacturing sector because having a robust industrial economy ultimately redounds to everybody's benefit.

Brian Anderson: One other idea that comes up in contrast with universal basic income is the notion of a wage subsidy. Maybe you could say a little bit more about that because this is provocative but interesting and I think a useful idea.

Oren Cass: Sure. A wage subsidy is what it sounds like. It's we should subsidize work by boosting people's wages. And so in practice it can actually operate in a very straightforward manner because we already have a system to take money out of every paycheck. We have our payroll tax system. We look at how much you earned every pay period and the government takes a bunch out and it's right there on that line called FICA. We could have a line under it called work credit, that for lower wage employees in particular, puts more money into each paycheck. And so that $9 an hour job now becomes a $12 an hour job. If we did that, we would get a couple of really big benefits. One is we would make those jobs look more attractive to workers. So you can now advertise that as a $12 an hour job and that's something that's going to draw people into the labor force. The flip side of that coin is it's also attractive to employers, and this becomes politically sensitive, but I think it's important that we embrace that this benefits employers too. Now we don't want to punish and criticize and attack low wage employers. We want to recognize that operating that kind of business and creating that kind of opportunity for less skilled workers is really socially valuable. It's something we want more of. And so subsidizing that relationship to the benefit of both the worker and the employer--

Brian Anderson: It's different than the way a minimum which would work.

Oren Cass: That's right. It's almost the opposite. So if you look at the minimum wage by contrast, you could also have a $12 minimum wage to try to change that $9 an hour job into a $12 an hour job. If you do it with the minimum wage, you're essentially just ordering the employer to pay an extra $3 an hour. It's almost, you're taxing the employer $3 an hour to hire the $9 an hour worker. That's two problems. One is a fairness concern here. I don't see why, if we have a social interest in more of these jobs in supporting these workers, why that burden should necessarily fall on that employer. I think we should want that to be a social commitment that we pay for the way we pay for other things in society, through our tax dollars. And secondly, there's a very practical problem which is that whereas a wage subsidy encourages the creation of these kinds of jobs and says, this is something we want in our economy, the minimum wage does the exact opposite. It says we don't want this kind of employment. We're going to make it more costly and burdensome, and initially you might still see businesses trying to do the best they can with the constraints they're under. Over time what you would expect to see is fewer investments in that kind of economic activity. And that's something we've had over time and it's not good for the folks who need those kinds of jobs.

Brian Anderson: Thanks Oren, very much. Don't forget to check out this remarkable new book. It's called The Once and Future Worker. It's just out from Encounter Books. You can find it on Amazon, Barnes and Noble, wherever books are sold. It's a book that stands with some of the classics of modern social thought by James Q. Wilson, Charles Murray and others. You can follow Oren on twitter @Oren_Cass. We'd love, too, to hear your comments about today's episode on Twitter @CityJournal. Thanks for listening and thanks very much, Oren, for joining us.

Oren Cass: Thank you for having me.

Photo: vm/iStock

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