On December 10, OBI hosted the third Toward Belonging digital dialogue series consisting of a discussion about the possibilities and potential of an economics based on belonging.
Representative democracies have seen the liberal post-war consensus challenged by various forms of populist, nationalist, and breaking politics. The United States offers a troubling display of deep polarization while Europe offers a set of fragmenting and dissenting societies. The debate around these deep divisions has too often pitted cultural vs economic explanations.
In this webinar, panelists explored the potential of the role of economics in creating belonging in and across national and local communities and groups.
The discussion centered around Martin Sandbu's recent book, The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All. Martin is economics writer for the Financial Times and author of its "Free Lunch" weekly newsletter on the global economic policy debate (sent out by lunchtime in Europe).
Speakers who joined Martin in the conversation included:
Simon Reid-Henry, Director of the Institute for Humanities and Social Science at Queen Mary University of London, Counterpoint Associate, and author of Empire of Democracy.
Rachelle Galloway-Popotas: Good evening, good afternoon, wherever you’re joining us from today. Welcome to our Toward Belonging livestream event. My name is Rachelle Galloway-Popotas and I work for the Othering & Belonging Institute at the University of California in Berkeley. So I want to welcome you all on behalf of all my colleagues at the Othering & Belonging Institute, as well as our Toward Belonging partners, More in Common, the Global Policy Center of Queen Mary University of London, and Counterpoint UK, whose director Catherine Fieschi curated this conversation and who I will have the pleasure of introducing in just a few minutes.
Rachelle Galloway-Popotas: But first just a little bit about Toward Belonging - this is a pretty new effort in the European region. We’re a networked initiative bringing work and stories research and ideas and people together across different geographies and sectors to both explore and elevate the question of belonging, which we think is a crucial one to inform our world today. But especially the world we want to build and see in the future.
Rachelle Galloway-Popotas: So I’m willing to bet that many of you that have joined us today are doing work in various sectors in your communities and institutions of working to make the world a more fair and inclusive place. We’d love to hear where you're from if you'd drop that in the chat message, wherever you’re joining from. And building a world that is more built on compassion and cares for everyone and has the right to participate and belong.
Rachelle Galloway-Popotas: Part of the connective tissue that’s bonding this work together is that we really believe that being in alignment and in relationship and in deep engagement with each other is going to make all of our work stronger and allow us to scale up our work with the urgency and depth that we think the world needs today. And so one of the things that we're doing as part of the Toward Belonging is we're commissioning ideas in the European region on belonging. I think you can see our call for papers here on the screen. And so please, if you have ideas on belonging in Europe, submit a short abstract. It's very short.
Rachelle Galloway-Popotas: By the end of this month. It's a very simple form we have and we would love to hear your ideas. We often ask who belongs, who decides, who gets to decide, and who gets to participate. And so to those are the framing questions and you can find out more on our website about the call for papers and ideas.
Rachelle Galloway-Popotas: So in that spirit of engagement and co-creation of belonging, we're happy you're all part of this space today and your contributions will help us shape not only the work we're doing but this conversation today as well. So if you want to converse with us today, drop a comment, question, feedback in the chat box on Facebook or YouTube, wherever you're joining from. And we'll be getting to those later in the conversation today. If you're joining by Twitter, you can tweet to #towardbelonging or find our Twitter handle @towardbelonging. And we also have live captions in English on our website that should appear if you're on the screen where you can go if you need that. This video will also be recorded and transcribed for later viewing or if you have the leave you can go back and view it later.
Rachelle Galloway-Popotas: So again, thank you, and without further ado I want to turn it over to Catherine Fieschi. Catherine has brought together this dynamic panel and curated this conversation and she's going to introduce everybody that's with us today. A little bit about Catherine, she's the director of London Based Think Tank Counterpoint UK. She is a brilliant scholar on issues of polarization, as well as belonging and inclusion.
Rachelle Galloway-Popotas: Her most recent book is Populacracy, which I want to give a shout out because I've learned a lot from this. And I've learned a lot from Catherine and I'm really looking forward to learning from her and everybody else here today. So thank you again. And I will turn it over to Catherine.
Catherine Fieschi: Thank you so much. Thank you Rachelle and thank you to everybody who is joining us, wherever you are, we're really happy to have you with us. I have to say I'm really very happy to be having this conversation. It's a conversation that I've been wanting to have for a long time. It seems to me it's also a perfect time for it here in the UK. We are entering the last days of negotiation around the Brexit Deal, or no deal for that matter, and I know obviously in the U.S. these are the last days of the Trump administration.
Catherine Fieschi: I think it's a good time to ask ourselves basically how we found ourselves in these positions in 2016 and whether in fact we've diagnosed if you like the ills that ailed us and that drove quite a few of our compatriots to choose these options. And by diagnosing it properly, by holding it up to the light in the way that Martin has done - and I'll say a few more things about this in a minute - maybe we can make sure that we get it right the next time, that we improve the political, the social and the economic offer of those around us, in order to avoid this kind of political expression.
Catherine Fieschi: I think that I'm particularly interested in having this conversation around The Economics of Belonging because as somebody who's spent quite a bit of time working on populist politics, you can summarize in the sense the conversation over the past five, ten years, but certainly over the past five years as a conversational tug of war between those people who argued that actually those who voted for Brexit or who voted for other poppist options in Europe or who voted for Trump did so because of a sense of fragile identity that they were feeling culturally excluded. And then there was a parallel argument that made the point that perhaps you know, this was more economic exclusion rather than cultural exclusion. And I think that basically, we've been talking about past each other.
Catherine Fieschi: And this is why I wanted to have this discussion with Martin Sandbu around his latest book because he makes the most sophisticated and the most comprehensive argument about how exactly economic changes, economic drivers, economic dynamics, and economic exclusion give rise to psychological, social, and political behavior that we can qualify as often as populist. I've had the pleasure of working with Martin in the past.
Catherine Fieschi: I’ve had the privilege of him writing some essays for us at counterpoint, for counterpoint. But we're here today to discuss his book The Economics of Belonging, a radical plan to win back the left behind and achieve prosperity for all. It's both an analysis and as you can tell from the title very much a manifesto for how to get this right for the next era and for the next era of democratic globalization, better redistribution, and in a sense to explore what makes for economic solidarity, what makes for economic belonging.
Catherine Fieschi: It encourages us, I think - in terms of the work that we're doing through these toward belonging webinars and dialogue - it encourages us to examine all different aspects of belonging and therefore all different sorts of aspects of community. Which I think is absolutely crucial. So I'm going to hand it over to Martin. Martin is the author of this brilliant book. I cannot recommend it enough. It's beautifully written and beautifully argued. He is the European economics commentator for the FT and I'm going to hand it over to him and let him take it away. Thank you, Martin.
Martin Sandbu: Thank you Catherine, thank you so much for convening this and thanks to the Toward Belonging program for hosting it. Thanks to everyone who is tuned in to what I hope will be a very interactive discussion. Thanks also to the other panelists who we'll get to. But I'll start by trying to set out the argument for both the analysis and prescriptions that I try to make in the book. And Catherine has really prepared, set up the scene if you like, very well. Because the book itself is my reaction, the way I try to wrap my head around this rise of populist and antiliberal movements especially far right populism, right-wing populism, sometimes on the left but mostly on the right, in both Europe and the U.S. in recent years.
Martin Sandbu: Now, what these movements have done in their various ways - what is scary, what is frightening about them - is they reject several pillars of the liberal order that governed pretty much all western democratic countries from the second world war. One of those pillars was liberalism itself. Both liberal values but liberal institutions. Sort of basics of liberal democracy at home. Another pillar was openness towards the world, an attempt at building down borders after the war both politically and economically. And part of that is what we call globalization. I just stated, I think you would all agree that a central characteristic of these movements is they have to various extents attacked both of those pillars. But what I find most intriguing about right wing populism, and some left wing populism, is what they say about a third - the third pillar of the post war western order - which was an economic pillar.
