The New Social Contract
By Judith Rodin
During and after the great depression, workers, employers and the government entered into an implied social contract that afforded Americans a basic level of economic security if they worked hard and took responsibility for their families. In a new TIME/Rockefeller Foundation survey, however, Americans give voice to a very different reality: the 20th century's social contract is unraveling, they say, and almost all of us--8 in 10, in fact--yearn for a new bargain to help meet 21st century challenges.
It may well be that the U.S. is a nation off track and worried, but it's also a nation seeking solutions--new rules and new tools--and calling on its leaders for change. Americans want new public policies and very different financial products to help them when the hurt is greatest. They are looking for answers that go far beyond quick fixes to the current mortgage and banking crises.
Americans overwhelmingly support major government investments to create jobs that won't go offshore--public-works and energy-efficiency projects in particular. They favor new policies that reward hard work, including a boost in the minimum wage, employer-paid family leave and more available, affordable child care. They want new ways to save and invest.
There is no one-size-fits-all solution to America's economic challenges. In a dynamic marketplace, with a more diversified workforce, different segments of society require services and support tailored to their needs. The good news is that innovators from both the public and private sectors are experimenting with new approaches, pushing government to live up to its end of the bargain and helping Americans strengthen their resilience in the face of economic risk. The Rockefeller Foundation has launched a $70 million Campaign for American Workers to expand these efforts by helping shape new policy proposals and financial products that promote and protect savings, access to health care and secure retirements.
When it comes to savings, workers want new resources to weather unforeseen income interruptions, especially in an increasingly volatile economy. A nonprofit in Boston is encouraging low-income workers to invest a portion of their tax refunds in savings bonds. Its average bond purchaser's profile is that of a single working mother with an income under $21,000, acquiring the bond for her children--a powerful testament to the idea that working people will make responsible choices if given the right opportunities. On the health-care front, a New York--based organization is developing ways for independent workers to share risk by buying into group plans, bringing affordable coverage into reach for more contractors and freelancers, who now make up one-third of the U.S. workforce.
The TIME/Rockefeller Foundation survey showed that the U.S.'s youngest workers are, stunningly, its most pessimistic about the nation's economic future, and half of them are uninsured. Equipping them with tools to bolster their economic security takes on special urgency. In response, an innovative start-up, working with labor organizations, targets health-care counseling, savings, credit and other low-cost, portable products to the needs of these younger workers.
Americans also need ways to shore up their retirement--particularly as traditional pensions disappear--and they need help stewarding the retirement money they receive. So one consortium of public-policy research groups is exploring ways to link retirees who get lump-sum 401(k) payouts with services to help them manage their money for the long term.
In a precarious economy, finding the right solutions depends, in part, on understanding our workforce's diversity. One global consulting group is segmenting the marketplace to help workers of various stripes pinpoint products and services they most need. The same group is identifying opportunities to improve benefits at jobs that are least likely to be outsourced.
In September 1932, against the backdrop of a great and deepening depression, presidential candidate and New York governor Franklin D. Roosevelt declared that Americans must "recognize the new terms of the old social contract." Today, amidst the currents of global economic transformation, our challenges are no less substantial. We must again renew the tenets of a timeless bargain, but for a very different future.
Rodin is president of the Rockefeller Foundation