Social Europe

politics, economy and employment & labour

  • Themes
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

Why US Democrats Must Derail Republican Party Nationalist Populism With Economic Populism

George Tyler 15th February 2016

George Tyler

George Tyler

The Republican presidential aspirant nominated at this summer’s convention is likely to become that party’s nominee in part by invoking jingoist and xenophobic themes drawn from the playbooks of eastern European authoritarians. Miloš Zeman, the Czech President asserts, for example, “I do not want Islam in the Czech Republic.” And Hungarian premier Viktor Orbán has declared “We would like Europe to remain the continent of Europeans.” Such nationalist populism also has a prominent historic role in the U.S., featuring at times scapegoating of Irish, Catholics, Asians, Jews and Eastern Europeans.

Now the targets are Muslims and Latinos. This theme can be countered by Democrats with appeals to cosmopolitan America’s better angels – its Judaeo-Christian, immigrant and liberal democracy roots, its diverse and welcoming culture and its visceral anti-authoritarianism. But those angels will be more persuasive when combined with a compelling Democratic narrative of economic populism.

There lies a problem. Democrats have been in power for 8 years with paltry results for the middle class. Real wages have risen steadily in Australia and northern Europe in this period, yet stagnated in the U.S., income disparities widening. Indeed, the mean 2.5 percent real wage gains by German workers in 2015 alone exceeds the cumulative rise in median real American weekly wages since 1979. Wall Street malfeasance goes unpunished. Collective bargaining is not prioritized despite supermajority support for unions as devices to raise wages.  The carried interest tax loophole remains wide open. Trade agreements give short shrift to wage concerns. Tax inversions have become commonplace. America has earned a reputation globally as a tax shelter for the rich, worse than Luxembourg or the Cayman Islands. Even long overdue EU steps to close tax loopholes exploited by multinationals are demonized by Obama administration Treasury officials.

Warring on Wages

Some of this dismaying record reflects Republican Party intransigence. But a considerable portion is self-inflicted by President Obama, lending credence to Republican attacks on wage stagnation. Such attacks are disingenuous because higher wages have been a third rail of Republican politics since President Reagan. Its recent history is a litany of wage suppression: a political party determined to slow the recovery while opposing minimum wages, collective bargaining, higher overtime pay, paid sick-leave and the like. They reject linking wages to productivity gains or to CEO pay. That party is centered in corporate America unduly prioritizing profits at the expense of wages. Demographically, it is centered in the American south, home of right-to-work laws. And Republicans have enjoyed some success in expanding right-to-work laws and in torpedoing minimum wage laws to the Midwest, causing regional wages to drop: the wage differential between the Midwest and the non-union South across all industrial sectors, for instance, fell from $7 per hour in 2008 to $3.34 per hour in 2011.

Economic Populism: A Reform Agenda of Codetermination and Wages Linked to Productivity

Pew polling finds that Democrats are viewed as more attentive than Republicans to middle class worries. But electorally, this edge is threatened by Republican nationalist populism and economic frustration.  And their electoral success in November may well hinge on a visionary agenda of economic populism. The gig economy certainly poses unique challenges, but more seminal are concerns about job offshoring and wage suppression.

Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content.


We will never send you spam and you can unsubscribe anytime.

Thank you!

Please check your inbox and click on the link in the confirmation email to complete your newsletter subscription.

.

The poster child for wage suppression globally is Amazon which delinks wages from productivity and aggressively rejects collective bargaining. Even in Germany, competitors like Otto or Hermes Fulfillment are obligated to pay more under regional collective bargaining agreements reached by employers and workers, with rogue Amazon profiting by being the first to drive wages to the bottom.

The one proven remedy across the globe for offshoring and wage suppression is codetermination. It should form the heart of a visionary Democratic agenda, drawing on its proven success in Germany and her neighbors. German codetermination has succeeded decade after decade in nurturing and sustaining a high wage economy because corporate policies at larger (> 1,000 employee) enterprises reflect considered deliberations by boards of directors not in thrall to short-termism or narcissistic activist investors. Is codetermination socialism?  No. It strengthens capitalism. Wages are higher; labor force skill levels are higher; and offshoring enhances rather than harms domestic wages. Indeed, investors award a higher Tobin Q to firms practicing codetermination, powerful evidence that shareholders stand to gain.

The vision should also include the anticipation that every worker will share in the gains from growth. That means a national expectation like Australia or Germany that wages in every job in every corner of America will rise each year by the sum of inflation and a hefty portion of productivity growth. Another conceptual precedent is the de facto UK wage increase standard documented recently by the Financial Times.

