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The Central Contradiction of the Democrats’ “Better Deal”

Democrats get that the odds are stacked against workers. So why are workers treated like they’re part of the problem?

Brendan Smialowski/Getty Images

Eight months after their devastating loss to Donald Trump, Democrats have finally decided to coalesce around a core message to strengthen their position as they head into the 2018 midterms. They are focusing squarely on so-called kitchen table issues: jobs, wages, and the price of everyday needs. They are also approaching these issues through a new, systemic framework: The “Better Deal” agenda that they rolled out on Monday acknowledges that the economy is skewed in favor of big corporations and against workers. It promises to increase pay, which has been stagnant for decades, and full-time employment.

But there is a glaring contradiction at the agenda’s heart, one that shows that Democrats still haven’t learned how to address the profound problems that plague our economy: They’re still too quick to blame workers themselves for their own economic plight.

The Better Deal is deeply interested in the fairness, or lack thereof, of today’s economy. “There used to be a basic bargain in this country that if you worked hard and played by the rules, you could own a home, afford a car, put your kids through college, and take a modest vacation every year while putting enough away for a comfortable retirement,” Senate Minority Leader Chuck Schumer wrote in a New York Times op-ed, arguing that special interests have been allowed to rewrite those rules in their own favor. And, he noted, “[F]or far too long, government has gone along, tilting the economic playing field in favor of the wealthy and powerful.”

In her own version of this argument in The Washington Post, House Minority Leader Nancy Pelosi declared that Americans are struggling in “a rigged economy and a system stacked against them.”

They put the blame in the right place: shoddy antitrust regulation that has allowed for immense concentration and a decline in competition. The plan promises to “crack down on monopolies and the concentration of economic power”—bringing back a concept, monopoly power, that has all but disappeared from political conversation. In the current regulatory regime, Schumer wrote, “our system favors short-term gains for shareholders instead of long-term benefits for workers.”

There are numerous signs of increasing concentration among the biggest American businesses. Between 1997 and 2012, the 50 largest companies in each industry increased the share of revenue they vacuumed up; in some industries, such as finance and utilities, half or more of all revenue goes to these giant firms. There are now just four major airlines and two major corporations dominating the beer market. Only about 18 percent of households can actually choose between different high-speed internet providers. Meanwhile, there are fewer and fewer new companies being started each year that could challenge the grip of these big players.

But while Democrats have accurately diagnosed one of the diseases hurting the current economy, their cure is much less astute.

To address industry concentration, the agenda calls for a new entity they’ve nicknamed the “Trust Buster” that would more closely scrutinize proposed mergers between big corporations and review them after they have been completed to ensure they aren’t distorting markets. Much of that focus appears to be on ensuring better prices for consumers, singling out the airline, beer, eyeglass, food, and telecom industries—all of which have consolidated significantly.

What they don’t mention, however, is the impact a lack of competition has also had on job creation and wages. If huge, consolidated corporations don’t have to fight each other for workers, they don’t have an incentive to increase compensation to attract them. Researchers have found this to be the case: American industries that have seen the biggest increases in concentration have also seen the biggest declines in workers’ share of the spoils. Today, instead of putting their profits toward hiring more full-time employees or increasing the pay of existing ones, their money is increasingly going to payouts for shareholders.

Leaving out that aspect of the issue is partly why, when it comes to jobs and pay, the Democrats’ new ideas go off the rails. When news of the agenda leaked late last week, the slogan for the whole package was “Better Skills, Better Jobs, Better Wages.” Echoes of Papa John’s aside, the prioritizing of skills as the key to unlocking opportunity stands in opposition to how Democrats are describing the economy.

In Monday’s document, “better skills” was dropped in favor of “Better Jobs, Better Wages, Better Future.” Yet the idea that Americans need to level up to get ahead hasn’t been scratched out. Schumer promised that Democrats are “going to provide workers with the tools they need for the 21st-century economy,” which implies that workers are struggling because they don’t have the right tools.It’s far too common that Americans who are eager to work hard and earn a good living are left behind because they don’t have the skills needed to compete in a changing economy,” the Democrats’ document states, arguing that a “decline in skills development has resulted in job insecurity for workers and a lack of qualified labor for American businesses.”

To address this, Democrats are calling for a doubling of federal spending on apprenticeship programs and a new tax credit for employers to train and then hire workers at a good wage. They are also encouraging businesses to partner with high schools and community colleges to improve recent graduates’ access to employer networks.

Thus Democrats put much of the onus on workers themselves, not on the system that isn’t working in their favor. If the whole game is rigged, as Schumer says it is, why should Americans get better at swinging the bat or kicking the ball? Corporations will still ensure that the final score is skewed in their favor: lower pay for workers and a bigger slice of profits for shareholders. Not to mention that there is limited, if any, evidence that the reason companies aren’t hiring more workers is because there aren’t enough people with the necessary skills.

Americans know that they need to keep improving their own skills to keep up with their jobs. But they don’t want the government to prioritize helping them with it. Perhaps it’s because they realize it’s not an answer to the systemic issues they face. Government should be focused on creating an equitable system so everyone has a real chance.

In a different section, the Democrats’ agenda makes a bold promise to create 15 million good paying jobs through an infrastructure program, as well as to raise the minimum wage to $15 an hour so that people are paid better in the work they already have. Cracking down on bosses who have grabbed so much economic power that they don’t have to raise wages or create jobs, and then pledging to increase jobs and wages directly, go a long way toward directly addressing the economic pain Americans have been feeling for decades. It’s too bad Democrats had to muddy this message with concern trolling about a lack of skills.