Martin Sandbu: And you can call it shared prosperity, you can call it solidarity. It was essentially the third part of this package. It was a promise that we're going to build an economy that works for everyone, where everyone has a decent place, where everyone shares in the fruits of growth, to which everyone, as we could say, belongs. What they say about that, and we should really listen and take seriously the economic story that these movements tell, is something like this: There was a promise in this liberal order and from the elites who benefited most from it that you would all benefit, but you haven't, so come with us and let's throw the whole thing out.
Martin Sandbu: And the point here that I want to start with is that on the economic narrative, they've got a point. And we all know this - that the economy hasn't worked well for everyone for a long time. For the better part of 40 years. So when these movements say “We want to make our country great again”, “We want to take control”, and variants of that slogan, I think that is the most important place to focus on.
Martin Sandbu: Of course they understand that in cultural terms, in nativist terms, in racist terms often, but there's also an economic element of that. They want to make this country one whose economy works for people like them. So what I do in the book is to try to look at the various groups that the economy no longer works as well for, the people who we can, in fact we should admit that they don't any longer belong economically.
Martin Sandbu: And what has happened I'll tell the story very simply, over the last 40 years you've seen the disappearance of a lot of jobs that benefitted certain groups and the appearance of other jobs whose benefits are concentrated on other groups. We see this in particular with factory jobs, industrial jobs. The number of them peaked in pretty much every western country at the end of the '70s. Whereas the good jobs today are in different places, in different sectors.
Martin Sandbu: They require different skills. So this is all pretty obvious, the best jobs now or for those who have good cognitive skills, have high formal education, who live in the big cities because that's where these knowledge services thrive, who are mobile, who welcome change, who are comfortable with change and difference. And we'll get into this in discussion, but I think the pandemic has actually reinforced this. Again we see that it's the sort of thought workers, knowledge workers, who come out of this relatively enscathed. People like us who can sit here in front of a screen and do the stuff we would in any case do. Whereas it's the people that have been left in bad, precarious, ill paid jobs, who have borne the brunt of the pandemic. Either health wise or economically.
Martin Sandbu: Now a lot of people blame this on globalization. This is how two of these pillars go together. People including people on the left will say “Look, these jobs disappeared because of globalization. We shouldn't have opened up borders as much.” So part of the book argues that's a mistake, it's a factual mistake. Globalization has very little to do with these changes, and to the extent it does - having had less globalization wouldn't really have prevented those changes.
Martin Sandbu: Because those changes have mostly to do with technology which has produced things differently than before. And as I mentioned the number of factory jobs has fallen everywhere. But actually the amount of factory production - the total output - has kept going up. So this is a story about how we need fewer hands in factories, we need more people doing other things. That is natural, that is technology, that's inevitable. But it has very different effects for different groups of people. I have already mentioned the sort of backgrounds that benefit from the jobs that are the good jobs today. I want to mention specifically the territorial question. There's a geographic inequality and it's striking and not sufficiently well understood, I think, that in pretty much every western country, you see a pattern from the second world war to about 1980 where poorer regions were catching up with richer regions.
Martin Sandbu: And from 1980 that either stagnated or went into reverse. The richer, typically the capital cities and bigger cities, pulled ahead and the poorer places fell further behind. That's again linked to what sort of jobs create the most economic value and where those are. But it has tremendous political effect because much of this populist reaction with what we see is fueled from these left behind areas. One economic geographer has called it the revenge of the places that don't matter. So this is a big part of the equation. But all of this, I think is economically driven, it has to do with structural change in the economy. I don't want to deny that there are cultural dimensions and value dimensions to the political conflict we see, but I think it’s the economic change that has made those cultural, economic, cultural and ideological differences so difficult and so polarized.
Martin Sandbu: And so my premise here is that the economy is something we can actually fix, and if we do, then even whatever cultural and ideological differences remain, are much more tractable economically. They don't become as toxic. So even if you ultimately think there are irreconcilable value, differences between you and those relatives you've fallen out with because of who they voted for, I those differences will be much less pronounced in an economy where everyone really does feel that they belong, where they have a good place.
Martin Sandbu: Economic belonging, of course, has to do with other disadvantaged groups as well. We talk a lot about those who - the white working class basically, the native working class who - had some expectations, fell behind and are angry, and vote for populist movements. But of course the economy is unequal for many groups. And there are other marginalized groups.
Martin Sandbu: And I think another advantage of focusing on the economy is that the sort of things that make an economy work for everyone both recognize that actually these different groups have a lot in common.Call it a class analysis if you insist, but I don't think you need to call it that, but economic position. And the solutions that bring about an economy of belonging is also one that will benefit both the angry left behind who vote for populists, and the newer marginalized group if you like - ethic minorities, women, the young often who may be voting progressive. But I think there's an advantage to thinking how economic change can be made to work for all of those groups. And I think that's another argument that might help overcome political polarization.
Martin Sandbu: Now I don't want to take too much time, so I'm going to rattle through, a bit, the economic program I put out here. But I'll spend a little bit of time on the first point because the common thread here is: we need to embrace productivity growth and structural change and technological change. We should not try to hold on to jobs that used to create belonging 50 years ago.
Martin Sandbu: We're never going to go back to a world where lots of people can come out of high school and get paid well to stand at an assembly belt in a factory, because we have robots that do that now. It's not going to happen. So what we need to do instead is to try to embrace these changes in productivity, but make sure as many as possible of those good jobs exist for everyone. And that everyone who is not even in the most modern jobs can also be treated well.
Martin Sandbu: How do we do that? Well, we start again by not holding on to the bad jobs, but trying to force as many of the good jobs as possible to appear. And to talk about that, let me just tell a story that maybe my fellow panelists have heard before, so I ask them to indulge me. It's a story about car washes.
Martin Sandbu: So I grew up in Norway and in Norway in the '80s, the only way you could wash your car was to go to one of these big machines with the big blue roller brushes. And if you're a kid you love to sit inside the car and watch it pass over you. But the point was it was a machine. When I lived the U.S. in the early 2000s - when I moved there in the early 2000s - I would find that if I had a car, I would never own a car, but when I rented car and needed to get it cleaned, I would drive into a car wash and a group of 3 or 4 often immigrant men with wash clothes would descend on the car and do it all by hand.
Martin Sandbu: Now, I think that really illustrates two different types of economies. The reason why the Norwegian car wash chose to invest in a machine and the American one didn’t is quite simply that it cost more to employ someone in Norway relative to the economy and so on. So it's an advantage, it's better economically to buy the machine. And because the machine makes the few people who still do work washing cars more productive - they man the machine and they are mechanics, so rather than manually washing the car, you could also pay them more. So these things go together.
Martin Sandbu: Similarly if it's very cheap to hire people because they get paid very little, then you will do that. But it will be very unproductive work. You need four people to wash this car. And so you can’t pay them very much. Because you can’t charge too much for a car wash. It's sort of a microcosm of two different economic models. And it's interesting here that the automatic car that was invented in the U.S. in order to economize on labor in the '40s and 50s, and then somehow it was adopted but you departed from it in the U.S. because labor became too cheap relative to investing in a machine.
Martin Sandbu: In Norway in the last ten, fifteen, twenty years, you've started to see these manual car washes again and it's exactly the same. It's poorly educated immigrant men who don't speak the language. In Norway they'll typically be from the Balkans, from Kosovo and places like that. Again, this has to do with the immigration. But the availability, the ability to pay people very little changes how you invest. Now, I spent some time on that story because I think it captures the essence of what we want. We want the automatic car wash. And we want this in every industry, everywhere. We want to get rid of the bad jobs. We want to automate as much as we can so that the remaining jobs are well paid. And we want to do that across the board so every job can be well paid. How do you do that?
Martin Sandbu: So point one: we actually need to force the lower end of the wage distribution up. In places like Norway, that was done through a decades long tradition of collective bargaining. That's not going to happen elsewhere, but you can have minimum wages. Have a really aggressive, ambitious minimum wage policy. And I think we're starting to see this too - sort of consensus in the economics field is changing. It's not going to put people out of work, it's going to increase productivity in the businesses that hire them.
Martin Sandbu: Add to that of course, investing in skills so people can move to better jobs and on the whole embrace the fact that people can move from job to job as some kinds of activity gets priced out because it becomes too expensive to do it manually. In Europe the highest rate of job to job churn is in Denmark and Sweden, who also have some of the most productive labor markets. It's because people move on from poorer jobs to better jobs.
