Harold Meyerson, in this morning’s Washington Post, writes about the growing red state versus blue state divide regarding the treatment of worker remuneration and workers’ rights. In blue states, the minimum wage is going up and union rights are largely being protected. In red states, right-to-work laws are driving wages down and busting unions. What we are seeing is a renegotiation of the social contract.
What we are also seeing is one of the benefits of America’s federal system: The states are again becoming laboratories in democracy. State and local initiatives to raise the minimum wage are succeeding while federal action is stalled. This is not unprecedented. When the nation fell into the grip of the Great Depression, Herbert Hoover promised prosperity was just around the corner. In the state of New York, the governor adopted programs to put people to work, and crafted a rudimentary social safety net. That governor, Franklin Delano Roosevelt, would replace Hoover in the White House in 1933, and the trial balloons launched in Albany became the New Deal, one of the most successful renegotiations of the social contract in American history.
Indiana tried to be a laboratory of democracy earlier this year when the GOP legislature decided to hold the line on the effects of same sex marriage, unfortunately using an especially aggressive version of the Religious Freedom Restoration Act (RFRA) as the vehicle. That experiment did not turn out so well for its authors. Intense corporate pressure was brought to bear and, within a week, the legislature had modified the state’s newly minted RFRA to make clear it could not be used to discriminate against gays and lesbians.
The legislators and the governor of the Hoosier state did not have a change of heart, they had a change of interest, and American democracy is built on the belief that enlightened self-interest can compete and self-regulate the polity so as to avoid the specter of tyranny. We know longer fear King George III, but there are other tyrannical threats to our democracy today, the Koch Brothers and the Sheldon Adelsons of the world who wish to purchase democracy by funding sympathetic candidates and enacting laws that conform to their ideological agenda. The effort to enact voter restriction laws is the most explicit, and explicitly ugly, attempt to renegotiate the social contract.
How will corporate America react to the changing, diversified landscape of worker wages and workers’ rights? Will large corporations flee the blue states and head to the red ones? I doubt it. They will, instead, put to the test Henry Ford’s belief that the way to be really successful at selling cars was to make sure they were cheap enough for the people making them to be able to afford them. In the short run, corporate profits might take a hit on account of increased payrolls but, depending on the product, corporate profits might score a win by having more customers able to afford their products.
This hoped-for outcome – that increasing the minimum wage, with its consequent rise in wages for all, leading to a more robust economy, with more widespread prosperity – will not appear over night. Most large corporations pay wages that are far above the minimum wage, but raising minimum wages always, over time, and not usually too long of a time, raises all wages. Similarly, if large corporations pay more, smaller firms have to follow suit, if not at first, pretty quickly, if they wish to continue to retain their workforce. Who knows? We may even see large corporations leading the way in finally recognizing that respecting workers’ right will, in the long term, benefit their bottom line by making sure their workers, all their workers, feel included rather than alienated.
There may be a more immediate economic impact in localities and states that raise their minimum wages: The state budgets might become more balanced. The dirty secret is that all of us taxpayers currently subsidize low wage corporations by providing food stamps and other benefits to the working poor. The less the poor the workers, the fewer benefits they will need. Fiscal conservatives might learn to like the minimum wage increases just as they have embraced, at least in Nebraska, the repeal of the death penalty not so much because they think the penalty is unjust, but because its administration is insanely expensive. Turns out mass incarceration is also a budget buster, which is why some conservatives, as well as liberals, are seeking to overhaul our antiquated sentencing requirements in the criminal justice system.
Meyerson notes that the blue states are blue, and the red states red, not primarily because of economic stratification, but for demographic reasons. He focuses on racial diversity and age, but this morning, the Public Religion Research Institute also looked at nine swing states and their changing religious landscapes. If nothing else jumps out at you when you look at those numbers, consider the fact that white Christians are no longer a majority in Virginia. Home to Jerry Falwell’s and Pat Robertson’s religio-educational-media empires, the Old Dominion looks a lot more like California than it looks like South Carolina, and South Carolina increasingly looks less like it once did.
The social contract has been frayed in the new Gilded Age in which we live. But, we have been here before. As Robert Putnam continually makes clear, America responded to the social ills of the first Gilded Age magnificently, ushering in universal high school and other reforms of the Progressive Era that made America a more just society. It is time to renegotiate the social contract again, and find news solutions for a new century. Some of those solutions are already happily being tested in the states. It is always risky to predict the future, but my money is on the blue states.
