An Economic Program for the 99 Percent

The Reimagining the Economy Project hosted a panel discussion "An Economic Program for the 99 Percent," featuring four scholars in economics and sociology. Juliet B. Schor, Professor of Sociology at Boston College;  Michael Reich, Professor of Economics at UC Berkeley; and Deirdre Bloome, Professor of Public Policy at Harvard Kennedy School, joined Reimagining the Economy Faculty Co-Director, Gordon Hanson, Professor of Urban Policy at Harvard Kennedy School. The panel was moderated by Reimagining the Economy Faculty Co-Director Dani Rodrik. Each presented a policy idea aimed at creating an economy that is more inclusive, with good, dignified jobs for all. 

Juliet B. Schor: Towards a Four-Day Workweek

Professor Schor is part of the Game Changers Project at UMass-Amherst’s Political Economy Research Institute, which aims to propose bold policies to transform the economy in favor of working people. Schor opened with her proposal for a four-day workweek with no reduction in pay. The benefits to employees are clear: more free time, or the option to take on extra work for extra pay. Schor leveraged data to argue that workers in the U.S., particularly since COVID, are in need of shorter hours: from 2021-2023, the job quits and unfilled vacancies surged, suggesting widespread burnout. And Gallup surveys have consistently clocked around 50% of American and Canadian workers as having felt “a lot of stress” during their work days, higher than any other country surveyed, tracking data showing Americans work more and take less vacation than those in other developed nations.   

Crucially, Schor bolstered her case with her own research suggesting the four-day workweek is feasible—and often beneficial—for many businesses. In a pilot with 203 companies that opted in for a six-month trial, 182 chose to continue after the trial ended, and 177 are still on the four-day schedule today.

Since these companies all opted into the program, these results may not apply to the economy as a whole. But these firms are also not unique: while Schor admitted that four-day workweek may not suit manufacturing and other blue collar industries, there are hundreds of thousands of firms that resemble the small to mid-size white collar ones in this study. (And the long-term decline of the manufacturing share of employment in the U.S. also means these make up more of the workforce than ever.)

Finally, AI's labor-saving potential makes the four-day workweek even more attractive, said Schor. As productivity rises and reduces how much labor firms need, cutting each worker's weekly hours—rather than laying some off while keeping others at full-time hours—is a natural way to share the technology's gains with workers. Said Schor, "we're thinking about things that are really good for working people, that are economically very viable…even if they may seem like pie in the sky."

Michael Reich: A Bold Economic Program for America

Michael Reich was part of a team which put together "A Bold Economic Program for America", a far-reaching proposal of numerous policies aimed at addressing issues like tax reform, affordability, and economic growth, along with estimates of the costs and benefits. For this event, he focused on one of these policies: raising the federal minimum wage to $20 by 2030. Cost-benefit analysis here estimated that the $20 minimum wage—paired with his other tax reform and affordability policy —would cost $860 billion while raising government revenues by $1.2 trillion, a $340 billion surplus over current law.

Much of that surplus comes from shifting costs off programs like Medicaid and SNAP: with employers paying more, fewer families would need them. Reich also argued the living wage is more politically compelling than the existing safety net: "those have been kind of seen by a lot of people as, well, that only helps poor people, or there are a lot of people who are on those programs who can work but don't…it's wrong but nonetheless it's true that a lot of the working class have shifted…on this one issue."

Reich's research also shows that minimum wage hikes need not reduce employment: in California, an 80% increase to $15 raised earnings without causing unemployment. This matches what economic theory predicts when it is difficult for workers to find or switch jobs—in such labor markets, employers can hold wages below what they would be under genuine competition, so a minimum wage simply pushes pay back toward that competitive level without forcing layoffs.

Gordon Hanson: Community Colleges and Workforce Development

Hanson made the case for community college and workforce development programs that help workers transition after layoffs and other economic shocks. Workers who lose good jobs rarely find equally good ones; more often, they "occupationally downgrade" to less skilled work and lower wages. Specialized training programs can soften that blow—and when many workers in the same area lose jobs for correlated reasons, can help whole communities.

Hanson's two-part proposal is modeled on Denmark, which he joked is "this impossible standard to which no (other) countries… have succeeded in attaining"—though, he added, "it is attainable." First, "tune" unemployment insurance so benefits rise with local unemployment. When jobs are scarce, expanded benefits prevent workers from "falling off a financial cliff" at relatively low cost—and have little effect on job-search behavior, since the limiting factor is the availability of jobs, not people's willingness to work. Second, expand access to community college workforce development programs, which raise wages persistently by up to 20% for the relatively few workers who currently attend.

Hanson called his "much smaller" policies that "could be part of either party's next presidential platform"—largely because "we already have all of the implements in place." Community colleges exist nationwide; the task is helping them scale training during shocks and quickly retool offerings to match local labor demand. Worse, their funding tends to track local tax revenue, leaving them short precisely when extra spending would do the most good. Counter-cyclical policy can reverse that. Still, Hanson warned, "none of this works unless labor demand is there"—so programs that stimulate job creation through transfers or well-crafted investment incentives in low-income communities also have a necessary role.

Deirdre Bloom: A Wider View

Rather than a single policy, Bloom proposed restructuring how we think about economic policy itself, organized around three concepts:

• Embeddedness — the idea that "we live our lives together," producing spillover and multiplier effects worth leveraging. A policy example is multi-generational policy, where transfers to parents also aid child development through the spillovers of a shared household.
• Responsibility — what different classes owe one another and what the government owes its people. A concrete example of this is more progressive taxation, in which we collectively agree the wealthy owe the poor and the government a larger share of their income.
• Vision — the recognition that we "face an uncertain future," and the discipline of debating big-picture goals before settling on tactics. Bloom drew a distinction between tactics—the specific policy proposals on offer plus the political coalitions needed to enact them—and strategy, the larger goals tactics are meant to serve, like shared prosperity, freedom, justice, or democracy. These goals are contested, and people disagree about what "justice" even means. But the debates are essential to have, Bloom argued, because without a well-formed strategic vision, lasting and significant change is even more difficult to attain. The discrete takeaway here is less a policy than a practice: making explicit space for that strategic debate, since without it, tactical wins don't add up to meaningful change.

More than any specific policy, then, Bloom's talk was an imperative to take a wider view of how we design policy in general—a cohering conclusion to this wide-ranging event.