Electoral success for Democrats in November will hinge on muting Republican nationalism with economic populism centered on raising wages. Democrats should break with the uninspiring Obama legacy by redefining their vision of the American economic experience to include reformation of corporate governance and linking wages to productivity.  Few Americans would defend the behavior of U.S. executive suites and most would welcome a powerful, seasoned alternative to misfiring quarterly capitalism.

wood burning,coal,biomass
George Tyler

George Tyler is a former US deputy Treasury assistant secretary and senior official at the World Bank. He is the author of What Went Wrong: How the 1% Hijacked the American Middle Class ... And What Other Nations Got Right.


We need your support


Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable, however, we depend on the solidarity of our readers. Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. Thank you very much for your support!

Become a Social Europe Member

Home ・ Politics ・ Why US Democrats Must Derail Republican Party Nationalist Populism With Economic Populism

Most Popular Posts

schools,Sweden,Swedish,voucher,choice Sweden’s schools: Milton Friedman’s wet dreamLisa Pelling
world order,Russia,China,Europe,United States,US The coming world orderMarc Saxer
south working,remote work ‘South working’: the future of remote workAntonio Aloisi and Luisa Corazza
Russia,Putin,assets,oligarchs Seizing the assets of Russian oligarchsBranko Milanovic
Russians,support,war,Ukraine Why do Russians support the war against Ukraine?Svetlana Erpyleva

Most Recent Posts

trade,values,Russia,Ukraine,globalisation Peace and trade—a new perspectiveGustav Horn
biodiversity,COP15,China,climate COP15: negotiations must come out of the shadowsSandrine Maljean-Dubois
reproductive rights,abortion,hungary,eastern europe,united states,us,poland The uneven battlefield of reproductive rightsAndrea Pető
LNG,EIB,liquefied natural gas,European Investment Bank Ukraine is no reason to invest in gasXavier Sol
schools,Sweden,Swedish,voucher,choice Sweden’s schools: Milton Friedman’s wet dreamLisa Pelling

Other Social Europe Publications

The transatlantic relationship
Women and the coronavirus crisis
RE No. 12: Why No Economic Democracy in Sweden?
US election 2020
Corporate taxation in a globalised era

Foundation for European Progressive Studies Advertisement

EU Care Atlas: a new interactive data map showing how care deficits affect the gender earnings gap in the EU

Browse through the EU Care Atlas, a new interactive data map to help uncover what the statistics are often hiding: how care deficits directly feed into the gender earnings gap.

While attention is often focused on the gender pay gap (13%), the EU Care Atlas brings to light the more worrisome and complex picture of women’s economic inequalities. The pay gap is just one of three main elements that explain the overall earnings gap, which is estimated at 36.7%. The EU Care Atlas illustrates the urgent need to look beyond the pay gap and understand the interplay between the overall earnings gap and care imbalances.


BROWSE THROUGH THE MAP

Hans Böckler Stiftung Advertisement

Towards a new Minimum Wage Policy in Germany and Europe: WSI minimum wage report 2022

The past year has seen a much higher political profile for the issue of minimum wages, not only in Germany, which has seen fresh initiatives to tackle low pay, but also in those many other countries in Europe that have embarked on substantial and sustained increases in statutory minimum wages. One key benchmark in determining what should count as an adequate minimum wage is the threshold of 60 per cent of the median wage, a ratio that has also played a role in the European Commission's proposals for an EU-level policy on minimum wages. This year's WSI Minimum Wage Report highlights the feasibility of achieving minimum wages that meet this criterion, given the political will. And with an increase to 12 euro per hour planned for autumn 2022, Germany might now find itself promoted from laggard to minimum-wage trailblazer.


FREE DOWNLOAD

ETUI advertisement

Bilan social / Social policy in the EU: state of play 2021 and perspectives

The new edition of the Bilan social 2021, co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), reveals that while EU social policy-making took a blow in 2020, 2021 was guided by the re-emerging social aspirations of the European Commission and the launch of several important initiatives. Against the background of Covid-19, climate change and the debate on the future of Europe, the French presidency of the Council of the EU and the von der Leyen commission must now be closely scrutinised by EU citizens and social stakeholders.


AVAILABLE HERE

Eurofound advertisement

Living and working in Europe 2021

The Covid-19 pandemic continued to be a defining force in 2021, and Eurofound continued its work of examining and recording the many and diverse impacts across the EU. Living and working in Europe 2021 provides a snapshot of the changes to employment, work and living conditions in Europe. It also summarises the agency’s findings on issues such as gender equality in employment, wealth inequality and labour shortages. These will have a significant bearing on recovery from the pandemic, resilience in the face of the war in Ukraine and a successful transition to a green and digital future.


AVAILABLE HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us on social media

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube