WASHINGTON — The 2024 UK General Election was nothing short of extraordinary, with Keir Starmer’s Labour Party securing a sweeping victory. But beneath the celebration lies a critical divide: Labour dominated the graduate vote, yet it lagged behind among non-graduates, an electorate that remains pivotal to long-term success. If Labour wants to sustain its victory — and if Democrats in the U.S. hope to learn from it — there is work to be done.
Today, the Progressive Policy Institute (PPI) unveiled a new report, Winning Working Britain: Work and the Economy, authored by Claire Ainsley, Director of the Project on Centre-Left Renewal at PPI. The report reveals that Labour’s margin among working-class voters was far narrower than its lead among graduates, and if the party is to maintain its electoral strength, it must address the needs of non-graduates, who remain skeptical.
“Labour’s success in winning back working-class voters is a remarkable achievement, but to build a sustainable coalition, the party must pay greater attention to non-graduates,” said Ainsley. “The same lesson applies to Democrats in the U.S. who have long struggled to balance their support base between college-educated voters and those without degrees.”
The report highlights key policies favored by working-class voters, particularly non-graduates. Among these, the top priority is affordable non-degree pathways to well-paying jobs, such as short-term training programs that combine work and learning. British workers also expressed a strong desire for more well-paid jobs that don’t require a university degree, especially in trades and the digital economy — sectors they see as offering the best opportunities for their children.
“Labour’s challenge now is to deliver on these economic aspirations. By focusing on expanding non-degree career opportunities and boosting wages for those without a college education, the party can bridge the gap and ensure its long-term success,” Ainsley added.
The report concludes with actionable recommendations for center-left parties, emphasizing the need to elevate the voices and interests of non-graduates. It serves as a roadmap not only for Labour but also for Democrats in the U.S. as they seek to rebuild their own coalition ahead of the 2024 elections.
For further U.S.-focused insights, former PPI Director of Workforce Development PolicyTaylor Maag highlights better career alternatives to college and offers specific policy recommendations for the U.S. audience in her report, “Career Pathways: How to Create Better Alternatives to College.”
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
The July general election result was extraordinary in many ways, not least because of the stark divide in the votes of graduates and non-graduates. Labour ate up votes amongst those with a university degree, defeating the Conservatives by 42 points to 18.
But the Tories did slightly better than Labour amongst those with GCSEs or lower (31 vs 28). And if Reform hadn’t stood, that gap might have been wider, as 23% opted for Reform this time around.
With a 411 majority, its tempting to bank the wins. But in the longer term, and certainly by the time of the next election, Labour would do well to pay attention to how the party can improve its position amongst non-graduates.
On 4th July 2024, Keir Starmer’s Labour Party achieved a landslide victory at the UK General Election, winning 411 out of 650 parliamentary seats in towns, cities, suburbs across England, Scotland and Wales.
Labour reversed its historic decline amongst working-class voters, as a result of a specific strategy to reconnect the party with voters that had formed a critical part of their founding electoral coalition. This matters not just for its symbolism, but because there is simply no route to a parliamentary majority in British politics without winning significant numbers of working-class voters. It also matters because it shows to center-left parties around the world that it is possible to win over lost working-class voters, a crucial part of the winning electoral coalition.
However a sizable portion of working-class voters in particular opted for new party Reform UK, and underneath Labour’s considerable achievement is a recognition that many voters feel sceptical that any party can really deliver for them. As Labour moves from campaigning to governing, they will need to be just as focussed on winning over working-class voters as they were in opposition.
Using data collected in the run up to the UK General Election, this new PPI report outlines the priorities of Britain’s working-class voters on the area that matters most to them: work and the economy. It builds on the foundational report on the global center-left, PPI’s ‘Roadmap to Hope’ published in October 2023. The reports are the UK companion to PPI’s Campaign for Working Americans, which aims to refocus the Democrats on regaining the allegiance of working Americans by championing their economic aspirations and moral outlook.
Our aim is to help catalyse a dynamic, modern center-left that can win the support of workingclass voters by providing better answers than the political right to the challenges they face. We are willing UK Labour to succeed in government, and the Democrats to succeed in their campaign to retain the Presidency. The opportunity facing the centre-left is to be the dynamic force that brings back hope to working class voters, so that they face the future with optimism about the prospects for themselves and the next generation.
In ‘Roadmap to Hope’, PPI research found that working-class voters felt the deal whereby if you worked hard you can get on in life had broken down. We argue that the centre-left cannot win and sustain power purely by being the beneficiaries of disenchantment with the political right, but by building a programme that addresses people’s security and prospects for the future.
PPI outlined a set of practical ideas to re-make the deal for working people with the following goals:
1. Relentless focus on raising wages for those on low to middle incomes
2. Stabilise supply and costs of essential goods and services
3. Open up housing investment to the next generation
4. Reform school education to become the driver of progress
5. Replace ‘one rule for them’ with ‘same rules apply’, including on immigration.
This report focusses on the experience and wants of working-class voters on work, costs and the economy, and the political and policy solutions to form the winning centre-left agenda.
“Community colleges may prove the saving grace of college-level learning in America,” wrote historian Sean Trainor in a 2015 article in TIMEmagazine.
Today, almost a decade later, two recent reports echo this notion in their call for community colleges to up their game and make a major contribution to improving the futures of young people and working-class Americans who don’t have college degrees.
Both reports describe the role these institutions should play in expanding America’s workforce education and training efforts, especially by greatly increasing the number of employer-connected apprenticeships and creating a new learning campus that combines paid work and education.
For at least the last 25 years, the primary goal of American K-12 schools could be summed up in three words: college for all. As a consequence, most K-12 schools today don’t see career education as central to what they offer. Emphasizing vocational training and experience is thought to undermine the lofty ideal of ensuring that every student attends college and completes a four-year degree.
Though it stems from noble intentions, our focus on preparing students for higher education does not serve them well. Rather, it fails to provide young people with the practical knowledge and skills that would benefit them once they graduate. It also produces an experience gap. Young people leave high school with little understanding of the world of work and the pathways to employment. This disconnect makes it more difficult for them to transition from school to a career.
Today, college for all has lost significant public support. Many no longer believe that a college degree is the default route to success. At the same time, older ways of preparing for a career are gaining popularity.
While both Democrats and Republicans expressed support for alternative pathways to college – and even passed the 2015 American Apprenticeship Initiative, giving more than $100 million to expand registered apprenticeships into new sectors – much of the focus remained on higher education.
Will Marshall, founder and president of the Progressive Policy Institute, a center-left think tank, said he remembers being criticized by more liberal friends for not embracing college-for-all policies. Marshall had advocated for public investment in apprenticeships and non-college career programs.
The tone began to change, he said, shortly after Trump was elected in 2016.
“People began to look at what I think is the most important development of national politics, which is the polarization of the parties along educational lines,” Marshall said.
That year, Trump won more support from voters without a college degree, whereas his opponent, Hillary Clinton, garnered more votes from college graduates.
The outcome was a wake-up call for progressives, Marshall said.
“It dawned on people that the non-college majority, including the hardcore Trump supporters, weren’t looking for college, they were looking for short-term training and accreditation programs, other ways to break into the labor market,” Marshall said.
“We’re living at a time where partisanship seems to be off the charts,” Marshall said. “Even issues that aren’t intrinsically ideological or partisan can get caught up in the new imperative of non-cooperation.”
For instance, the Biden administration in 2021 rescinded a Trump-era rule that allowed industry and trade groups to develop and oversee their own apprenticeship programs. They argued the industry apprenticeships were often inferior to ones approved by the Department of Labor.
Like most policy, Marshall said passing workforce solutions under the next president – whether it’s Trump or Harris – will require some give and take.
“People are looking for alternative pathways,” he said. “It’s the responsibility of our nation’s political leaders to make sure that we have a system for non-degree folks to earn and learn that is as robust as our post-secondary or higher education system.”
It looked like an ordinary, modest house on the outskirts of Sloviansk, a small city just behind the front line in eastern Ukraine. But the parlor’s heavy furniture had been replaced by folding tables and six big flat-screen TVs. Five men in fatigues monitored the images flashing across the screens: direct feeds from some three dozen first-person-view (FPV) drones hovering above the front line just 15 miles away.
There were no fighters in the images and no weapons or military vehicles. Both Russians and Ukrainians have learned to keep all that hidden from the drones constantly swarming overhead. But the invaders could still advance at any moment, and the soldiers in the command center — members of a new unit called “Heavenly Punishment” — scoured the video feeds, zooming in and out on tree lines and scattered rocks that might disguise foxholes.
A sixth screen integrated the information from the feeds: a giant animated map showing both sides’ positions and assets — a Russian tank here, a Russian surveillance drone loitering there. No one spoke as the men watched and probed, waiting for the opportunity to order a strike, either by an attack drone or one of the unit’s few remaining artillery cannons.
Ukrainian President Volodymyr Zelensky made a couple of unforced errors in the last few weeks. They were all small things, the kind of missteps we all make occasionally, and even on the world stage, they might have gone unnoticed. But the Ukrainian leader had no idea what he was up against—a Republican party determined to turn him and the global conflict in Ukraine into this cycle’s political football.
Zelensky and his team had been working for months to cultivate Donald Trump and his entourage. It wasn’t just, as Zelensky said in the letter he sent to Trump on Thursday, that he had always tried to show “respect” for the former president. Like other governments across Europe, the Ukrainians were well aware that Trump had at least an even chance of retaking the White House, and they were determined to establish a relationship. Some even hoped that Trump could be a friend—that unlike Joe Biden and Kamala Harris, who have given Kyiv just enough help to hold off the Russian army but not enough to win, Trump might be more decisive, forcing a definitive outcome that might benefit Ukraine.
Kyiv worked tirelessly to forge ties to anyone who might have Trump’s ear—former Secretary of State Mike Pompeo, Sen. Lindsey Graham, former British Prime Minister Boris Johnson, and others. Zelensky held his tongue no matter what Trump said about Ukraine or what foolish boasts he made about ending the war in 24 hours. The Ukrainian leader even called Trump after the first assassination attempt, and the two had what Trump reported was a “very good” conversation.
Vice President Kamala Harris has righted her party’s capsized ship and opened a small but consistent lead over Donald Trump in national polls. Now comes the decisive test: Charting a winning course in the Electoral College.
To attain a majority of 270 votes or more, Harris and her running mate, Minnesota Gov. Tim Walz (D), must carry at least three, and in some scenarios four of the seven battleground states. All look like dead heats today.
They can count on a strong turnout by a reenergized Democratic base, but that won’t be enough. You can’t win swing states without winning swing voters. The campaigns are spending prodigiously in these states to sway roughly 3 million voters who tell pollsters they’ve yet to make up their minds.
But the GOP presidential nominee wasn’t kidding about his magical solution for the national debt, which Republicans only seem to care about during Democratic presidencies. In fact, Trump made the same suggestion in a Fox News interview last month, saying that “a little crypto check” could “wipe out” the $35 trillion. If it were that easy, one wonders why he didn’t do it during his first term.
FACT: In a hypothetical Trump/Vance economy, a toaster would cost about $300.
THE NUMBERS: Toaster prices, September 2024* –
Model / Range
Made in
Price
Milantoast
Milan
€335
Dualit “Classic”
West Sussex
£170 – £249.99
Mitsubishi Electric TO-ST1-T
Suburbs of Tokyo
$246.68
Neiman Marcus range
$90 – $900
Walmart/Amazon/Target/Costco/Macy’s range
$15 – $40
* PPI surveys for mainstream retailers and Neiman Marcus prices; Amazon for the TO-ST1-T; manufacturer sites for Dualit Classic and Milantoast.