Martin Sandbu: The second element is about power. I write about power in a lot of different markets and a lot of different dimensions in the book, including a small business versus big tech giant. But let me just here mention power in the labor market. You want people to be less vulnerable, to basically have the power to say no to unacceptable conditions in the labor market, to unpredictable shifts that put the risk on the employee, to poverty wages and so on.
Martin Sandbu: How do you do that? You give them a good outside option. You give them the ability to safely say “No, I'll go and look for something else, thank you very much.” And even time to increase their skills. So I think you do that through something like a universal basic income. A third element of this is, those first two will get rid of the bad jobs. You still need to make sure that enough of the better jobs appear. That is a job of macroeconomic policy. You want to have a macroeconomic policy either spending through budgets, government budgets, or cutting interest rates and stimulating the central bank. But you want to create enough demand pressure in the economy that the businesses that have the good jobs, that have invested in machines and are productive and can pay high wages, want to expand so that they can create more jobs like that.
Martin Sandbu: So I think there's been a problem in the west, in all rich countries, that they've been too timid in terms of fiscal and monetary stimulus. This is changing and it's very interesting how the federal reserve started saying “We're going to be less worried about inflation. We think that by pushing more we can bring people in from the sidelines of the labor market who would otherwise be without a job.” And here I will actually try to show one slide because I think it shows how these different groups all are in the same situation economically. Let me try this. Catherine, tell me if this doesn't come up now. I am going to show a chart. Okay, Catherine, you'll tell me if this doesn't show up.
Martin Sandbu: This is a chart of how some specific groups fare in terms of unemployment when the economy goes up and down. The black line is growth. It's a three-year average so it's smoothed. But when it goes down it's a recession, when it goes up it's a boom. The colored lines are unemployment gaps. They're the difference if the unemployment rate for a particular group - the red one is people with little formal education, the green one is the young, and the blue one is black males. And it's a difference between their unemployment and the general unemployment rate.
Martin Sandbu: So it's no surprise that when the economy tanks, people lose their jobs. But what this graph shows is these marginal groups lose their jobs at higher rates. The gap between their unemployment spsz and average unemployment increases when the economy goes down. And it stays high, that gap stays high until you're well into a recovery. So you can see for these three groups you'll see the same thing in most west European countries. And I will now shop sharing and hopefully get back to seeing you all again.
Martin Sandbu: What this means is that both the left behind that we worry vote for populists and many other marginalized groups - marginalized in the sense of being on the margin of the economy - they are the ones who get fired first and hired last. Fired first in a rescission, hired last in an upturn. And that is why it's wrong for macroeconomic policy to look at the average of the economy. They should look at the margins of the economy and that means keep stimulating much longer than they normally do.
Martin Sandbu: A fourth point partly related to this, is we need a financial system that works better for the left behind. And that very briefly means let’s have less debt and more equity financing. Financing where the creditor, the financer keeps more of the risk. That works for governments, it works for businesses, and we can think of ways to make that happen for individuals. It can be loans that are easily restructured, that are easily cut down when things don't work out well, but that behave like equity.
Martin Sandbu: The fifth element is we need a tax policy that works for the left behind and for marginalized groups. And that means a tax policy that tries to compensate for the structural changes in the economy, which are increased income equality in wages. But really more income going to the wages of those who control capital, so that's high level managers for example. And in many countries capital itself is taking - capital income is taking a larger share of national income relative to earlier. So working income, labor income has suffered, capital income has gone up.
Martin Sandbu: But what you've seen in the tax system - again across the board in western countries - is that capital taxes have not increased, even though capital incomes and wealth, the stock of wealth, the ownership of wealth has increased tremendously and become more unequal. So I argue for a wealth tax. I argue for fixing the international system for taxing corporations. And of course will at some point talk about climate change, have a proper carbon tax that really works, but redistribute that money to people in the form of a universal basic income or something like that so that the people at the bottom are not those that suffer the most from higher carbon prices.
Martin Sandbu: And finally regional policy. You need to make all of this work for all the territories of a country. It's very hard. Just because the kind of economic change is against you on this. But it's not impossible. There are examples of places that have done better than others. I'll just say here that a lot of the policies I've already mentioned will actually help left behind areas because they put more purchasing power into them, more money is retained there, and the jobs that are there will have to be better, better paid.
Martin Sandbu: But in addition, I will just say that again for regions, you need a strategy that's more ambitious than trying to just keep what was already there, keep the factory that was there 350 years ago. You need to have as your ambition to make these modern jobs available also in many more parts of the country and not just in the capital cities. Perhaps the pandemic is an opportunity to do this. We've suddenly all learned very fast how to do remote working. It is suddenly much more conceivable than it was a year ago for some of these high skilled, well paid knowledge jobs, to be done in much more remote areas than before. So I think there's an opportunity for policy entrepreneurship here to think about can we use this technological jump we've all gone through to fix the lopsided geography of the modern economy.
Martin Sandbu: I will stop there. That was sort of rattling through a six point plan if you like, but there's the analysis of why the economy is really behind what's gone wrong. Politically that has to do with belonging in an economic sense in an economy where you can find a place where you are of economic value. And I’ve listed some policies - I will stop there and look forward to the discussion. Thanks so much
Catherine Fieschi: Excellent. Thank you so very much, Martin, for delivering quite so much content that's great. Saru, I'm really delighted to bring you in. You're the president of One Fair Wage, you're also director of the Berkeley Food Labor Research Center. You're an activist, you're an academic.
Catherine Fieschi: And as Martin was speaking, I kept thinking this is right up her alley, the power to say no, the dignified wage, the absence of timidity. The fact that this makes sense and it makes sense for everybody. I'd love you to react and I’d also love you to bring in potentially some very different groups that perhaps aren't quite as singled out in Europe. You've looked particularly at food laborerses and restaurant workers, but also potentially the intersection with gender and the vulnerabilities that brings with it. Over to you.
Saru Jayaraman: Thanks for having me. And listening to this conversation I kept thinking our situation is like the extreme horror of everything that Martin is talking about, so it's almost like you should think about the United States and what I'm about to describe as the warning to Europe if it continues to go p the wrong direction where you'll end up which is the hell that we live in.
Saru Jayaraman: And what I mean by that is, you know, the very structure of -- our wage structure in the United States is structure belonging and not belonging and so I've quickly shared the history of the issue that work I on with the minimum wage. Which is that in the United States the restaurant industry prior to the pandemic had become the second largest number and number one fastest growing private sector employer. We eat out more than anybody else on Earth and as a result we had reached almost fourteen million workers, close to one in ten American workers working in restaurants prior to the pandemic.
Saru Jayaraman: But being the largest and fastest growing industry, it was also the absolute lowest paying employer in the United States of America. So you had the largest and fastest growing industry paying the absolute lowest paying jobs, therefore growing the low wage part of the economy. And that fact that it’s the largest and fastest growing, but lowest paying, is due entirely to the money, power, and influence of a trade lobby called the national restaurant association that at emancipation of slavery in 1865 demanded the right to hire newly freed slaves - mostly black women at the time - and not pay them anything at all since they hadn't been paid for generations a black people, and have them live entirely under a new concept that had just come from Europe at the time called tipping.
Saru Jayaraman: Tipping originated in feudal Europe - it was an extra or bonus on top of a wage given by nobles and aristocrats to serfs and vassals. When it came to the states right before emancipation, it was resoundingly rejected by most Americas, but at emancipation the restaurant lobby wanted the ability to not pay anything. And so they used tips as a convenient way to do that.
Saru Jayaraman: So tips in America were mutated from an extra or bonus on top of the wage to a replacement for wages. And we went from a zero dollar wage at emancipation all the way up to the federal minimum wage in 2020 in the United States of America of $2.13 an hour for the largest workforce of women in the United States of America.
Saru Jayaraman: So I mean that is absurd, ridiculous, and outrageous on its face. Also when you know that it is a direct reflection of the value that Americans place on black people and on women and on black women in particular, and that as a result of that value placed on women and black women in particular, the wage has not increased more than $2 in 150 years. And today this is the largest and fastest growing industry in America. And what started as a valuation of black women has now become a valuation of 13 million workers in the United States of America.
Saru Jayaraman: In other words, what we know about this history that's true so much in the United States is that the experiences of the most marginalized and the ways in which we undervalue them economically end up impacting the entire society, all workers who work in this industry - one in ten American workers currently works in restaurants and one in two Americas has worked in the industry at some point in their lifetime.
Saru Jayaraman: Now, with the pandemic, a ridiculously absurd wage that caused economic instability and sexual harassment for a seventy percent female force of restaurant workers became a matter of life an death. Because with the pandemic, sixty percent of these workers - six zero - could not get unemployment insurance because our social safety net is so atrocious that the majority of these workers were told that their wages were too low to qualify for unemployment benefits.
Saru Jayaraman: Meaning they got nothing for the last ten months - no way the survive, no way to feed their kids, no way the pay bills, no way to pay for heat with winter getting colder and colder. And so you have a fourteen million workforce - a workforce of 14 million - unable to pay the rent, unable to feed their children, living in parks this summer, living in shelters or their cars at the moment in the United States of America.
Saru Jayaraman: Even worse, they got called back to work in the summer and fall as restaurants started to reopen and faced extreme hostility. They were now, for two dollars wage, asked to be both servers and public health marshals enforcing social distancing and masks in restaurants. And we just put out a report last week showing that sexual harassment has gone way up during the pandemic that these womens are being asked by male customers to remove their masks so that the men can judge their looks and therefore their tips on that basis.
Saru Jayaraman: All of this would be much less a problem if these women were paid an actual wage rather than having to live off of tips, which were never intended to be the wage. But what this is a reflection of, and how this relates back to Martin's book, is that this is the largest of multiple sub minimum wages in the United States all of which literally value identities of people less than others.
Saru Jayaraman: Tipped workers is the largest sub-minimum wage category - it’s seventy percent female, disproportionately women of color - we know why they're paid a third of everybody else. But also incarcerated workers can get a sub-minimum wage. People in prison in the United States can be paid a sub minimum wage because of the exception of the 13th amendment that allows for ongoing slavery in the case of incarceration. And we have a lot of people working in prisons in the United States.
Saru Jayaraman: There are workers with disabilities who get a sub-minimum wage - again, valued less because of their disabilities. Youth in many states get a sub-minimum wage - valued less because of their age. And gig workers, because of their misclassification as independent contractors get a sub-minimum wage. And they are largely immigrants and people of color. Each of these groups gets less than what we as a nation eighty-one years ago said is the floor, the minimum wage. Eighty-one years ago, all of these groups get less or a sub minimum because frankly they're valued as sub-human. Their identity is a direct - is then directly reflected in the wage that they're receiving in the United States of America and the direct impact of that.
Saru Jayaraman: I want to say two things that relate to some of the things Martin said. One on the hopeful side, we did see millions of these workers refuse to go back to work even if they didn't have anything to fall back on during the pandemic because it was just too dangerous to go back for a two dollar wage. And the first time in 20 years of organizing restaurant workers, I saw millions of workers say no, I won't go back. And restaurant workers responding by having to pay a full, fair, liveable wage to these workers rather than having them rely on tips. So we did see as a microcosm during the pandemic some of the power dynamics that Martin talked about in terms of workers just refusing to work - refusing to go back to work - without a higher wage.
Saru Jayaraman: The other thing, though, that I want to point out that relates to some of this stuff, Martin talked about about is that if we don't look at these most marginalized, lowest wage workers who are undervalued because of their race and their gender, if we don't look at them, then the future is what we're seeing right now, the future dove America. Which is that the consumption ability of our country is, it's such a stupid short-sighted direction we're heading because sick, dead, and extremely impoverished people do not make good consumers.
Saru Jayaraman: And we've seen our own industry - the restaurant industry - cannibalize itself by continuing to lobby for a $2 wage. Because these workers who used to take their families to eat out in restaurants, at least occasionally, no longer can. Even if you couldn't care less about these workers, I'm here as a warning to Europe that your consumption ability will disappear as it is going to happen in the United States of America if you allow people to be valued based on their race and gender and paid in these absurd and ridiculous ways. Thank you
Catherine Fieschi: Thank you so much for that. And I will want to return to some of these themes in the discussion in a few minutes. And particularly the incredibly close nexus that you outline between the valuing of identity and the valuing of a job, which is in the way you express it which is absolutely key in getting over the absurdity of a lot of the debate. Which is you look either at identity and culture or you look at economic forces. I want to come back to that.
Catherine Fieschi: But before I do, I want to pass the baton, or microphone rather, over to Simon. Simon you're a historian, you're a geographer, you're also the author of Empire of Democracy - beautiful title - the remaking of the west since the cold war. And I want to bring you in to comment on some of what's been said already. I'm particularly interested also in the historical aspects of some of these developments, quite interesting that you, Saru, you go back 81 years you go back 150 years, Martin, you go back to the '70. You, Simon, actually if your book you focus on 1971 specifically. And so I'm quite interested in that. But over to you.
Simon Reid-Henry: All right. Thank you Catherine. Well, everyone's got to start somewhere. Thank you Catherine, thank you to the OB Institute for asking me to reflect on Martin's book, and thank you to Martin for writing it in the first place. Let me say to start with I think this is a fabulous book. It does an incredible job of succinctly, yet sharply delineating some of the long term trends which are crucial to understanding how our society has developed over the past 50 years.
Simon Reid-Henry: And yet many of which, like the notion of productivity growth and a whole host of things Martin described are obscure, if not invisible, in the day-to-day political debate. And yet as we’ve just been hearing, they matter. I read Martin's book in particular as a sustained call for a return to a social market economy nationally and to take this out geographically - and not just historically Catherine - for linking this as well to a sustained commitment to globalization internationally. So Martin's central argument, if I read him right, is that policy choices matter and we have allowed our politicians to get away with saying there are some things they're powerless to prevent for far too long. And Saru has very eloquently shown us the consequences to that.
Simon Reid-Henry: There are always going to be disruptive technologies to adapt to the Internet, AI, whatever it is, and there will be a crisis to pick ourselves up from. Mistakes will get made. This is economic reality, but it need not be economic fate. There are always choices. What I thought I'd do in my comments is raise three basic points about the nature of those choices. The first concerns geography, since Martin mentioned it, and I am a geographer. The second concerns language, or more precisely public discourse. And the third concerns the role of government in the shaping of these social outcomes.
Simon Reid-Henry: So geography first of all. Martin makes some really well judged comments in the book about the role of economic thinking and the creating of the problems and solutions of our current political ways. He also foregrounds and analysis of regional equality, urban rural divides of how like the city of London is excised out of the wider national space. And we could take the same example in the U.S. with respect to somewhere like New York.
Simon Reid-Henry: He deploys his arguments to help show there are certain dominant discourses within, for example, the discipline of economics that overlook this when it comes to actual policy making. But I think there's something else that gets overlooked. I want to mention it here simply because it fills in a participant of Martin's story that I think is helpful. And that is that there are dominant, geographical imaginations. That point us to some national histories as being more important than others, some parts of our history being more relevant and other parts of our countries being more relevant than others.
Simon Reid-Henry: I take Martin's book generally as a powerful call to look outside these forms of local and methodological nationalism. This is part of a story that I want to really bring it. It’s something I've written about before in some of my own previous work and the political origins of inequality, which that title suggests really foregrounds the politics in the way I think Martin does, too. I want to do it by bringing in something that isn't so elaborated on in Martin’s own narrative. He opens his book in March 19333 with Roosevelt swearing in on the one hand and Hitler's rise to power in Germany on the other. It’s a good heuristic economic crisis that links them both, but policy responses would drive them along very different paths.
Simon Reid-Henry: That same economic crisis linked other countries, too, including the Nordics that Martin gets to at the end of his story. These are the countries which are best combined open societies with socially protective and progressive policies. Not the situation we see in the U.S. that Saru has been describing. They've cracked the code, if you like, of an economics of belonging.
