A Solution

By Edward H. Baker  |  Posted 03-06-2006 Print Email

Have you seen anybody actually work this out?

No, but I have written about this recently, and I'm going to work at it now. It's not just a matter of giving people money for two years to supplement their incomes while they're bagging groceries and stocking shelves at the local Wal-Mart. That's not enough. There are insurance plans now which we are experimenting with—not unemployment, but wage insurance.

So if you go from a $70,000 job to, say, a $20,000 one at Wal-Mart, half of your wages are picked up for three years under an insurance program. A pilot insurance program like this was enacted in the U.S. several years ago.

So we're working at it, but we have to work out these trajectories of transition. And for unskilled workers, because they also lose jobs, we now have to do what the old socialists who were for workers' education used to do. We now have to improve the unskilled workers' portfolio of assets through training. I think workers have to be educated. It's the unions that should do that, because that will really protect workers against flux.

And companies have some corporate social responsibility as well. Individual firms may not be able to do that, but I think employers' associations, chambers of commerce and the like can. They are obviously interested in international trade. Many of our firms are international now, and if we don't do something to facilitate coping with change, the politicians won't be able to deliver on keeping markets open, and then you can forget about expanding further.

If you really believe globalization is a source of gain, which I do, and social advancement as well, which I write about in my book, then I think these problems have to be solved. We have to look at the issues of an aging society and the lack of skilled jobs. I don't think the middle class is under that kind of threat, but we do want to be able to move from job to job. Our entire social and economic setup is attuned to conditions of stability, where you start in a firm and you expect to die in it.

I remember as an undergraduate, the first question that kids asked prospective employers was, "What's your pension plan?" They expected to retire in the bloody place! Today nobody expects it—and nobody wants it either, if they're educated. I mean the last thing you want is to be at one firm forever.

I think we really need a sea change, and that's what I've been lecturing about quite a bit in Germany and Denmark. I think everywhere the talk is about how to cope with the changes wrought by globalization, and what is the best way to reorganize our social-support system to meet those new needs. But if we don't do that, we're in trouble, and I think we'll fall behind. People have the vote, thank God, and they can actually vote you out if you don't do something about it.

Are you optimistic or pessimistic?

I think America is resilient. I was really pleased the other day when Hillary Clinton's chief of staff wanted me to come and talk with her about international trade. I told her, "You're the first Democratic politician who has ever wanted to talk about it." Increasingly, people are beginning to see that they have to talk about this, and that simply rolling along is not going to be very helpful.

If the fears are real, that's different, but if the fears are simply based on faulty analysis and lack of appropriate responses to globalization, then it's an unnecessary contradiction we're imposing on ourselves.

I think we need to rethink a whole lot of things—trade, aid, how we want to operate in the world. I think we can do it because we're very pragmatic and solution-oriented. And I think the U.S. will do it ahead of anybody else.


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