It Takes a Village (30 page)

Despite record profits for many companies, the gap in income between top executives and the average worker has widened dramatically. In 1974, the CEO of a large corporation typically made thirty-five times what an average factory worker earned. In 1993, CEOs made almost 150 times the average factory worker's wage—if he or she was lucky enough to have a job still. At the same time, as Stephen Roach, chief economist and director of global economic analysis for Morgan Stanley, notes in a recent report, “Between 1991 and 1995, nearly 2.5 million workers have fallen victim to corporate restructuring—a carnage without precedent for a U.S. economy in the midst of ongoing recovery.” American workers, he observes, have “been left with a profound sense of insecurity regarding job and earnings prospects.”

Changes in the economy, such as technological innovations and the globalization of commerce, have combined over the past two decades to produce what economists Robert H. Frank and Philip J. Cook call a “winner-take-all society.” The middle class, the backbone of our nation, is splitting, with more and more falling into the “anxious class” of honest, hardworking Americans who go in debt every time a child falls ill or the family car breaks down. Midlevel managers and white-collar workers are increasingly vulnerable to becoming what Secretary of Labor Robert Reich calls “frayed-collar workers in gold-plated times.” Hardly the stuff of which the American Dream is made.

This growing inequality of incomes has serious implications for our children. America's turbo-charged economy has produced cheaper and better goods and services and greater efficiency and competition, but it also has created serious social dislocations that undermine family and community values. As Alan Ehrenhalt, author of
The Lost City,
in which he examines the decline in community life since the 1950s, observes:

The decision by a profitable company to lay off workers in the name of corporate efficiency affects not only those workers but their children, families, and communities. So does its decision to impose a part-time workweek to avoid paying employee benefits. And who suffers most when a company decides to make do with fewer employees, forcing parents to work extra shifts at night or on weekends—times when child care is virtually nonexistent?

To be fair, while corporate restructuring is eliminating many jobs, the economy is also creating millions of new jobs, with small businesses starting at a record pace. In short, it is a great economy for successful entrepreneurs and for well-educated employees in strong companies that are worker- and family-friendly. Still, until recently, downsizing reduced the number of jobs that our rate of growth normally would have created, and fewer of the new jobs carry health care and pension benefits.

For those who live in urban areas with few businesses of any kind, the impact of changes in the private sector is most direct and devastating, with high rates of unemployment and crime, drug abuse, welfare dependency, and school failure. By now we know, however, that problems elsewhere eventually affect us all. Government has a big responsibility to help remedy them. But its resources are limited, partly because, in an effort to support growth, it takes less of people's incomes in taxes than does almost any other advanced economy.

Other developed countries, including some of our fiercest industrial competitors, are more committed to social stability than we have been, and they tailor their economic policies to maintain it. Although Japan's economy, for example, has grown sluggishly in the last four years and is currently experiencing its longest postwar slump, government and corporations there continue to support a system in which many workers enjoy much greater job security. To them, the trade-off is worth it.

In Germany, too, there is a general consensus that government and business should play a role in evening out inequities in the free market system and in increasing the ability of all citizens to succeed. Compared to Americans, Germans pay for higher base wages, a health care system that covers everyone but costs less than ours, and perhaps the world's finest system of providing young workers who do not go on to college with the skills they need to compete in the job market. As a result of such investments, German workers command higher wages than their American counterparts, and the distribution of income is not so skewed as ours is.

We have chosen a different path, leaving more of our resources in the hands of the private sector. We get much greater job growth and more new business starts than our competitors, but we also endure more of the harsh consequences of a more open economy. As a society, we have a choice to make. We can permit the marketplace largely to determine the values and well-being of the village, or we can continue, as we have in the past, to expect business to play a social as well as an economic role. That means we have to look realistically at what government must require business to do, principally in the areas of health, safety, competition, fair practices, and the environment; what government should attempt to persuade business to do through partnerships and other incentives; what consumers and workers have to do for themselves; and what business leaders should do, on their own, for their customers, employees, investors, and the larger community of which they are a part. The last two categories may be the most important. We desperately need, for the sake of our children, a national and global economy in which people act not only as consumers but as citizens, in which workers reassert responsibility for themselves and the success of their companies, and in which our businesses can do well
and
do good.

 

I
N THE PAST
, our government has taken steps on its own to improve the lives of working Americans and their families, by legislating and funding programs for families and children, some of which, like the Earned Income Tax Credit, I discuss in other chapters. Government has also mandated business to take certain actions, as with the Family and Medical Leave Act.