Simon Reid-Henry: The part of the way they've done so gets left out of Martin's story. I'm not sure, in fact I’m certain not through oversight, because he covers an incredible amount of ground. But putting this missing history back in is important because it suggests ways that societies can learn and adapt from that experience, specifically the Scandinavian one. The reason I say this is because Scandinavia in the 1930s was like most of Europe and like perhaps the US today plagued by crisis, industrial unrest, political radicalization, and poverty. Sweden was a cauldron of conflict in the words of one expert and in just thirty years earlier in 1900 had actually been Europe's most unequal country.
Simon Reid-Henry: Sweden and Norway together went through twelve prime ministers in just fifteen years during the interwar era. Unemployment was high, there was a severe agricultural crisis. And there were racialized, national ideologies typified by the likes of Rudolf Shellen that play in political debate. But the Nordics took a different route out of this, and this is the point I want to make, than either Germany or America. The route that they took focused on adopting a politics of inclusion, laying the groundwork, if you like, for a later economics of belonging.
Simon Reid-Henry: So in 1933, Martin's opening year, Sweden's politicians sign off on the famous cal trade between workers and farmers in which the Swedish social democratic party accepted protectionist measures for some agricultural products in exchange for farmers accepting more progressive labor policies. This was a bold move, but perhaps precisely because of that, it kept them in power for forty-four years. So when Catherine talks about what she calls the kind of culture of timidity, there are lessons here in the value of not always being so timid.
Simon Reid-Henry: It allowed the institutions of collective bargaining to form, evening up the risks and reward of participation in the economy. Now let's go to Denmark, it's a similar story. There, the underlying principles of the social welfare economy took shape around the constigard agreement, also in 1933. It was actually ratified on the same day that Hitler was appointed chancellor of the reich in Berlin. And at a moment when unemployment was touching forty-four percent. The agreement saw what was actually an unconstructive bout of labor unrest and kept the economy ticking over. The same lesson was institutionalized further this time in Sweden in 1938 with the basic agreement signed at Saltsjöbaden.
Simon Reid-Henry: By reducing social tensions, bringing marginal voices into politics, and seeking consensual solutions, a path opened up that would prove very different to the German and the American experience. And as I say these were in effect the political preconditions for the later construction of a more elaborate economics of belonging.
Simon Reid-Henry: The universal social coverage of welfare policies, the wage compression lifting poorer workers up, limiting the welfare of the rich and allowing for more productive forms of investment in between. The health insurance and the pension plans that helped bind these previously very fragmented societies together. If you don't believe me try cycling from the top of Norway to Lindesnes Lighthouse at its southernmost point. And you'll see the range of communities and share distances that you travel.
Simon Reid-Henry: To conclude this very first point, briefly then, I think there are three basic lessons we can draw from this which isn't the same as replicating the Scandinavian model, which we wouldn’t want to do and wouldn’t be able to do if we tried. The three basic lessons we can take forward in political debate today: One is cross geographical policy learning. Learning from other nations, from other examples, from other places. The second revolves around civic inclusion, which is really a lot of what Saru was saying. And the third is about good parliaments. Parliamentary compromise, good policies.
Simon Reid-Henry: And Martin outlines many, but many require these parliaments actually working, actually able to deliver on what they institutionally and constitutionally are set out to do in a way that they achieve this in practice. And that of course raises a whole set of further questions from the lobby system to political polarization to the role of social media and so on. My second point then follows on from some of this point - one about geography and this is about language. Economic policies need to make good economic sense.
Simon Reid-Henry: They also need to be framed in a political language capable of securing popular consent. The idea that we need to make the scale of interconnecting changes Martin outlines: rebalancing power and risk in favor of the most vulnerable, using fiscal and monetary - i.e. macroeconomic policy alike - to push up demand, regulating finance, restoring a more balanced, progressive tax system, and so on. All correct. But daunting as a package and the danger is it ends up getting pushed away as a sort of chicken and egg fatalism. We just don't know where to start. In other words, where to begin.
Simon Reid-Henry: Well in such cases, it can be helpful to start with the most basic thing of all which is our political language. Here there are two barriers that I see stand before Martin's program, which I think it would be worth addressing or thinking about how we address them. These two barriers take the form of two vocabularies which have fallen into disuse. The first is the language of duties, as a counterpart of the language of rights.
Simon Reid-Henry: If I were to give you a Google engrame of these - the regularity with which these two terms would appear - you would see over the 18th century, duties being more frequently referred to, in the early 20th century, there's a sort of ping pong between the two, and then ever since the sort of sixties, seventies era, we see the language of right shooting up and that of duties falling away. My sense is that the same thing that happens, or it does happen, with the language of public interest in the common good. Two critical languages to achieving the sorts of policies Martin wants to see us do. And my sense is that not only are these two languages required to underpin The Economics of Belonging, but they're also essential for us to bring in from the ground up.
Simon Reid-Henry: The problem is one that one of these developments - the replacement of rights by duties - has become increasing the way in which we argue for better social outcomes including bottom-up policies. And yet it simultaneous plays into and worsens, if you like, the other change which is what prevents many of those calls for better social outcomes succeeding at scale. Namely the replacement of the language of we with a language of and I.
Simon Reid-Henry: Let me elaborate briefly. The language of rights was a powerful vehicle in the post seventies and this is why I start there. Not so much in 1971 in my book, but in the early 1970s. It was used to secure for new political constituencies the political and economic resources and the status they were denied under the previous arrangement. The golden age.
Simon Reid-Henry: The golden age was only ever golden for some. If you colored, female, or not straight, you were not included in the same wage - return to my three points earlier. Rights were a good tool for securing some of that, be it, civil rights, gay rights, or whatever. But those rights secured desired ends at the individual and/or the community level. They tended to be civic political: the freedom to do things, to be things, and rather than the social economic capacity to be able to do those things. And they leave us adrift from the sorts of political arguments required to make a case. For example, universal social policies - like a universally acceptable minimum wage.
Simon Reid-Henry: This trend is reinforced by the corresponding decline in the language of duty. Despite it's past more recent, ugly resurgence as a language of national belonging, the exclusionary nature of the politics - the politics of exclusion - that goes against Martin's economics of belonging. Why is this? Because rights claims are meaningless without duties to uphold them. This has been a large part of the problem in recent years. You see it at the level of states even. States as much as actors, have not have been willing to uphold fully certain rights. It’s been cheaper to outsource welfare provision for example. Put it on to the shoulders of others.
Simon Reid-Henry: This is one way in which the rise in the language of rights intersects with an exacerbates the decline in a language of common benefit. So the silver lining here is perhaps, and maybe this is something that we can look to and it's something that Martin's program can take solace in, which is that while such things may have fallen out of our political language, the response to COVID has shown they’re still very much present in our personal and our associative manners.
Simon Reid-Henry: The upwellwelling of mutual aid movements, for example, was not just about solidarity. It was about reaching for something more inclusive, more caring, more belonging to a notion of a collective we. So the challenge then becomes how do we incorporate this into mainstream political debate? And again, the answer I think it turns on our three lessons: learning from elsewhere, civic inclusion, and parliaments that work.
Simon Reid-Henry: Which brings me on to my third and final point about the role of the state in shaping social outcomes. Martin's book provides a host of examples for thinking about how this can be done. It shows that one can deploy the insight of a universal basic income type program or negative income tax to apply carbon taxes in a way that does not disproportionately affect the poor. Indeed they can be net beneficiaries of the cash payouts from the sort of carbon fees he imagines. Each of these solutions raises, very directly, the question of the proper relationship between the market and the state. And this was once much more clear cut. The Scandinavian welfare states I described a moment ago are a classic example of public sanctions, serious state intervention in the market as routine. Not as emergency response or fiat money after a crisis.
Simon Reid-Henry: But today, it's much harder to say with certainty where the market stops and the state begins. And this is not, and here I absolutely agree with Martin because of globalization. It's because of the fact that states have failed to use the levers that make them distinct. How are they to be encouraged to do this? We're again, I think we’re back to our three learning points that I raised at the start.
Simon Reid-Henry: Policy learning from other places, no country has the monopoly on good policies. Germany does housing well and football clubs for that matter. Norway is good at tax and prisons. And the UK is good at devolution and used to be good at political stability. But we need not just break out of our own political left-right silos therefore, which is often what the debate gets drawn into. We need to break out of the national silos in which we all find ourselves groping for the solutions. Because the lessons is our own past are not always where the solutions are to be found.
Simon Reid-Henry: The second point, civic inclusion: how do we incorporate the constructive voices of criticism and change? How does Black Lives Matter become a part of mainstream political debate and policy making? We’re seeing how this can be done at the level of institutions, be it companies or universities. Where my own university Queen Mary was one of the leading organizations to bring in its own minimum wage for cleaners. But what would it take to do the same at the national level?
Simon Reid-Henry: Finally, and perhaps by partway of an answer to that last question, parliaments that work. Good policies, and Martin outlines many, require good parliaments to deliver. And this in turn also raises a whole further set of questions. From the lobby system to polarization and so on as I mentioned. But it also points to why we need books like this - to try to grasp the bigger picture to guide us as we do so. So Martin, thank you once again for writing such an informative and thought provoking work. It's raised for me a great many questions. I think Saru’s comments have shown in a way some of the very concrete implications of it.
Simon Reid-Henry: I wonder whether we can find in our discussion a way of thinking about how we mobilize these ideas, how we scale them up through political debate, and how we make sure that our political language is capable of incorporating these insights and getting publics on board with it. Because that surely has to be the next step. Thanks very much.
Catherine Fieschi: Thank you so much. I'm going to turn it over to questions in a minute. As you were speaking, though, and in view of potentially your closing comments in a little while, I wanted to bring a couple of issues to the table. One is that something that's transpired a little bit through your mention of polarization, Simon. In your book Martin, at one point you have a brilliant ziggy phrase that says, “This is not about culture, this is about just putting -- this is about money.” And it's essentially about putting money towards your priorities as a government and as a state.
Catherine Fieschi: And I think that as I read it, I thought that's absolutely right. But that means agreeing on those priorities. And you know, it points us back to what's it going to take to be able to craft a measure of consent around such priorities? I mean as we step into the brave new dawn of the Biden administration, we still have 73 million Americases who voted for Trump. And how we're going to craft, therefore, consent around these priorities, is that an issue of culture in some ways, in some sense including if I think of your examples around Scandinavia and Norway in particular, but Scandinavia across. Not more homogenous cultures, but potentially more consensual institutions if you like. Anyway, I wanted to put that in.
Catherine Fieschi: And the second thing I wanted to put into the mix is that there's an been awful lot of discussion over the past few months around a couple of books. One is Michael Sandel's book on the Tyranny of Meritocracy and what he calls “the folly of building an economy” essentially around the meritocracy of a university system that excludes two-thirds of Americas in the U.S. case.
Catherine Fieschi: And also the David Goodhart book, heart, or head hand heart, I never know which order's in, where he makes a similar case about having put all our eggs in one basket in terms of very highly skilled jobs and having left behind those people who are essential workers - particularly in the provision of care. So this is something I just want to bring into the background. But I'd like to move forward into the questions that have appeared in the chat. There's a couple of UBI questions which I'm going to read out to you. [Patrick] “Clearly we undervalue so-called low skilled jobs. Martin suggests UBI is the solution because it allows people to withdraw their labor. What level is sufficient and how do we determine it?”
Catherine Fieschi: So quite specific question here on UBI. And then there's a related one: “Would UBI or MMT style job guarantee be better to foster options for low skilled and lowly paid workers?” So I'd love to have Martin first of all your answer on these issues and then Saru and Simon please feel free to comment.
Martin Sanbu: Thanks first to both Saru and Simon and to you Catherine for really sort of thoughtful reactions and I hope we’ll get back to some of these questions. Let me answer UBI quickly now so we can move ahead. There are so many different arguments for UBI or people like it for different reasons. I’ve emphasized this power argument that it gives people an ability to say no to unacceptable conditions. And I didn't get into this but I think the consequence would be that employers would have to up their game. They would have to -- there's a lot of sort of bad stuff happening in the labor market for no good reason, it's just kind of neglect.
Martin Sanbu: If you don't get your shift schedule in place, in a good time before you have to get workers in, that's just sloppiness. So if some of this - making it possible for people to withdraw their labor as the questioner asked - there's a lot that employers don't need to do now that it wouldn't cost them much to do, and that would make it possible to make everyone better off.
Martin Sanbu: So I've been asked a sort of impossible question, how much is enough? And I'm not going to give a number partly because what would be ideal is far from what is at all realistic in the foreseeable future. So I would say you want to start somewhere with a principle. But I think even a very low UBI - one that isn't in itself something to live on if you lived on only that over a long time - would still be enough to free people or give people that empowerment. If you know that if you lose your job today, you'll have enough that the next four weeks will be okay - you'll still be able to feed your kids, even if you have to cut down on everything else at the same time.
Martin Sanbu: That level is much lower than something that you could conceivably live on permanently. So I would just say how about we try it even at a very low level. It's the certainty of it and the unconditionality of it that starts to unlock this empowerment that I think we should have. And I think there was a question about UBI versus job guarantee. I think the trap in the job guarantee proposals is that it doesn't free you because if you don't want the job that's on offer or that not a good enough job or if it's just not suitable for you and because whatever job guarantee administration is staffed with people who don't really care about you and they’re not going to give you a job that suits you or they will say you have to work at the hours where you have to pick up your kid, then it’s no good right? Iit doesn't solve these problems.
Martin Sanbu: For a lot of people, the problem isn’t that they don't have work, it's that the work is so bad. And that I think UBI is a better tool for addressing, to rebalance this power where you can decide for yourself rather than be at the mercy of either a private employer or for that matter a public job guarantee administrator.
Catherine Fieschi: Saru, would you like to come in?
Saru Jayaraman: Again, I think we always serve as the horror warning because you know, I think UBI in concept is good and a social safety net in general, a much stronger one is good. I think some of the challenges in the United States have been that we've seen leaders of Silicon Valley corporations support things like UBI and things like portable benefits, frankly because it removes some of their responsibility and onus.
Saru Jayaraman: And so I would say we have to always - and probably Europe is already thinking about this - but in the United States we have to be careful to always couple any conversation of UBI with ongoing accountability for corporations and the way that they pay their workers because so many companies in the United States -- I mean, McDonald's and Walmart help their workers apply for welfare benefits, it's part of what they do, it's part of their low wage model.
Saru Jayaraman: So we can’t just have UBI, we have to have some kind of tax or penalties on companies whose employees are relying on any kind of welfare or UBI system. So that like you said Martin, UBI is then funded by corporations that are held accountable or by wealth tax. We just need to make sure that UBI does not in any way take away any onus or focus or responsibility from corporate power that must be held responsible for providing liveable wages to their employees regardless of what's happening in terms of a social safety net.
Catherine Fieschi: Simon.
Simon Reid-Henry: Yeah, thanks. I know it's always a bit boring when panels agree, but I think what Martin and Saru say is route. And one of the things I like so much about Martin's book is it's not one thing. There's been a lot of talk about Finland tried this treatment and it didn’t work and so forth. It comes back to my point about context and reading things out from the context either historically or geographically, you've got to look at things in a wider setting.
Simon Reid-Henry: And there’s never one policy that will shift the needle in that sense. It's about the right package. It's about financing one thing with the returns from another thing. If you're going to think about this in terms of taxes, if you’re going to think about this in terms of what UBI can do for a particular sector of the population then it's got to be seen in the context of the wider struggles that they also are confronting that go beyond the particular workplace issues, but which also relate to the economy.
Simon Reid-Henry: And I think this is exactly where Martin's book comes in. But again, if you look at it historically one thing that's interesting for me is that you see a change in core dynamic that sort of labor capital struggles revolve around. You go back to the seventies and eighties and that’s really about wages.
Simon Reid-Henry: You track forward a little bit and it becomes about voice - being able to have a say in the organizational structure and so forth. You track forward to now and it’s really a discussion that Saru has pointed out so well about autonomy. About having the freedom to say no to certain things. To not be in that position where you're unable to voluntarily in that sense put yourself in a position of of going to workplace you don't consider to be safe. Anything that can move you out of that lack of autonomy has to be a good thing and has to be considered.
