US Economy

An Evolving Social Contract for a Changing Economy

September 7, 2016

Key Points

  • The United States' rapidly shifting economic landscape demands similar changes to our workforce.
  • The Aspen Institute has launched the Future of Work Initiative, built to explore the ways that the U.S. can both adapt to and benefit from these shifts.
  • This week the Future of Work Initiative is launching The Fresh Perspective Series: ideas and conversations on the future of the workforce by experts from across the ideological spectrum.

(Photo Credit: istockphoto)

(Photo Credit: istockphoto)

Two fundamental elements of the American character have shaped our economy from the beginning — an insatiable spirit of invention and an unrivaled work ethic. Yet as we invent a future of driverless cars and on-demand labor, Americans rightly wonder how to maintain those core values and the workers and enterprises that advance them. The future still seems full of marvels, but is the promise of work in doubt?

Our ingenuity and innovation have ushered in an era of unprecedented possibilities — but those same forces have raised new questions about what the future might hold for American workers. The economic landscape is changing far faster than our 20th century social contract can keep up, and the pace of change is only likely to accelerate in the years to come.

Our ingenuity and innovation have ushered in an era of unprecedented possibilities — but those same forces have raised new questions about what the future might hold for American workers.

The opportunities and challenges of the future require us to once again rethink our social bargain to ensure that the right incentives are in place to protect the economic security of hard-working Americans and the prosperity of American businesses. The principles that should guide us are not new: work is not just a living, but an endeavor that gives structure, dignity, and purpose to our lives; those who do the work are not a cost of doing business but the wellspring of productivity, creativity, and success; and that enterprises should not only have the ability to hire and train a reliable workforce, but also continue to innovate and remain competitive over the long term.

With the leadership of honorary co-chairs Mitch Daniels and Sen. Mark Warner (D-Va.), we and the Aspen Institute launched the Future of Work Initiative to explore how we as a nation can restore the promise of work by harnessing — rather than stifling — the opportunities that the new economy presents.

Over the past year, this Initiative has conducted broad research, worked with key partners to launch two surveys of independent workers and businesses, and held countless forums and meetings with top leaders across the country. The research and experts and stakeholders across sector, across party, and across the country steered us to three key approaches.

First, we need more and better tuned data – on who these workers are, what industries they are penetrating, and what safety net they need, together with data from businesses on trends in independent contracting, training and education of their workers, and benefits they provide — so we know how policy can best promote a healthy economic climate.

Second, we need to make our system of benefits and protections more flexible and portable, to better meet the needs of modern workers and businesses alike.

And finally, we need creative ideas on what protections our new safety net should include, recognizing that the needs of modern workers are evolving just as quickly as the economy in which they work.  The social contract for the 21st century is itself ripe for innovation.

This week, the Future of Work Initiative launches The Fresh Perspective Series – a collection of independent works from authors across the ideological spectrum, presenting creative ideas for how various aspects of the social safety net could be updated to better meet the needs of our 21st century workforce. We don’t have all the answers, but new thinking should challenge our assumptions and prompt deeper discussion of the issues.

  • Jim Capretta of the American Enterprise Institute outlines the need for benefits and protections that are more portable and less reliant on a traditional employment relationships, and examines our existing social safety net to determine which types of benefits are already portable and which could be reformed to address the needs of a less secure workforce;
  • Felicia Wong and SuSan Holmberg of the Roosevelt Institute emphasize the need for wage insurance to protect against income loss from job displacement, but find that existing proposals focus on wage-based work, requiring us to innovate different models for independent workers in non-wage jobs such as project-based contract work;
  • Jonathan Gruber of MIT examines the difficulty modern workers face in building appropriate savings for both short-term shocks and long-term security, and proposes a new universal savings vehicle, the “security account,” which would provide workers with greater economic security in a world of income volatility and less stable work arrangements; and
  • Cesar Conda and Derek Khanna – conservative policy minds who have worked in the White House and in Congress – outline a proposal to reform the social safety net by using the on-demand economy to connect unemployed workers to available work opportunities.

We hope that this series can help spark a conversation around how to restore the promise of work in the context of a rapidly changing economy. Only through bipartisan leadership on these important issues can we come together as a nation to meet the challenges of tomorrow and revitalize the American Dream.