There are additional actions we can take, through our government, to preserve our country's promise of opportunity for all. We can raise the minimum wage, which is nearing a forty-year low; two out of five minimum-wage earners are the sole breadwinners in their households, and many recent studies show that a modest increase does not cost jobs. We can give middle-class families a tax deduction for the costs of their own or their children's post–high school education. Congress can pass a “GI Bill” that would give unemployed or underemployed workers vouchers they could use to cover the costs of up to two years of training at their local community colleges. We can increase access to affordable health care and reform insurance laws so that workers cannot be denied insurance when someone in their family has been sick or lose it when they change jobs. We can make it simpler and less costly for small businesses to provide retirement savings plans for their employees, by reducing the administrative burdens and costs of establishing and maintaining those plans.

We can also give business incentives to be better citizens, supporting competitive markets in the process. One example is the urban and rural empowerment zones created under my husband's administration to encourage private investment in distressed areas. The government can also improve its credibility by becoming more efficient and less burdensome on business, as illustrated by the elimination of sixteen thousand pages of unneeded federal regulations that Vice President Gore's Reinventing Government team has undertaken, and by the administration's partnerships with business.

Automobile manufacturers have entered into a partnership with the government to build a “clean car” that uses much less fuel. The Environmental Protection Agency's Project XL has elicited the agreement of companies in many different industries to meet higher environmental standards, in return for government's willingness to scrap the rules telling them how to meet those standards. A number of our most powerful telecommunications and computer companies have joined forces with the government in a project to connect every school in America to the Internet and to see that every classroom has adequate computers, good software, and well-trained teachers. Defense contractors have entered into partnerships to develop commercial products, in an effort to save jobs jeopardized by smaller post–cold war defense budgets.

Community-minded companies are already doing a number of things that citizens should applaud and government should encourage, when possible, with legislative changes to make them more attractive. Some companies tie workers' wages to business performance and to executives' compensation and follow a no-lay-off policy, which means that when business is down, both workers and managers take proportionate reductions in pay. Others offer employees stock options, health and pension benefits, ongoing education and training opportunities, and tuition bonuses or reimbursements for their children. Still others provide child care or at least permit parents to take time from work to become involved with their children's schools.

In 1989, television producer Norman Lear and former Johnson & Johnson CEO James Burke, along with a number of other prominent business leaders, professionals, and educators, launched a national nonprofit organization called the Business Enterprise Trust. The idea was to create a new spirit of enterprise among present and future business leaders that “combines sound management with social conscience.” Each year, the trust confers awards on business people and firms whose practices reflect courage, integrity, and social vision. Winners over the years have included individuals and companies that could be models for businesses of all sizes in every American community:

• Finast, a supermarket chain that built and renovated stores in inner-city Cleveland, is proof that business can operate profitably in depressed neighborhoods. The company not only improved its efficiency and profitability, but also spurred economic development in an area shunned by other businesses.
  
• Fel-Pro, an automotive product manufacturer based in Skokie, Illinois, purchased two hundred acres of land for employees' recreational use and created a summer day camp at the site, which serves hundreds of employees' children each year. Fel-Pro has initiated many other family-friendly policies, including a day care center near the plant, emergency home care for employees' sick dependents, tuition reimbursement for employees, and college scholarships, admissions counseling, and subsidized tutoring for their children.
  
• Howard Schultz, the CEO of Starbucks Coffee Company, has worked to give his employees a stake in the company's success. All Starbucks workers who work twenty hours a week or more receive health coverage and stock options. The company maintains that the rise in its insurance premiums was offset by a lower turnover rate and a corresponding decrease in training expenses for new workers.
  
• Rachel Hubka, who founded Rachel's Bus Company in inner-city Chicago in 1989, hired many people who had previously been considered unemployable. She instilled in them a strong sense of pride and entrepreneurial spirit, producing capable school bus drivers and a successful company.
  

Examples of enlightened business practices are far too numerous for me to mention more than a handful, but there are not yet enough.

Socially minded corporate philosophies are the avenue to future prosperity and social stability. Harvard Business School professors Rosabeth Moss Kanter and Michael Porter argue that the economic future belongs to businesses that invest in their workers and communities. In her book
World Class,
Kanter examines the relationship between globalization and the strengths of local communities. Porter believes that “Companies will understand the need to rebuild the corporation and create a sense of community again. The ones that do that will be the winners in the next stage of the competition.” I certainly hope so. It is going to take the contributions of our businesses to give America's children the future they deserve, both to make their living and to build a lasting village.

I
n the spring of 1995, Chelsea and I traveled together through South Asia. As the mother of a teenager, I felt very lucky indeed that my fifteen-year-old was willing to spend ten days with me. We toured Mother Teresa's orphanage in New Delhi and talked with young women who were studying business in Lahore, Pakistan. We saw a rural bank founded and run by poor women in Ahmadabad, India, and learned about the place where Mahatma Gandhi lived while starting the movement for Indian independence. We visited grassroots efforts in Jessore, Bangladesh, and in Colombo, Sri Lanka, that are bringing basic health care to pregnant women and their babies and expanding economic and political opportunities for women and the poor. Everywhere we went, we were impressed by the progress people were making, despite overwhelming poverty and internal political strife. In each country, we met democratically elected leaders who had endured terrible hardships—imprisonment, torture, exile, the assassinations of husbands, fathers, sons, mothers, daughters—under previous regimes.

We had an unforgettable time and were presented with frequent opportunities to reflect on what it means to be an American. Many of the people we met told us how much they admired our country. Some quoted leaders like Thomas Jefferson, Abraham Lincoln, and Franklin Delano Roosevelt; others expressed appreciation for the educations they had received in our universities, their partnerships with our corporations, and the many forms of assistance provided by our government, churches, and private foundations.

The comment I remember most, however, came from a young Peace Corps volunteer I met in Kathmandu, Nepal. To catch the bus that brought her to meet with me, she had walked ten hours from the remote village where she lived in a house without running water or electricity. She described the work she did at a school where nearly all the students were boys, since most girls were still denied schooling and were often married by the age of twelve or thirteen.

The volunteer loved her experience in Nepal but missed her family and all the blessings of daily life that she had taken for granted in America. She longed for safe drinking water that poured from faucets; meats and vegetables that she could eat without worrying they would make her sick; enough food to eat all year round; free public schools that taught both boys and girls; warm baths and electricity available around the clock; paved roads, and cars to drive on them.

Chelsea listened attentively, and I wished every American teenager could have been there with us. Americans enjoy so many blessings because generations before us paid the price to establish and maintain a stable, democratic government that protects our individual rights and provides public services that benefit us all. Most of our sons and daughters are lucky enough never to have known a time when millions of Americans didn't have electricity or good roads. Except for the occasional contamination scare, they have no reason to fear the water they drink or the food they eat. They were not alive to witness the origins of many improvements government brought to American life—improvements neither individuals nor the private sector could adequately address. They don't remember that many of the most important advances grew out of controversy and were achieved only after great effort.

Our children may not remember, but older African Americans who could not eat in restaurants or sleep in hotels or vote in elections surely do. Women who were not admitted into certain professions remember; so do those whose reflexes slowed before the federal government passed Title IX and opened up collegiate athletics to their daughters and younger sisters. Asian Americans who were told not even to apply for some jobs and Jewish Americans who were prohibited from buying homes in certain neighborhoods remember. Hispanic Americans who had no legal recourse against exploitative employers remember. Native Americans who lacked access to medical services before the expansion of the Indian Health Service remember.

Men who went off to fight in World War II and were welcomed home by a grateful nation and the GI Bill of Rights remember. They went to college, started businesses, bought homes, received medical care at veterans' hospitals, and built the biggest, most prosperous middle class in the history of the world. No American is alive today who reached retirement before the advent of Social Security, but millions of older citizens depend totally on those checks and remember what their lives were like before Medicare.

Our children may not have witnessed any of these changes, but every noontime, millions of them fill school cafeterias, eating for little or no money thanks to the school lunch program the federal government started in 1946 after the discovery of widespread nutritional deficiencies among World War II draftees. Children breathe cleaner air in cities like Los Angeles, Pittsburgh, and Detroit because of the Clean Air Act. They fish, boat, and swim in once-hazardous bodies of water like Lake Erie and the Cuyahoga River because of the Clean Water Act. One in four of them relies on Medicaid for health care.

When we're reminded of the bounty and protection we enjoy, most of us, like that Peace Corps volunteer, are grateful. Our gratitude has its roots in a view of government that dates back to the Pilgrims and to the successive waves of immigrants who came to this country seeking religious and political freedom and better economic opportunities. In this view, government is an instrument both to promote the common good and to protect individuals' rights to life, liberty, and the pursuit of happiness.

Americans' attitudes about how the instrument of government should be used to achieve these ends have evolved with the nation's circumstances. As we grew from a rural, agricultural society into a more urbanized, industrial one, citizens began to expect government to protect them from economic downturns beyond their control and from corporate unscrupulousness and greed. They expected government to do what it could to encourage economic growth and to create jobs, so that a middle-class standard of living could be within reach of anyone who was willing to work hard. During the 1960s, a majority of our citizens supported government action to guarantee civil rights to all Americans, regardless of race, sex, religion, or national origin; to improve educational opportunities throughout our nation; to take more aggressive action to alleviate the problems of poverty; and to assure senior citizens access to quality health care. In the 1970s, most Americans supported federal action to protect the environment and to assure greater safety in the workplace.