WHAT THEY MEAN:
Here’s Vice Presidential aspirant Senator J.D. Vance in Nevada last July: “We believe that a million cheap knockoff toasters aren’t worth the price of a single U.S. manufacturing job.” The unspoken converse (and as explained below, the more realistic interpretation) is that no toaster price would be too high to shift a single worker into U.S.-based pop-up production. Here’s what this might mean:
Background: If you haven’t recently bought a toaster, mainstream retailers sell them at prices typically between $15 and $40. (We checked Target, Costco, Amazon, Macy’s, and Walmart. You can pay more if you like, of course.) Your purchase won’t be U.S.-made, unless you’re a specialized buyer: kitchen appliance manufacturers do make toasters here, but only big conveyor types for restaurants and hotels. As an example, Holman Star’s factory in Smithville, Tennessee, produces machines in a range from the $1,487 QCS1-350, which browns 350 slices an hour, to the 2,000-slices-per hour Star DT-14 Double Conveyor at $7,273. No U.S. company, though, makes a small home pop-up here.
Overseas Comparisons: Home toaster-making in wealthy “peer” economies, however, is perfectly possible. Firms in the U.K., Italy, and Japan make them now. They’re pricey, though. The U.K.’s Dualit Classic, with a silvery ‘retro’ look drawn from 1950s design, is “hand-built” in West Sussex and sells at prices from £170 for a two-slice model to £249.99 for a 6-slicer. (At $1.31 per pound sterling, this is $250 to $360.) Italy’s Milantoast makes an austere designer-black two-slice pop-up in Milan for €335. ($372, at $1.11 per euro.) And Mitsubishi Electric’s futuristic TO-ST1-T, launched in 2019 and made in two factories outside Tokyo, blends a tea-ceremony-suitable “simple shape and wood grain” look with high-tech programming to provide the precise browning of your choice, preserve the bread’s interior moisture, and offer “fluffy French toast,” “Korean street egg toast,” and DIY options. A connoisseurs’ piece, the TO-ST1-T costs $246.88 and makes one slice at a time, no more. (For purists, yes, it is technically a “bread oven” rather than a pop-up. Close enough, in our opinion.)
In sum, “developed” high-income countries do make home toasters. But they are profitable at prices about ten times those you’d find in mainstream U.S. retail outlets. Looked at another way, the $300 or so you’d pay for a Dualit Classic, Milantoast, or Mitsubishi is at the midpoint of this week’s Neiman Marcus catalog, whose cheapest toaster option is a $90 polka-dotted Kate Spade, and priciest a $900 Dolce & Gabbana “Sicily is My Love,” both produced in China.
So to achieve Vance’s apparent goal, mainstream toaster prices would probably have to rise to Neiman Marcus levels, say $300 each. More generally, we assume he isn’t fixated on toasters specifically, but uses them as one specific example of a more general aspiration for appliance-type products. How would this hypothetical Trump/Vance-world look to families? To workers? And could their tariff ideas deliver it?
Family budgets: The Bureau of Labor Statistics’ most recent “Consumer Expenditure Survey” has family budget data for 2022. That year’s average (mean) U.S. household spent $73,000, including about $20,000 on goods purchases excluding restaurant meals. Small appliances cost them $142, and large appliances $408. That means $550 for appliances, 0.8% of the total budget and 2.5% of the goods-purchase budget.* If appliance prices generally rose to levels typical of the Dualits, Milantoasts, and Mitsubishis, family appliance bills would jump from $550 to about $5,000. That would mean a 25% increase in total U.S. household spending on goods. Few working families could afford that, of course. So home appliances would drop out of their present “easily affordable labor-saving device” range into a “scrimp-and-save luxury” tier. Families would still need some, though, and would presumably scale back their entertainment, education, health, auto repair, and other discretionary choices to buy an occasional vacuum cleaner, microwave, iron, washing machine, microwave, or toaster.
