An Economic Bill of Rights for the 21st Century

Economic mobility has drastically declined since the 1940s. Unemployment and underemployment are persistent problems, especially for stigmatized groups who are subject to discriminatory exclusion from employment opportunities. In today’s economy, the American dream is just a dream, or worse, a rhetorical device that draws attention away from the economic reality playing out across the country. Despite long-term growth in the nation’s Gross Domestic Product, in real terms middle-income Americans have less than they did 40 years ago. Poverty, especially amongst the most vulnerable in our society—our children—persists at unjust levels. Despite President Lyndon B. Johnson’s War on Poverty, declared more than 50 years ago, 43.1 million Americans remain in poverty, nearly 20 million of whom live in deep poverty. There’s no question that past policies intended to reduce poverty and inequality have fallen tragically short.

It's time to think big. The rules that govern our economy are working best for far too few, at the expense of far too many. While Republicans have sought to dismantle the New Deal and the regulatory apparatus that was developed to protect Americans from an unfettered private sector, Democrats in recent decade have mustered no more than incremental changes to an increasingly unequal and unfair economy. The rise of Donald Trump provides a political lesson for both Democrats and Republicans: People are looking outside the box. Despite the vast gulf between the two major political parties on many issues, on fundamentals both have adhered to a neoliberal agenda of deregulation, reliance on market-based solutions to our social problems, and a devolution of the role of government in ensuring and enforcing Americans’ right to a decent standard of living, economic dignity and economic mobility.

Direct government intervention for full employment, a cornerstone of the Democratic Party Platform for almost half a century, has been all but forgotten, replaced by a commitment to market liberalization or tax incentives and other subsidies for corporate America to cajole them into hiring more workers. Policies put forth by Hillary Clinton in 2016, which included raising the minimum wage and promoting equal pay for equal work for women, would have improvde the lives of many working Americans – but they do not go nearly far enough. They do not address the fundamental problem of increasing risk and vulnerability—employment “precarity”—confronting the American workforce.

Let us be clear: Our economic reality is not mere circumstance; these are the result of policy choices.

We envision moving far beyond marginal or incremental steps. We envision reforms aimed at building an inclusive economy that works for all, enshrining a national obligation to provide every American with economic security and opportunity. While many will spend the next four years fighting the Trump administration in an attempt to preserve the limited economic and civil rights that still remain unequally distributed, we want to build a real alternative that will produce fundamental change.

We want to resurrect a bold idea, an Economic Bill of Rights for all Americans—more specifically, an inclusive Economic Bill of Rights tailored to the conditions of the 21st century.

In his groundbreaking 1944 State of the Union address, President Franklin Roosevelt called for an expansion of the Bill of Rights to recognize economic rights as well. “Necessitous men,” Roosevelt observed, “are not free men.” Those “who are hungry and out of a job are the stuff of which dictatorships are made.” Moreover, real freedom, freedom to “pursue happiness,” he said, required a “second Bill of Rights under which a new basis of security and prosperity can be established for all.” For Roosevelt, full citizenship demanded more than the political rights designated in the nation’s original Bill of Rights: It required economic rights. Roosevelt outlined those rights as follows:

1. The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.

2. The right to earn enough to provide adequate food and clothing and recreation.

3. The right of every family to a decent home.

4. The right to adequate medical care and the opportunity to achieve and enjoy good health.

5. The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment.

6. The right to a good education.

Roosevelt died before he could begin a national movement to enshrine these economic rights as a constitutional commitment. In subsequent decades, though prominent politicians and civil rights leaders continued building on Roosevelt's pursuit of economic justice. Seeking to extend the scope of the Civil Rights movement in the mid-1960s, A. Phillip Randolph, Bayard Rustin, and the New Deal economist Leon Keyserling drafted “Freedom Budgets” that recognized that poverty remained a great barrier to opportunity and expressed the need for strong federal action to bring economic equity to all Americans. Martin Luther King Jr. joined this campaign for jobs, education, health care, housing, and income for all Americans, and before he was assassinated, he planned a new march on Washington, the Poor People's Campaign of 1968, to demand economic rights for all, linking the civil rights movement directly to a movement for economic rights.

