The Blueprint for a More Democratic Economy
October 4, 2019
By Matt Hughes
Empowering workers means giving them representation in the workplace.
The Roosevelt Rundown is an email series featuring the Roosevelt Institute’s top stories of the week.
Giving Workers a Voice
To advance worker power and curb rising inequality, we must rewrite the rules of corporate governance. One key reform: giving workers representation on corporate boards. Roosevelt Senior Economist and Fellow Lenore Palladino makes the policy case for this big idea in a new working paper. Read more.
- Why this matters: Weeks after the Business Roundtable’s (BRT) “Statement on the Purpose of a Corporation” declared that corporations should work toward serving all stakeholders beyond shareholders, the trade group named Walmart President and CEO Doug McMillon as its next chairman. As Palladino and United for Respect leader (and 11-year Walmart associate) Cat Davis write for the blog, McMillon can start on his home turf. “Nobody on Walmart’s board has the experience or understanding that associates have of the day-to-day life in Walmart stores. Doug McMillon’s appointment to lead the BRT seems to say he thinks we’re stakeholders. It’s about time he treated us like that.”
- Moving forward: To rethink the American corporation, policymakers need bold solutions. In a Boston Review forum led by Palladino, 13 thinkers propose their ideas. “Restructuring corporations with employee ownership and governance rights would represent a sharp break from decades of neoliberal policymaking, but we cannot tweak our way out of the mess of deeply-rooted economic inequality,” Palladino writes in the forum’s opening essay. “These reforms may not be a silver bullet, but they would ensure the basic standard that employees do well when businesses do well.”
How Wage Boards Guarantee Representation
In the same Boston Review forum, Roosevelt Fellow Brishen Rogers offers a way forward for worker representation: wage boards. “Legal scholar Kate Andrias and others (myself included) have proposed that Congress establish ‘wage boards’ with the power to set minimum standards for workers within particular sectors,” Rogers writes. “As in the case of co-determination, this would guarantee representation, rather than just creating pathways for representation.”
- On the trail: Referencing a Roosevelt report by Rogers and Andrias, Sen. Elizabeth Warren’s new labor platform promises to “amend federal labor law to promote sectoral bargaining so that workers across industries—fast food workers at McDonald’s, Burger King, and Taco Bell, or child care workers across different employers—can band together and bargain alongside labor organizations to improve wages, hours, and working conditions on an industry-wide basis.” Tune in to the #UnionsForAll Presidential Summit today and tomorrow to hear working people tell presidential candidates what they’re looking for in a leader.
Why Capital Gains Tax Cuts Are So Regressive
The Tax Gap and the Pay Gap
Per the IRS’s latest measurements, the net tax gap—the difference between taxes owed and taxes collected—totals $381 billion. The tax gap, however, misses what corporations and the wealthy few should owe in today’s skewed economy. As Roosevelt Communications Director Kendra Bozarth writes for the blog, “If you’re worried about the tax gap, then you should also be worried about what’s lost to a lax, inequitable, and unjust tax code.”
- In other news: Under Sen. Bernie Sanders’s new Income Inequality Tax Plan proposal, “companies with large gaps between their CEO and median worker pay would see progressively higher corporate tax rates with the most unequal companies paying five percentage points more in corporate taxes.”
Rewriting the Rules for All
On the latest episode of Pitchfork Economics, Roosevelt Fellow Darrick Hamilton explains why government is necessary in building an inclusive economy. “Without government intervention, we end up with scenarios where power does what it does: It reinforces itself. Economic power is used to gain political power, and political power is used as a mechanism by which one can facilitate and structure a society so as to enrich themselves.” Listen here.
Welcoming Mehrsa Baradaran
Roosevelt is proud to announce that law professor, author, and game-changing thinker Mehrsa Baradaran will be joining our team of fellows. “From her books How the Other Half Banks and The Color of Money: Black Banks and the Racial Wealth Gap to her bold and informative online presence, it’s clear that Baradaran can help us push forward the Roosevelt Institute’s one-two punch worldview,” Roosevelt President and CEO Felicia Wong writes for the blog. Read more.