Here are four specific suggestions on things to re-design in the American economy to better serve the middle class without becoming a welfare state:
- Make education more useful for future middle-class workers. Change how curricula is developed in every state to include active participation from the business community. Currently, this is largely the province of educators and administrators of schools. The curricula for K-12 needs to be as dynamic as the economic environment it exists within. Without the ultimate employer of talent in the planning process, curricula cannot adapt to change
- Make nurturing talent a national priority. States and the federal government need to create a tax incentive for companies to hire and formally mentor new talent. The quid pro quo for receiving incentives is this: companies must create a certification program that attests to the competence of those trainees. The certification should be broad in nature, focusing on the basic business skills every business needs. The skills also need to be updated every 2 to 3 years to include new technologies and everyday business analytical competence. The certification should be transportable across industries and accepted as a standard. Those that excel in the training process should earn more than those who do not.
- At the core of the middle-class safety net is having an affordable place to live. We need to redesign the suburban redevelopment process to make it easy to redevelop retail areas that we no longer need into residential or mixed-use spaces. While there are programs to rehabilitate the blighted urban core, there are no programs to revitalize the places most Californians want to live. We could greatly increase the availability of housing, and thus reduce its costs, if we tapped into the vast number of old malls and strip centers that are poorly utilized today. To do that, we need to provide a coordinated set of incentives to developers and change the way municipalities generate revenue so that it is no longer retail sales tax-driven.
- On the issue of giving workers a stake in the success of the companies they help succeed, I propose a decidedly capitalistic solution. Every company, publicly and privately-held must reserve a minimum of 15% of its shares for workers. Today’s templates of ESOPs (Employee Stock Ownership Plans) and ISO’s (Incentive Stock Options plans) can be adapted to provide all workers at least some participation in the upside (and in the risk of the downside) of their work.
The COVID-19 epidemic provides us with a perfect opportunity to re-think the system. Our leaders have an obligation to our society to start that discussion and to help nurture it. If not, we risk even greater shocks in the future.