Today, how far we still remain from anything that resembles equality as fact and result.

We need to rethink public policies, breaking out of the straightjacket that overemphasizes market-based solutions. We have thought big before—but have compromised big as well. During the Great Depression, FDR and liberals made a Faustian bargain with southern segregationists to provide a New Deal and beyond, rewriting the rules of our economy. But only for some of our citizens. Ira Katznelson’s excellent book When Affirmative Action Was White: An Untold History of Racial Inequality in Twentieth-Century America documents how U.S. public policy implicitly and sometimes explicitly excluded black people from opportunity during the so called ‘golden age’ that followed. The racial apartheid that existed under slavery war renewed under another name—Jim Crow—for decades. The exclusions from the guarantees of the New Deal contributed to the highly unequal outcomes we observe today.

Today, we must transcend the racial, ethnic, and regional divisions exacerbated by post-Depression and post-World War II-era policies by building universal policies that are cognizant of identities and intersectionality, and inclusive of race, gender, nationality, sexuality, and ability.

The first six rights outlined by FDR above are still all too germane today, but to update these economic rights to facilitate an inclusive economy for the 21st century, we add:

7. The right to sound banking and financial services.

8. The right to a safe and clean environment.

9. The right to a meaningful endowment of resources as a birthright.

Let us briefly explore each of these rights—those proposed in 1944 and those we're proposing now—in turn.

The Right to Employment

As a onetime centerpiece of progressive politics, a Federal Job Guarantee received tremendous support from the likes of Eleanor Roosevelt, Martin Luther King, and civil-rights leader Bayard Rustin. The provision of a job for all was central to the Freedom Budget, crafted for the A. Philip Randolph Institute in the wake of the 1963 March on Washington. (Let us not forget that the march—chaired by Randolph, organized by Rustin—was named “The March on Washington for Jobs and Freedom.”)

Today, despite the recovery from the Great Recession, the problem of inadequate employment continues to plague our society. Not only are there millions more Americans seeking jobs than there are available openings, but many Americans who are working remain in poverty because of woefully inadequate wages.

These conditions warrant the resurrection of a bold idea, an Economic Bill of Rights for all Americans, tailored to the conditions of the 21st century. Below, we turn our attention to the first article of a new Economic Bill of Rights—a federal job guarantee.

Why the need for such a guarantee? First, we invariably have major economic crisis that drive people out of work; the most recent episode is the Great Recession. Second, even in “good” economic times, the United States has more people seeking employment than the private sector is willing to employ. And third, not only do we generally have an inadequate number of jobs, but we have a tier of jobs that are of extremely low quality. They are low-paid, have uncertain hours, and have few or no benefits.

What the nation needs is a program, established through federal legislation, that would guarantee employment to every American at non-poverty wages.

Similar legislation to what we envision has already been introduced to Congress (House Resolution 1000 - Jobs for All Act, which has 29 co-sponsors). In our proposal, we would first establish the National Investment Employment Corps (NIEC), a permanent agency to oversee direct employment of all Americans seeking a job. If individuals were unable to find adequate employment in the private sector, they could turn to the government for employment. In return, the government would provide employment at non-poverty wages. The minimum salary would be at least $24,600 per annum. Advancement in the program would be possible, resulting in a mean salary of $32,500.

Provision of a reasonable floor for compensation in the labor market must be a critical feature of the program. If employers are unwilling to provide employment, or are offering terms inferior to those offered under the NIEC, individuals can simply take the public sector job. However, to provide genuine economic security, workers will need more than a non-poverty wage—they need benefits. The program will include health insurance for full-time workers (35-40 hours per week) of the same quality that is received by civil servants and elected officials in the federal government.

Such a program, which will transform the labor market as we know it, will come with a price tag. We estimate that the federal job guarantee, inclusive of total compensation, training , and materials, will have an annual cost of about $575 billion , which is nearly 3 percent of GDP. But that will not be the net expense of the program. Since the program functions both as a full employment and as an anti-poverty program, a portion of the expenditures the United States currently devotes to a variety of entitlement programs could be reduced significantly. This would include lower expenditures for unemployment insurance, SNAP, or other types of means-tested social programs.