Employment: And what labor impact could we expect? Again by BLS’ estimates, 64,290 Americans, including 36,940 production workers, now work in home appliance manufacturing. The production workers’ average (mean) hourly earnings are $21.42. (The median wage is a nearly identical $21.23.) By comparison, average U.S. hourly production-worker earnings are $30.27 for the whole private sector, $27.96 for all manufacturing, $23.51 in electronics and appliance retail, and $18.91 in hardware retail. So pushing workers out of the toaster sections of appliance and hardware retailers into hypothetical toaster-making assembly lines would likely leave wages a bit better for some, a bit worse for others, and overall about the same.
Trade policy: Whether or not this is a good idea in principle, could the Trump/Vance tariff program — 10% or 20% tariffs on all goods, and 60% tariffs on Chinese-made products – actually do it? Pretty clearly not. The U.S. already charges a 5.3% tariff on pop-up toasters (HTS 85167200). None are made here. So as with a lot of U.S. tariff lines, the toaster tariff’s only effect is somewhat higher prices. To get the spectacular ten-fold price-hike that sustains super-toaster making in Japan, Italy, and the U.K., you’d need a 900% tariff or some equivalent policy. (Or, if you need only a five-fold price jump to make less impressive appliances profitable, 400%.) In fact, the additional Trump/Vance tariffs on metals, wiring, buttons, plastics, and other inputs would make U.S.-based toaster-making — including for currently successful producers like Holman Star — harder, not easier. The differentially higher tariff on Chinese-made popups might push some into Vietnam or the Philippines, or possibly Mexico, but that would be the end of it.
In sum, Vance-world looks very expensive for families, not obviously better for workers, and not realistic anyway.
* For some more specific cases, the BLS says single-parent families, with lower earnings, spent $438 out of $56,240 on appliances, about the same 0.8% share of the budget. BLS’ top-earner families average $322,000 in household income and put $1084 into appliance-shopping out of $167,088 in total spending (maybe getting the Kate Spade or something similar?) for a slightly smaller 0.6% of the family budget.
FURTHER READING
Special note: Research on U.K. and U.S. toaster-making for this Trade Fact by 2024 PPI Policy Fellow Julia Amann. Research on Japanese toaster-production by PPI Senior Fellow Yuka Hayashi.
And just to make it more complicated and more realistic –
The Trump-Vance tariff pitch is for “tariffs on everything”. This includes toasters, but as noted above, also on the things needed to make toasters: metal, wires, buttons, plastics, insulation, etc. Shoppers would pay the toaster-tariff, but companies like Star Holman (and by extension, any business and workers making appliances in the United States) would pay tariffs on the inputs. As their production costs rose, appliance-production in the United States would grow more difficult. From the small-government, free-market right, National Review’s Dominic Pino reports on American kitchen appliance-makers’ unhappy experience with Trump-era metals tariffs.
ABOUT ED
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
The U.K.’s Labour Party recently won an overwhelming victory in the country’s general parliamentary election. Its five-part policy platform contained a commitment to break down barriers to opportunity, including creating diverse education and training pathways so individuals can have an alternative to the college-degree pathway to jobs and opportunity. Democrats and Republicans in the U.S. have proposed similar measures at the national, state, and local levels. This approach is encouraging since it could hold the key to developing the types of pathways needed to ensure that young people and workers acquire the knowledge, skills, and social connections they need for upward mobility and prosperity. I call this “opportunity pluralism.”
Vice President Kamala Harris recently described America’s current pathways problem, and what a better approach could look like: “For far too long, our nation has encouraged only one path to success: a four-year college degree. Our nation needs to recognize the value of other paths, additional paths, such as apprenticeships and technical programs.” This issue can unite Democrats and Republicans, as recent proposals make clear.
While education governance in the U.S. is more decentralized than in the U.K., American policymakers should recognize the appeal of this approach and look to the U.K. example to inform how the U.S. pursues opportunity pluralism.
With six weeks until election day, the Harris-Walz campaign is in a final sprint to the polls attempting to win over every voter possible. Nowhere is this more clear than in the campaign’s efforts to win young voters. The Harris campaign announced that they would focus on reaching out to students across 150 campuses in the most important swing states. Other youth groups who have officially partnered with the Harris-Walz campaign have dedicated themselves to calling students across the country. All of these tremendous efforts to mobilize young students only begs one question: What about young voters who don’t go to college?
Many of today’s young leaders cut their teeth working within the party can be traced back to the March For Our Lives organization, a group that was founded to advance gun safety reforms in response to the Parkland shooting of 2018. Some March For Our Lives alumni demonstrate the newest generation of youth activist leaders such as: Representative Maxwell Frost (D-Fla.); David Hogg, president of Leaders We Deserve PAC; and Eve Levenson, the Harris Campaign youth director, all of whom learned their organizing strategy from March For Our Lives.
The reason this distinction matters is that activists who learned from March For Our Lives have shown a clear preference for organizing at either high schools or university campuses. This makes sense since their first action was the Walkout For Our Lives, inspiring students to walk out of class in response to the lack of any action taken to prevent school shootings. When it comes to Get Out The Vote, efforts during an election are the rational path to take. College voters are much more likely to vote Democratic than any other group within the 18-29 demographic. According to a recent poll conducted by Blueprint in May, 50% of college students consider themselves to be liberal as opposed to 36% who consider themselves to be conservative and only 14% who consider themselves to be moderate. Groups like Voters of Tomorrow and NextGen America are taking the lead on mobilizing these voters with days dedicated to calling students or tabling on campuses.
Yet, this strategy leaves wide gaps in the 18-29 demographic. With only 25.8% of the 18-29 demographic actually enrolled in higher education in 2022, there is a massive amount of young Americans who are simply being ignored by these groups. Approximately 39 million, in fact. If we take the focus off of what most people assume young voters are, far-left and attending a 4-year university, the young voter begins to look like most other voter demographics. For all voters aged 18-29, 36% describe themselves as liberal, a drastic 14-point decrease from college voters, and 31% describe themselves as moderates, another drastic 16% change. A recent poll from NBC highlights that their priorities are much the same as any other voter. By far the largest issue among Gen Z and Millennial voters is inflation and the cost of living, with 31% saying that this is their top issue. No other issue comes close to this level of importance with protecting democracy coming in second with 11% and abortion following close behind with 9%.
There are groups that have broken through the youth vote without focusing primarily on voters on college campuses. Groups like the Center for New Liberalism (CNL) and activists like Olivia Juliana have taken the lead on advocating for policies that appeal to the much broader youth vote. These activists understand that pragmatic policies that address the cost of living for young voters will be key to securing their support for the 2024 Presidential election. The Harris-Walz campaign also realizes this and has been promoting policies that will actually help all young Americans. Chief among them is Harris’ new policy proposal to build 3 million new houses, which will help drive down prices and allow more young Americans to enter the housing market. The rising cost of rent and homeownership is one of the most burdensome costs for young people, and Harris’ new efforts to address it are providing much-needed homes to the 64% of young voters who currently believe that owning their own home will be much more difficult than it was for their parents.
Simple math also explains why the Harris-Walz campaign needs to broaden its outreach to different kinds of young voters. John Della Volpe, the Harvard Institute of Politics Polling Director, has argued that the winning number for a Democratic Presidential candidate is 60% of the youth vote. Yet, the most recent poll of the 18-29 demographic conducted by NBC News has only 50% of young voters choosing Vice President Harris, and only 34% support Donald Trump.
The Harris-Walz campaign and associated youth advocacy groups have done an incredible job tapping into young, progressive, college voters. But if the campaign wants to reach the critical 60% of the youth vote, they will need to step outside their comfort zone and talk to the tens of millions of Gen Z and Millennial voters who are primarily focused on their economic well-being and their future.
Ben Ritz, Vice President of Policy Development at the Progressive Policy Institute (PPI), joins Facing the Future. Ben co-authored a PPI plan released in July called “Paying for Progress: A Pragmatic Blueprint to Cut Costs, Boost Growth & Expand American Opportunity.” The plan would balance the budget over 20 years using a mix of spending cuts, revenue increases, and economic growth. It was part of the Peter G. Peterson Foundation’s Solutions Initiative 2024: Charting a Brighter Future, a series of proposals from seven think tanks to set the debt on a sustainable trajectory. Concord Coalition Chief Economist Steve Robinson joined the conversation.