Catherine Fieschi: I'm going to interject quickly because we’ve been geek shamed. UBI is universal basic income. Quite rightly pointing out we should have spelled it out. So there you go. Martin.
Martin Sanbu: Just very quickly and that's on me because I introduced the term and should have said it. It's unconditional payment to everyone every month whatever the size, something you get no matter what you do including if you don't work. I think that the last couple of comments kind of tied back to what Saru and Simon talked about earlier. So Saru, I completely agree, you have a universal basic income to empower people to allow them to say no. You also have an ambitious minimum wage policy. And you also have an ambitious macroeconomic policy that creates a lot of jobs.
Martin Sanbu: So this kind of links to Simon, how do we -- where do we start, how do we get -- and Catherine how do we craft consensus around this. I actually think it could be easier to push for a big package, sort of a mass program rather than piecemeal technical solutions. And what progressives - I think - I think about the Obama administration. I think part of the problem was, not even economically, well economically too but also politically that they weren't ambitious enough that you could actually perhaps be more successful with Roosevelt style New Deal or these big transformations that Simon rightly told us about in the Nordics in the 1930s.
Martin Sanbu: I don't know if others agree, but I would put that out there as saying actually even politically, it might be easier to go big than to go incremental. If you do that, Saru you writely want companies to be held to account, but that can also happen through market mechanisms if people are able to say no, no I'm not going to accept that because I'd rather go off and search for another job for four weeks because I know I can do that because of universal basic income.
Martin Sanbu: Or I have another job offer here because there's so much demand in the economy that a lot of other companies want to hire me. That sort of thing will by itself put pressure on companies to improve their offer to workers. So we have to work at different levels here and with a package of policies that give people at the bottom more alternatives, they will have more power to get their employers to treat them better.
Catherine Fieschi: I think it's also a very important point in terms of political rhetoric and the political offer that we can make at this time. You know, hopefully past the high water mark of populism in Europe and the United States although I'm not all that convinced about that.
Catherine Fieschi: But the idea that instead of offering what appears to be technocratic solutions, actually offering a package that may end up obviously being about delivering on the technical specificities and individual policies but actually has a vision and essentially spells out what we're all talking about, which is a renewed social contract. To which people want to sign up and into which they feel invited. And rightly so and as legitimate participants. There's a couple of questions this chat
Saru Jayaraman: I couldn’t hear you Martin. I never want to rely on market alone, obviously. You know, if workers -- if there were rational thinking and market forces operated as they should, there would not be a two dollar wage in the United States in 2020, workers would have rejected that. But it took a global pandemic for workers in the United States to say I'm not going to go back for a two dollar wage.
Saru Jayaraman: The intentional way in which the right in the United States has convinced working people, for example in my case, that somehow their wage is negligible and what they’re really working for is their tips - which is incredible - we've been doing an anthropological study on it for the last twenty years. How have fourteen million workers in the United States been convinced until that the wage is negligible and the thing that they get from their boss - who’s profiting off the value of their labor - is negligible.
Saru Jayaraman: And the thing that they’re getting from the customer - their actual thing they earn - it's an incredible mind melt. And so I don't want to rely on the market alone and assume that workers are going to walk away from a bad situation without a lot of organizing or without some major catastrophe that kind of wakes them up to the fact that a two a two dollar wage was never acceptable to begin with.
Saru Jayaraman: I hear you, I think yes, it could give more power for workers. We've seen that certainly as unemployment for some has allowed them to reject bad jobs, but it's not been enough over at least the history of our country to ensure that we don't have absurdly low, literal slave wages.
Catherine Fieschi: This is great because it takes me straight into a question I want to bring up that’s come up in the chat which: [Patrick] “Is being able to say no enough? We're here to talk about belonging, in part. What strikes me is that we should be aiming towards a participatory economy and the co-production of wealth.” Actually, Martin you do talk about the coproduction of wealth in some ways. Can I bring you in to react to this question.
Martin Sanbu: I think there’s a -- we need to think about both what is the outcome we want to see and what's the means of getting there. So I would put it this way: the ability to say no is a very useful tool on the way to an economy where people don't really need to exercise that ability because they're mostly treated well.
Martin Sanbu: And where they're mostly treated well because employers know if they don't, then they would just leave. So you know, I’d like Simon who lives at least part time in Norway I think, at least, knows Norway very well and the Nordics very well, to talk about whether he agrees with how I'll describe some of the situation there, which is that the standards are generally high - there are exceptions but the standards are generally so high - that you just can't get away with treating people too badly because the norms have been lifted to a point where you would be called out as outrageous if you were doing some of things that happen in the U.S. for example.
Martin Sanbu: How do you get to that level? Once you are at that level, it can sustain itself because people will call you out for offering an underpaid job, right? Or there will be an uproar in the press and everyone will say, “No, no this is not acceptable” or policy makers and politicians will come into say, “Well this is possible we’ll have to fix it.” But if things like that are rare enough, you preserve an outrage factor. Whereas if they happen all the time then even the people that it happens to aren't outrages, which is Saru's problem I think. So this is one of many tools by which you can force this change gradually, but it takes time obviously.
Catherine Fieschi: Anybody like to come back to that? Simon you were called out specifically.
Simon Reid-Henry: I actually live full time in Norway but I do go back when there isn't a global pandemic to work in London. So I see both sides of the coin. I think you're right, I think there are perhaps two points to take from the Norwegian experience at least here.
Simon Reid-Henry: One is: yes, it’s much harder to get around labor standards. Definitively, it’s quite harder to fire people here. Now that can have in itself knock on effects - because it's hard to fire people, company’s employers can be very reluctant to take people on formally on contracts. So you kind of get this knock on effect of a turn to much shorter-term and flexible labor.
Simon Reid-Henry: So it's not like there isn’t a monopoly on the truth of the answer here in terms of the way. But Martin’s absolutely right - it works in a fundamentally different way. But I'll point out one other way in which I think it works quite differently, and this for me is why it helps to have different country experiences in mind always if one is working in cauldron of the UK with its regional inequality or in the U.S. with its racial inequality, it can be very hard to see outside of that particular dynamic and also incredibly hard and depressing to work through those things.
Simon Reid-Henry: Likewise one doesn't live just in the sunny uplands of Scandinavia. There are challenges here that we have to work through. One thing I think that maps across all those territories is the issue - and you talk about it Martin in the book in terms of feminist approach but I would talk about it in terms of gender - and that is the role of women in the workforce.
Simon Reid-Henry: So not women in certain careers, not women in caring for example, but just the number - the quantity of working age what people call it sort of core working age, twenty-five to forty-four, whatever the particular band is, I can't remember off the top of my head - of women who are in the labor force who are not at home just bringing up children, but who are actively in the workforce contributing to the national economy and that makes quite a substantial difference. So people often look to Norway and they sort of see the wealth fund as this kind of substantive, kind of safety net generator. But actually in many ways it's something as simple as having a lot more women who work and contribute to the tax base and so on and so forth.
Catherine Fieschi: That's great. I'm aware that we're going over, so I just want to finish on one point and then I'm going to give you each a couple of minutes to make your final points - your main points - the things you really don't want to leave without having said.
Catherine Fieschi: But I think that one of the things that I want to just to hone in on as we conclude on this panel is that this idea of being able to say no, which a number of you have brought up, I think that it points to the link between vulnerability and belonging. The kinds of consequences that that sense of vulnerability has in terms of people - whoever they are - feeling that they are part of a shared constructed home, social home, economic home, and the way that all of these fall together.
Catherine Fieschi: And I think that honing in on this, the capacity to say no, I mean in a way we've kind of latched on to this phrase, but it's an incredibly important expression of refusing a kind of vulnerability, refusing a kind of psychological state, which if you can't do has major political consequences.
Catherine Fieschi: And I think that this is important in terms of how we move forward thinking about the kind of institutions we need, the kind of reassurance that we need, the kind of politics we need in order to address those vulnerabilities. So I'm going to stop here and I am going to go in reverse order and each give you a minute. I'm going to start with you, Simon and then you, Saru, and then finish with you, Martin.