Moreover, it is not extraordinarily difficult for governments to fund large-scale programs. The fact that at the outset of the great recession, huge amounts of public funds quickly were turned over to the banking community, suggests that there is a huge capacity on the part of the federal government to meet large, new expenses. A federal job guarantee would enable the nation to fund the well-being of all of our citizens, rather than support, narrowly, the folks who produced our most recent economic crisis.

How would the program function? The NEIC would be housed under the Department of Labor and administered by the Secretary of Labor. If individuals want a job, they simply could go to reconfigured unemployment offices. Under the job guarantee, those offices would become, literally, employment offices; where any applicant could get a job on demand.

The specific types of work undertaken in the program would be developed in conjunction with local and state governments. The needs of a rural community in West Virginia may be different from the community needs in the city of Milwaukee. Local and state governments would work with the federal government to develop jobs that would serve the needs of specific communities while taking into consideration what would be appropriate for workers in need in the region. Ultimate administrative authority and funding would be provided at the federal level, and priority would be given to the most distressed communities and to infrastructure projects in areas with the most need.

We envision an array of jobs that would address both our nation's physical and human infrastructure needs. Such a program could rebuild our crumbling roads and bridges, and they also could provide vital services, like elder care and child care. Imagine if the government mobilized resources to provide universal, high quality elder care. Its positive impact would not be limited to the direct recipients of the service, but it could also reduce dramatically the stress, time, and monetary expenses now borne by relatives who now have to provide or pay for all of the care work themselves.

Additional socially beneficial goods and services could also be provided through the program. For instance, this map by the Living New Deal project highlights the outstanding accomplishments achieved through direct employment projects during the New Deal, many of which still improve our lives today.

Beyond building roads, bridges, schools, and other public infrastructure, the program could also play a fundamental role in transforming areas of our economy, hastening, for instance, a transition to a “green,” decarbonized economy.

One of the major benefits of such a program is its transformative effect on the U.S. economy away from low-wage work toward decent jobs for all. The program will reshape the power dynamics between labor and capital, enabling workers to have more bargaining power by removing the threat of unemployment. This will likely lead to a shift in the income away from capital towards labor. As a result, corporations and their shareholders do stand to incur a loss on that score.

On the other hand, the federal job guarantee will reduce business costs by extending and maintaining the nation's human and physical infrastructure and creating greater stability of demand for the products of America's businesses. Both of these effects will benefit the private sector's bottom line, providing at least a partial offset to the impact of the job guarantee on labor's bargaining position.

The Right to Housing

Shelter is a basic need for survival, yet it is one many Americans cannot attain. The current federal minimum wage, $7.25, places affordable housing out of reach for most such workers across the county. According to the National Low Income Housing Coalition, a household whose occupants earn the minimum wage would need more than one full-time-wage worker to afford a two-bedroom rental apartment at fair market rent.

This is not only a problem for low-income Americans. At least 90 American cities have a median rent, excluding utilities, that comes to more than 30 percent of median gross household income. In short, these are rent-burdened cities. Across the country, half of all renters are now spending more than 30 percent of their income on housing. A recent Housing and Urban Development report found that there are 7.7 million American households that are extremely rent burdened, paying more than half their incomes for rent, and that are either not receiving government assistance and/or live in severely inadequate conditions.

With over 17 million vacant housing units, perhaps we also can design innovative policy measures to provide housing for the roughly 565,000 homeless Americans. The U.S. doesn’t need to reinvent the wheel to address this concern. Other countries, such as Singapore, have had relatively successful national housing policies, resulting in 90 percent home ownership rates.

The Right to Health Care

The Affordable Care Act provided millions with health insurance, driving down the uninsured rate to 9.2 percent, the lowest rate achieved in U.S. history. But the ACA was a grand compromise between the Democrats and corporate interests. While the ACA expanded coverage, improved access to contraceptives, ended some harmful practices by insurance companies, and drove down inflation in the health-care sector, it left far too many without coverage or with inadequate coverage.

Most Americans want a still more inclusive and accessible system

; according to a Gallup poll, a majority endorsed replacing the ACA “with a federally funded health care system that provides insurance for all Americans.” Other than Mexico, the United States is the only OECD country without universal coverage. A Medicare-for-All type program, like the one put forth by Senator Bernie Sanders, would certainly fit the bill. His American Health Security Act would provide every American with affordable and comprehensive health-care services through the establishment of a national American Health Security Program.

We can, and we should, discuss the details of how to best achieve universal health coverage, but true universal coverage, says Harvard's Adam Gaffney must include, “universal coverage (i.e. none left uninsured or uncovered), the elimination of financial impediments to care (i.e. no copayments and deductibles), comprehensive coverage (including services currently uncovered or poorly covered in the U.S.), and no inferior “tiers” of access for particular economic or demographic groups.”

The Right to Quality Education

Universal access to a high-quality public education, from Pre-K through the completion of a college degree, needs to be a right, not a privilege. While the right to an education is enshrined in many state constitutions, access to education remains separate and unequal at every stage of the system, denying many children and young adults the human right to develop their intellectual capacity.

While universal pre-K childcare has been a demand for decades, it has yet to become the law of the land.

Many forget that such a program was within our grasp not too long ago. In 1971 Congress passed the bipartisan Comprehensive Child Development Act, which would have established nationally funded comprehensive child-care centers that would educate, feed, and care for the young, only to see it vetoed by President Richard Nixon. And so, instead of federally subsidized universal daycare, which would provide working families with necessary financial relief and enable women to enter the workforce, we get our current system—a system that is fraught, expensive, and “mediocre” at best. Today, daycare exceeds the cost of a public college education in many states. Those in the nation’s capital suffer in particular under the financial burden of child care, paying an average of $22,631 a year, according to the Economic Policy Institute. Despite extensive research highlighting the social and personal gains from investing in early childhood programs, the government has continuously failed to act.

Unequal access to education continues once children enter the public school system, the result of school segregation and segregated education in desegregated schools. When compelled by courts to desegregate, schools have relied on other institutional responses to maintain unequal access to quality education, such as racialized tracking. It’s time to eliminate such tracking and provide gifted and talented education for all students. Project Bright Idea, a pilot program devised by North Carolina educators and experts at the University of North Carolina Chapel Hill and Duke University found that treating students as gifted and talented yields “impressive academic results.” Further, case studies across the nation find that achievement amongst “low” achieving students improves while the performance of “high” achieving students remains constant when all students have access to a high-level curriculum. Such a move would be a major step towards ensuring that access to a quality education is no longer severely unequal.

Come time for college, kids still don't get a break. Higher education policy places roadblocks in the path of far too many. The average $71,086 price tag for higher education at a four-year public institution is already well beyond the reach of most middle-class families. The right cost, at the point of delivery, for students at public colleges and universities should be $0. Students are demanding education as a right, not a privilege reserved only for those born into selective families that can afford it. Americans agree. Over 60 percent of Americans in a 2016 poll conducted by Princeton Survey Research Associated supported free college at public colleges and universities. It also happened to be one of the most popular proposals to emerge during the 2016 Democratic presidential primaries.

Providing universal tuition-free higher education could benefit historically educationally disenfranchised groups the most. The average college debt for African American bachelor degree holders is $37,000, compared with a $28,051 average for white graduates. The total burden of student debt has grown to an outrageous level—$1.48 trillion and counting—fueled largely by a pernicious profit motive in educational finance. We estimate that, amongst those currently enrolled, tuition-free public higher education could add a million additional black and Latino graduates, return public education to its former status as a public good, and extend it to those who have largely been excluded in the past. While education is no silver bullet to ending inequality, it should nevertheless operate as a right, instead of a debt-riddled privilege.

The Right to Sound Banking and Financial Services

Wall Street profit incentives are often not aligned with Main Street economic development, and nor are the more conservative Federal Reserve's financial policies, such as the Fed’s staunch opposition to full employment. We must offer an alternative to the predatory nature of the current system of finance. The financial system has continued to redline opportunity in this country, particularly for financially vulnerable groups who have been deprived from asset-development by the banks’ policies of housing discrimination, limited or high cost basic banking services, last resort exploitive lending practices (such as payday lending), and the pushing of subprime loans even on creditworthy Latino and black borrowers.

Recent estimates indicate that 20 to 40 percent of the U.S. population relies on some form of non-traditional financial services, such as payday lending, which disproportionately preys on vulnerable and low-income Americans. Moreover, 53.6 percent of black households and 46.4 percent of Latino households are unbanked or underbanked, which is likely related to the high costs of banking for low-income individuals and the scarcity of banks operating in black and Latino neighborhoods.

A recent US Postal Service report found that the average underserved household spends almost 10 percent of its income on alternative financial services and interest. Converting one’s paycheck into cash should not bear a penalty, particularly for those with limited resources.

There are currently 53 million “credit invisible” households in the United States

—households that do not frequently participate in forms of financial services that the major private credit bureaus incorporate in credit scores. This “credit invisibility” results in the further marginalization of this group, limiting access to credit and employment, and increasing costs associated with financial services. According to the think tank Demos, while most low-and middle-income white households with credit card debt report good or excellent credit, the opposite is true for African Americans. Further, evidence from the Federal Reserve indicates that less than one quarter of blacks reported prime scores, compared with roughly 65 percent of whites. As a result, blacks are more likely to receive sub-prime mortgages and pay more for accessing other financial products such as car loans. This need not be the case.

A public option for banking and basic financial services could provide all Americans with the right to a minimum, non-exploitative standard of banking and financial services. Like the job guarantee, public banking would generate a floor in the financial sector—if private banks don't provide services at least as good as those provided by the public option, we expect consumers to close their accounts at private banks and choose the public banks.

Public banks are not a new idea. In 1910, Republican President William Howard Taft introduced the U.S. Postal Savings System to fight against the predatory-lending practices of the finance industry at the time, providing Americans an alternative that they could trust. This system functioned till 1966, when the banking lobby helped convince lawmakers to end the public option for banking and financial services. One state, North Dakota, still operates its own public bank. The state uses tax revenues to fund the bank, providing high-quality loans to farmers, students, and local businesses. Other countries, including Japan and Germany, currently have more extensive public banking options, and Germany’s municipal banks are a chief source of funding for that nation’s thriving small-and-medium-sized manufacturers.

One approach for public banking is to revive the postal banking option. The US Postal Service already provides alternative financial services via money orders (to the tune of $21 billion in 2014). In a recent white paper, the office of the USPS Inspector General noted that “while banks are closing branches all over the country, mostly in low-income areas in both rural communities and inner cities, the physical postal network is ubiquitous.” A postal bank in the U.S., including workers from the FJG program, can bring banking services to the unbanked while providing an important revenue stream for the USPS.

To provide Americans with access to reasonable financial services, another reform would be to federalize the credit score industry. Credit reports and scores have a direct and growing impact on Americans' economic security and opportunity. Credit scores, which in theory represent the “credit worthiness” of consumers, are used to govern access for a range of basic economic needs—ranging from a car loan, to a lease on an apartment, to a job. These scores function in part as a gatekeeper to credit, which is central in today's economy to build wealth and fully participate in the economic system. However, the credit scoring system has long been opaque and deeply flawed. Something as influential as a credit score in determining life outcomes should not be left in the hands of the for-profit, unaccountable private sector.

The Right to a Safe and Clean Environment

The environment is perhaps our greatest inherited collective resource. Yet like income and wealth, this resource—our planet and its environment—are not shared equally. The link between environmental quality and economic inequality is clear. This was elucidated in a memo by Lawrence Summers, then the chief economist of the World Bank, which stated “the economic logic of dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.” The same logic has been applied to the lowest income counties in the United States. We do not accept this logic.

Our environmental policy should protect Americans against this logic, as well as assaults on the environment such as those waged by the Trump administration. As the Federal Water and Pollution Control Act makes clear, water quality should “protect the public health.” Clean water and clean air should not be something Americans need to purchase—rather they should be rights, provided to all.

In 1994, President Bill Clinton signed Executive Order 12898, which ordered federal agencies to identify and rectify “disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low-income populations.” Despite this landmark victory, the racial and income-based pollution patterns and health disparities associated with exposure to environmental hazards remain prevalent. Researchers at the Political Economy Research Institute released a report identifying the Toxic 100—the top corporate air and water polluters across the country. The verdict? The “logic” of dumping on the poor and vulnerable racial/ethnic groups persists.

The ongoing Flint water crisis is only one tragic example. In Flint, decisions made by local and state authorities demonstrated that money and power matter more than public safety and human lives. A right to a clean environment for current and future generations is needed. That requires a rapid transition away from fossil fuels in the face of climate change—the greatest threat we have faced collectively as a species. The #KeepItInTheGround campaign is just beginning. A clean and safe environment should not be commodified, something we put up for sale to the highest bidder or the one with the most connections. Instead, we need to enshrine a mechanism that provides a clean and safe environment as a basic human right.

The Right to Seed Capital to Build a Lifetime of Asset Economic Security

The reports keep stacking up—income inequality has been growing rapidly since the late 1970s.

The degree to which income is unequally distributed is shocking—yet income is less unequally distributed than wealth.

Wealth is a paramount indicator of social well-being. Wealth—what you own minus what you owe—is critical to the economic security of Americans. With almost half of all Americans unable to afford an emergency expense amounting to $400, the average household is not resilient to economic shocks.

Recent research by Emmanuel Saez and Gabriel Zucman at Berkeley found that the top one percent of Americans held 42 percent of all wealth in 2012, with the top 0.1 percent holding 22 percent. Disparities are especially pronounced between races. The legacy of chattel slavery, where black people were literally a form of wealth for whites, and the discrimination encouraged and perpetuated through public policies, have left black families with minimal wealth. A report by the Center for Global Policy Solutions, entitled “Beyond Broke: Why Closing the Racial Wealth Gap Is a Priority for National Economic Security,” concludes that “[f]or every dollar in wealth held by whites, African Americans and Latinos held only 5 and 6 cents respectively.” In our in-depth study of The Color of Wealth in the Nation's Capital, we find that white families have 81 times more wealth than black families in Washington, D.C. A new collaborative study from the Samuel DuBois Cook Center on Social Equity and Insight: the Center for Community and Economic Development finds that single older black women with a college degree hold a mere $11,000 in wealth to deal with their retirement, in comparison with similarly educated older white women, who have a median wealth of $394,400.

Conventional explanations of wealth disparities, relying on rhetoric around the dysfunctional behavior of blacks and their lack of education or financial literacy, simply do not hold up. Given the importance of wealth in determining life outcomes, public intervention is needed to address unjustly created distributions. One such solution, “baby bonds” would seed every American at birth with an initial endowment to be held in trust until adulthood. The program would be universal, through which every newborn would receive an account, starting at around $500 for those born into the most affluent families and progressively rising to $50,000 for children born into families with minimal wealth. The accounts would be accessible when the recipient reaches adulthood and used for some asset enhancing endeavor—a down payment for a home, say, or capital to start a new business. Estimates show that the cost of the program would amount to about 2 percent of federal spending. If the average account is established at around $20,000, the cost to the government would not exceed $90 billion a year inclusive of administration costs. While that may give some sticker shock, keep in mind the relative size of other asset development programs cost much more. Capping the mortgage interest deduction would be much more than sufficient to cover the cost of the new program.

Looking Forward

Many may question in this time of “resistance,” if this is the right time to fight for an expansion of economics rights, but no one wins anything of consequence by simply playing defense. Maintaining the highly unequal and unjust status quo is neither sufficient nor sustainable. We need to take aggressive measures to achieve economic justice.

A bold alternative is in order. Implementing an Economic Bill of Rights for the 21st century would restore economic, social and psychological balance—and dignity—to the millions of Americans who have been left behind in our highly unequal economy. It also will address the long-standing unjust and discriminatory barriers that keep members of stigmatized communities from prospering. We can no longer accept the redlining of opportunity in America.