Ritz described the plan as a “vision for long term fiscal policy. It wasn’t just a deficit reduction exercise to us. We wanted to outline what our ideal fiscal policy looks like. We wanted it to be aspirational, but also economically pragmatic.”
According to Ritz, the 20-year balanced budget goal was chosen for two reasons. “The first is that we know there are going to be a lot of unforeseen challenges. Those challenges are going to have costs associated with them. There are going to be emergencies in the future for which we need to borrow, and so we don’t see balancing the budget as a necessary end, but we believe that putting the budget on a long term path to balance will create fiscal space for that future borrowing to not be problematic. The second reason is that this was an aspirational plan. It’s not politically realistic that our plan is going to be enacted in its entirety anytime soon and so, we wanted to overshoot that goal so that even adopting half of our recommended savings would be enough to stabilize the debt.”
Ritz described the policy choices in the plan as designed to favor investment over consumption and to fully fund the level of investment. “We prioritize public investments that will grow the economy,” he explained, and noted that any necessary tax increases should be done “in the least harmful way.”
“We know that anytime you tax something, you get less of it,” he said. “So we started by raising taxes on things that we actually want less of, like carbon pollution. Raising taxes on emissions would make us have a cleaner economy, be good for growth in the long run, and help reduce the deficit. Beyond that, we prioritize taxing consumption over taxing work and also trying to tax what we call unearned income that you get without having to do any hard work or productive investment to generate it.”
Ritz described a number of proposed changes to both Social Security and Medicare that are designed to lower costs while preserving, or enhancing the programs’ core functions. One innovative change would be in the Social Security benefit calculation.
As Ritz explained, “Right now, Social Security benefits are based on an average of your lifetime earnings and they replace a proportion of those earnings. That proportion declines as your income goes up, and so a higher income person is getting a bigger benefit than somebody who has had a lifetime lower income. A lower percentage of their income is getting replaced, but it’s still the case that we’re giving higher benefits to higher income people. So we propose to change the benefit calculation to be based, not on your lifetime earnings, but how many years you work. Hard work will get rewarded with the same Social Security, regardless of income. That keeps Social Security as an earned benefit, but it makes it more progressive, and it helps us reduce old age poverty, while at the same time making it more affordable for the next generation.”
“If we’re going to give one message to policymakers, it is that we raise the revenue for the government spending that we support,” he said, relating that message to the upcoming debate in 2025 over how to handle expiring provisions of the 2017 Tax Cut and Jobs Act (TCJA).
“The original TCJA was not paid for,” Ritz observed. “It added to the deficit, which was already too big. We had a tax code that was not enough to pay for the promises our government was making, and then we raised even less revenue. And so our message to Congress with this plan is, not only do we think you need to not add to the deficit with any TCJA extension, we actually think you should be doing deficit reduction so that we can afford to pay for these investments.”
In this episode of The Abundance Podcast, Richard Kahlenberg chats about the persistence of economic segregation, the connection between housing and education, and what the federal government in particular could do about it.
The jobs-to-be-done theory has implications for K-12 career education.
A successful move from one job to another is not only about organizations hiring individuals to do something for those organizations. It’s also about individuals hiring organizations to do something for themselves. This makes job moves a mutual engagement between the demands of job needers and the supply of job seekers.
This approach to jobs is an application of the jobs-to-be-done theory, described by Clayton Christensen and his colleagues in a 2016 Harvard Business Reviewarticle. They write, “People buy products and services to get jobs done, where ‘job’ is shorthand for what an individual really seeks to accomplish in a given circumstance. Jobs are never simply about function—they have powerful social and emotional dimensions.”
Ethan Bernstein, Michael Horn, and Bob Moesta in their forthcoming bookJob Moves: 9 Steps for Making Progress in Your Career, make this theory central to their approach to career development. For well over a decade, they’ve analyzed the activities of thousands of job switchers to distill 9 steps that help job seekers make their next job move.