Simon Reid-Henry: Okay well, thank you. I think the one thing I really, really want to say is that this has been a huge privilege and I've learned so much from reading Martin's book and hearing your comments, Saru. I think I'll say one thing in conclusion that relates to my earlier points and I think in a sense where some of that discussion went.
Simon Reid-Henry: One of the values for me of geography is that it teaches us to see the world as if we were someone else. And there was a question that came up about co-creation, around bringing citizens and civic voice into the policy making to more deliberative forms of Democracy. And I think those are certainly ways in which we can mobilize the kind of package of solutions that Martin is talking about.
Simon Reid-Henry: Empathy and that sorts, in that sense solidarity, can be purple and moorkish if they're done wrong. But they can also be hard-headed and constructive. An example of the latter, I hope, is something that I've been engaged with in a very different context where we're trying to develop actually an international policy solution in the way that Martin is talking here about a national policy solutions called global policy investment. Which is a which of trying to find reasons of policy response and the physical mechanisms by which we can raise more public finance internationally for which things that globally we all need. In this case, for example, vaccines being the obvious example.
Simon Reid-Henry: So we’ve mentioned that COVID has shifted the needle on some things. I think it has. And I think in many ways what Martin tells us here about the national terrain, actually to my view, also could be applied internationally as well. There is a global economy. Martin talks about it in terms of globalization and rightly supports the value of globalization and open societies. Absolutely.
Simon Reid-Henry: But that global economy also has certain regimes through which it work and my view is we need to take the sort of work that Martin’s doing here for us at the national terrain and develop that more at the international domain. And that’s kind of really where I think some of the future wins for a more progressive, and new social contract are actually to be found and to be won. So thank you very much from me to all of you for your comments and contributions.
Catherine Fieschi: Saru, over to you.
Saru Jayaraman: Thanks to all of you as well. I wanted to close because I've been a lot of doom and gloom and hell and dumpster fire which is where we've been, but there's actually been a hopeful transformation through all of this and it relates to this power to say no because, look as I said sixty percent of these -- our workforce -- did not get any social safety net. They were just destitute for ten months.
Saru Jayaraman: And even in the face of that, so many millions of them refuse to go back to work in a restaurant for a two dollar job because the calculus of “go back to work for a two dollar job and expose myself to virus and possibly death - because our nation is so incompetent in its response to COVID - for a two dollar job when tips are down fifty to seventy-five percent” resulted in so many workers, even with no other recourse, deciding not to go back.
Saru Jayaraman: That resulted in us hearing from literally hundreds and hundreds of restaurant owners across the country - independent restaurant owners, not chains, not publicly traded corporations but small restaurant owners across the country - deciding voluntarily to change their wage structure to provide a full livable, minimum wage to all workers with tips on top, which was what we've been fighting for for so long.
Saru Jayaraman: And that led to policy change. That led to multiple states now working with us to change their wage structures on the sub-minimum wage. It led to the Biden Harris campaign deciding to endorse a full fifteen dollar minimum wage with tips on top. It led to congress, which the U.S. House of Representative for the first time since emancipation, voted to eliminate that ridiculous two dollar wage.
Saru Jayaraman: Hasn't moved in the Senate because we have a man named Mitch McConnell leading the Senate. But still there is lot of hope and a lot of momentum and it comes down to workers deciding that they would not take a two dollar a wage anymore during a pandemic -- it took a pandemic for them to say that but it goes a lot to your point, Martin, of we can create situations that maybe mimic a pandemic like this where workers can say no.
Saru Jayaraman: And they have and it creates not just -- it creates kind of tiers of change: company level policy change, state level, national, and then, as you’re saying, global policy change. And it's happening right now here in the midst of all the horror.
Catherine Fieschi: Thank you very much, Saru. Martin, over to you for a final words.
Martin Sanbu: Thanks. Thanks again to --
Catherine Fieschi: Can you stick with the positive narrative
Martin Sanbu: That's exactly what I wanted to do. It was very nice of Saru to move it in that direction. But thanks both her and Simon, and you Catherine, and everyone involved. I want to basically pick up where Saru left off and talk about -- also talk about how do policies and how does the politics change, how does change happen?
Martin Sanbu: So Saru was talking about the pressure from below, so let me kind of fill in with how do -- how does change happen at the top among the people who actually have the power, who have the institutional power? And the first thing I want to say -- I want to say two things. The first thing is things are already changing, right? And they have been changing for some time.
Martin Sanbu: And they've tended to change when well meaning people, because not everyone who chooses the right policies do it for bad selfish reasons, but because they think they're good policies. And the Global Financial Crisis and climate change and the rise of inequality, all of this is starting to sink in more. Kind of across the spectrum. So twenty, thirty years ago, every economist would tell you there's no point in having higher minimum wage because you hurt the people that you want to help because they're thrown out of work and won't find other jobs.
Martin Sanbu: That consensus has changed and that has helped, I think, together with campaigning, of course, at the grassroots. More and more local level, state level politicians saying, “Yeah let's push for this.” This is something we can without looking like crazy revolutionary, radicals, we can push for it. Just the kind of guardians of economic orthodoxy at the International Monetary Fund in their latest meetings in October area their latest reports - it looks like the state is back, right? This is all Washington consensus, free markets, deregulation, all of that they've put behind them. They're now quite, dare I say, progressive. They want regulation and intervention to combat inequality, to combat climate change. And that will create more growth they say.
Martin Sanbu: So the thinking has changed at all sorts of levels, very slowly, too slowly, but it's moving in the right direction. That's one reason to be optimistic. The other is, why is it that it's taken so long? It’s because it takes time for people kind of in the center to change their mind. I work at the financial times, it's not exactly the hotbed of revolution, but we do talk to the people who make decisions and a lot of those people are committed centrists, right?
Martin Sanbu: They're not ideologically blood boiling radicals on either side, but they kind of want to make things work, they have their own interest, they're kind of cautious, conservative in that sense, they don't want to be made to look like fools so they're kind of quite consensus minded. A lot of change happens when that group shifts their opinion.
Martin Sanbu: In a sense, my book is written a bit in that spirit to say, “Look there is a different way of thinking about this.” That people in the center can identify with. And what really convinces people is partly to kind of find a different intellectual frame that actually explains reality better. And reality has shown itself to not produce the good outcomes we all thought in the nineties, or centrists thought in the nineties. Over the last ten, fifteen years, people are realizing that.
Martin Sanbu: People aren’t stupid, they can be selfish, but more and more people see that and say, “Okay well let's think about doing something differently.” So I think there's an opportunity here to, yes you need the campaigns among the people who suffer the most, but you know get that kind of slightly lukewarm middle of people who are doing okay out of all the changes we've had, people in our sorts of positions to say, “Well, actually it kind of makes sense for all of us really, it's unproductive to have people being paid too little, it unproductive to have whole parts of the country not having better jobs than this. It would be good for everyone to find some sort of change, what can it be.”
Martin Sanbu: So I think we're all in various ways working towards that. But things are kind of on the move. And I think if we do this right, the pandemic will have helped because it opened a lot of people's eyes to how badly things are at the lower end of the labor market or outside of the labor market. It opened people's eyes to how vulnerable people are to risk and made people think, “Well actually maybe we need to think about socializing risk again.”
Martin Sanbu: So we're in this sort of very fertile moment of possibilities that I think we can use. But if we want to use that, we need to find to a way to present the case for change. Even to those who -- they're kind of comfortable enough without change, but we need to get the middle on to the side of the people who are marginalized, who are left behind, and so forth. And I think we can. I think this sort of conversation helps so, thank you all for taking part.
Catherine Fieschi: Thank you ever so much, all of you really thank you to my three speakers. Again, I can't recommend Martin's book enough, it's a really fantastic read. Don't let the fact that he's an economist put you off. It's beautifully written, beautifully argued and a real treat.
Catherine Fieschi: I also want to thank the Othering and Belonging Institute and ask you also to too tune into our digital belonging dialogues. I feel like we've barely scratched the surface because we've barely scratched the surface. So I'm hoping that maybe we can schedule a part two - possibly after January 20th - you know, and actually have a look at developments a few months down the road and see whether we can keep being positive. In the meantime thank you very much all of you. Have a good day and a good evening wherever you are. Thanks a lot.