By the 1980s, however, faced with mounting economic and social problems, Americans began to question the ability of government to solve them. Many began to believe government itself was the problem. These feelings, along with the constraints imposed by our mounting national debt, slowed the pace of federal activism. Even those of us who are mindful of the progress we have made through government recognize that there are limits to what it can do. We reject the utopian view that government can or should protect people from the consequences of personal decisions or that it can legislate complete peace, harmony, and brotherhood.

This skepticism, too, has its roots in our history. In part, it has been handed down to us by the colonists who came to America partly to escape the British government's arbitrary and absolute authority. They gave us the Constitution's checks and balances and the Bill of Rights, both strong limits on government. But Americans' wariness about government is also the legacy of the early adventurers, traders, and entrepreneurs who saw America as a land of rich natural resources waiting to be exploited by the fittest and most deserving among them.

Taken to its extreme, this perspective exalts private initiative and regards those who exercise it as deserving to flourish virtually unencumbered by any mandate to share the wealth or apply it toward solving our common problems or creating common opportunities. The role of government, in this view, is limited to functions like national defense and law enforcement. Thus individuals, families, and communities must exercise their own initiative and develop their own resources to maximize both public and private good. Any but the most minimal regulations to protect the rights of individuals and private enterprise and the smallest possible social safety net are seen as burdening us with wasteful taxation and a bureaucracy that saps the resources and entrepreneurial spirit of the citizenry and undermines the values of work and family.

Variations on these competing visions of the role of government and the rights of individuals exist all along the political spectrum. Most of us hold a point of view that exists somewhere between the extremes, even if we do not consciously articulate it that way. We may grumble about paying taxes, but we generally support programs like veterans' benefits, Social Security, and Medicare, along with public education, environmental protection, and some sort of social safety net for the poor, especially children. We are wary of both government interference with private initiative or personal belief and the excessive influence of special interests on the political system. Most of us would describe ourselves as “middle of the road”—liberal in some areas, conservative in others, moderate in most, neither exclusively pro- nor anti-government. We respect the unique power of government to meet certain social needs and acknowledge the need to limit its powers.

In times of profound and overwhelming social change like the present, however, extreme views hold out the appeal of simplicity. By ignoring the complexity of the forces that shape our personal and collective circumstances, they offer us scapegoats. Yet they fail to provide a viable pathway from the cold war to the global village.

At present, the extreme anti-government position is the noisiest one—or at least the one that gets the most attention from the media. There are few voices arguing for more government. Instead, the public debate is primarily between those who argue for much less government, period, and those who advocate a smaller, less bureaucratic, but still active government to meet the demands of the Information Age. Anti-government rhetoric appears to offer a vision of greater efficiency, self-reliance, and personal freedom. (For obvious reasons, it also usually enjoys greater financial backing and better-organized support.) Unfortunately, this rhetoric ignores what has historically been most valuable about our skepticism toward government—the emphasis it places on personal responsibility from all citizens. Instead, it argues against the excesses of government but not against those of the marketplace, where there is great power to disrupt the lives of workers, families, and communities. It even argues against the basic protections government extends to the well-being of individuals, families, and communities, without offering an alternative way of safeguarding them. In fact, its extreme case against government, often including intense personal attacks on government officials and political leaders, is designed not just to restrain government but to advance narrow religious, political, and economic agendas.

We must ask ourselves: Who benefits from the elimination of federal regulations that protect us from outbreaks of contaminated drinking water or cases of tainted meat? Who benefits from a decrease in federal pollution standards, or from the kind of massive deregulation that could allow companies to dump toxins into our nation's oceans, rivers, and lakes? Certainly not our families or our children.

Despite the resurgence of anti-government extremism, it is becoming clear that most Americans do not favor a radical dismantling of government. Instead of rollback, they want real reform. And when a strong case can be made, they still favor government action, as they have demonstrated recently in their support for measures like the Family and Medical Leave Act, the Brady Bill, and the new Direct Student Loan program.

Moreover, our whole history proves that a debate of extremes does little to reform government or to help solve problems that people confront in their daily lives. The clearest example of this is in the public debate over the assistance government should—or should not—provide to children and families. In a 1991 pastoral letter, “Putting Children and Families First,” the United States Catholic Conference cautioned: “There has been an unfortunate, unnecessary, and unreal polarization in discussions of the best way to help families.” That polarization has garnered more sound bites than progress, presenting an incomplete and occasionally inaccurate picture of how families and children are affected by government actions. We've had more press coverage, for instance, about welfare benefits that affect nine million American children than about the dramatic expansion of the Earned Income Tax Credit, which is decreasing the taxes of lower-income working parents so that they and the more than twenty-five million children they are raising do not have to live in poverty.

This is but one example of the bottom-line truth about responsibility for the well-being of families and children: it is not an exclusively pro- or anti-government proposition. As the Catholic Conference noted: