Jobs vs. Poverty

Texas is great at creating jobs. But many workers in the Dallas area work full time and are still in poverty. What changes, if any, should Texas lawmakers consider to address this?

This question, I think more than any, gets to the heart of why I am running for office.  While on the campaign trail I talk about the need to address structural issues in our government and economic systems.  For the most part, today’s policy proposals consist of using existing tools to extract an outcome, rather than examining the effectiveness of those tools or suggesting alternatives.  For illustrative purposes, let’s consider the most popular Democratic policy toward increasing wages, which is increasing the minimum wage. This proposal is not a plan for structural change but rather simply a policy for the current system.  (Just a brief note: this is baseline Democratic policy but Republicans have theirs as well, such as tax cuts.)  So one possible reason these policies may not be effective, is that they do very little to change the core structure of our economic system.  So, let’s walk through this a bit. If we increase minimum wage, business owners, who employ minimum wage workers, will raise prices as much as possible. These owners will also likely either freeze hiring or reduce labor and ask remaining workers to work harder.  Now owners will do this because their end objective is to make as much money as possible. Thus, the result is some combination of the following: those who are employed will likely work more for a higher wage, that wage may or may not buy more, depending on the increase in prices, and the owners will minimize the impact of their profits. Just a quick pause here. While it may seem easy to label the “owners” above as bad actors, consider that those owners work in multiple business models, some of those models put out significant profits, others very little profit.  So, let’s briefly go down this path a bit. For those businesses that make small profits but who cannot raise prices, they may find their businesses can’t compete. These companies may have to face the prospect of closing.  For those with larger profits, the thought may be that at least those folks will pay higher wages and prices; but consider they were already making excess money, so they are in the best position to absorb increased prices as opposed to workers who may face little real benefit as their increased wages will be used for increased prices.

 

Thus, taking a step back, we put forth a policy that shifted money (increasing minimum wage) through an existing economic machine that had mixed results; increased wages but also prices. Structural change says, let’s look into the machine first. Is this machine working the way we want it to, for its intended purpose? To put it differently, it does no good to propose public policy such as a minimum wage or conversely some “trickle down” tax cut to spur wage inflation, when the current structure of capitalism says the effectiveness of such policies is dictated by private sector behavior.

 

Beyond looking at only one system, a structural approach would look to see how the interactions of multiple systems affect the overall effectiveness of systems.  So, for example, if it was determined that structural changes were needed in our system of capitalism to effect change on depressed wages, a structuralist approach would ask whether our current form of democracy was conducive to creating that change.  At first glance, it appears there is structural change that needs to take place on our system of democracy as well.  For example, gerrymandered districts that force wedge narratives and create legislative gridlock, seem like a barrier to making any change, let alone structural change.  Similarly, the current system of campaign finance and lobbyist infrastructure would seem to maintain the current structure of capitalism, rather than be conducive to making structural changes. Likewise, even something as obscure as low citizen engagement via increased apathy or dejection, can be evaluated as a threat to the system of democracy and by extension, a barrier to making structural changes to other systems such as capitalism.

 

I think it is also important to consider that these systems have evolved more than they have been invented.  Thus, proposing structural change means advocating for moving systems that evolved over a multitude of years. Bottom line, it is hard. For those of us advocating structural change, we will have to build a compelling argument that doing so helps to preserve our core systems over the long term.  The structural solution set will have to be broad based, multi-disciplinary, with nothing left on the table.  We will have to examine corporate governance, our monetary system, legislative structures, taxation systems, and citizen participation, to name a few.  So in the case of wages, we will have to facilitate comprehensive structural change. The failure of our systems to provide sufficient employment or sufficient wages for a broad cross section of our population can cause instability and makes all systems unsustainable.  Taken from a high level, we should understand that our work in the public sector is to provide systems for civilization building. 

 

If there is any solace to be taken in this endeavor, it is in the fact that as a country we have been here before.

 

Kennedy in his 1961 inaugural address stated:

 

In the long history of the world, only a few generations have been granted the role of defending freedom in its hour of maximum danger. 

 

I cannot help but feel our generation has been granted this role, but beyond external threats to freedom, our greatest threats may be the structure of our most sacred institutions.  We must continue the work of our founding fathers and engage age old questions in the context of modern realities, from technological disruption to climate change.  As we engage in this discussion, let there be no doubt many will claim institutions can’t be modified.  They will tap into the apathy and disillusionment of a few, to claim simple postcard solutions to complex problems, all the while distracting with visions of past greatness, void of context or the truth of struggle.  To them I say heed the words of Thomas Jefferson:

 

“no society can make a perpetual constitution or even a perpetual law. The earth belongs always to the living generation.”