Rethinking the American Social Contract: The International Labor Organization's Decent Work Agenda in the United States

The ILO-Washington Office and the New America Foundation hosted a lively event about the ILO’s Decent Work Agenda in the United States. The event launched a new paper titled "Rethinking the American Social Contract: The International Labor Organization's Decent Work Agenda in the United States" featuring a distinguished panel of discussants. They included the paper’s author Lauren Damme, Senior Policy Analyst at the New America Foundation, Duncan Campbell, Director for Policy Planning in Employment, ILO; and Thomas Kochan, George Maverick Bunker Professor of Management, MIT Sloan School of Management. The session was moderated by Michael Lind, Policy Director, Economic Growth Program and Next Social Contract Initiative at New America Foundation.

Damme’s innovative framework for analyzing the state of the American social contract presents a series of indicators based on ILO’s Decent Work Agenda. This paper is part of New America’s Next Social Contract Initiative, which traces the evolution of the American social contract and proposes policies for its renewal. The social contract is a system of economic and social arrangements that support Americans, which must evolve to support workers in a changing labor market.

The panelists stimulated a conversation on how U.S. labor and social policies (or a lack thereof) has undermined a strong middle class and job creation. “When the Great Recession happened I told my colleagues not to worry, that American economic recovery would be quick as usual. I was wrong,” stated Campbell. While there are no easy solutions to overcoming sticky unemployment and ensuring basic social protections for Americans, the panelists all agreed with Kochan: “We need to put work back on the top of the national agenda rather than a footnote in economic policymaking.” Concerted, continuous focus on the American jobless, and bringing all stakeholders to the table, is imperative for the cohesion and economic recovery of the United States.

As the paper points out, the American social contract has embodied American reverence for hard work while discouraging social assistance. While this construct encourages work, it also obscures the important role American workers play in helping each other, with government acting as the facilitator through policy and regulation. The insecurity resulting from the lack of social protections has traditionally been offset by high employment levels, a stable middle class and widespread perceived opportunity for upward mobility. However, the value of this trade-off has been undermined by several trends.

While the dramatic job losses from the Great Recession quickly eroded the incomes of millions of Americans, Damme illustrates that the current economic insecurity in the U.S. has structural roots. As she writes, “These structural problems – weak social safety nets, inadequate retirement security, a tax system that disproportionately benefits the wealthy, an education system that is failing to adequately prepare our workforce, and incomes below a living wage – have literally undermined the American Dream: opportunity and the promise of a better future.” In fact, these structural problems date back to the 1970s, when wage growth for all but the highest earners began to stagnate despite continued productivity gains. Even as income gains accrued to the wealthiest Americans, employers began to step back from responsibility for retirement security and healthcare. Moreover, the American labor market is polarizing into low and high-income jobs, with a decline of middle-income jobs, as well as the retirement and health benefits that accompany them.

As an internationally recognized framework established through tripartite, international consensus, the ILO Decent Work Agenda can provide important guidance to these social, economic, and workplace issues in the U.S.