DEMOCRACY, ECONOMY AND EUROPE

A New Progressive Era

BERLIN — 3 July 2017

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31st May 2016

You can now cast your vote for your favourite of our top five ‘killer ideas’ for progressives:

 

Helping working-class parents have middle-class kids

Richard Angell – Director of Progress, the UK Labour party’s centrist pressure group

The point of social democratic parties is to help working class parents bring up middle class kids and to help people with middle class incomes to have middle class savings. Social mobility and security are the new challenges to align.

 

Politics is not a full-time job. And everyone is invited

Karolina Leakovic – International secretary of the Croatian Social Democratic party and a former member of parliament

A rapid technological, economic and societal change makes our environment more complex on daily basis and often hard for decision-makers to understand. While on one hand, people tend to distrust political parties and avoid voting and elections, many informal, self-organised movements and initiatives – on the other hand – seem to attract younger, more progressive and future-oriented people. Conclusion might be: we are interested in politics, in ideas and in improving our societies. We are fed up with politicians. The ritual of replacing ones with others every four years does not sound appealing anymore. Do we really need those? Can’t we simply use technology to involve as many people as possible in decision-making – as often as possible?

Is there a progressive answer to the crisis of political representation? Can we all be politicians? And aren’t we?

 

Shifting the political discourse to socioeconomic topics

Timo Lochocki – Transatlantic fellow at the German Marshall Fund of the United States, Germany

Centre-left parties do not only struggle because centre-right and far-right parties have an easier time winning voters with conservative and even anti-immigration rhetoric. Centre-left parties must not only address their strategic limitations during salient migration debates, but especially how to draw attention to political issues voters ascribe issue competence to them: Social Justice and Economics. How this can be done is still an open question and calls for a strategic reflection upon the mechanisms that lead the political discourse to turn away from socio-economic topics to cultural matters; finally, on how centre-left parties can strengthen the salience of economic matters – their bread and butter topics.

 

Time for a tax switch

Josie Pagiani – Progressive political commentator in New Zealand

This killer idea for progressives is rooted in an idea that will surprise no-one; that progressive movements exist to further the interests of everyday working people.

After Thomas Piketty, we know that working people earn a declining share of national wealth in the absence of intervention, whether the economy is growing well or not.

Therefore, the killer idea for progressives is to identify *the share of wealth going to everyday working people* as the central narrative explaining our mission, our opponents’ failings and our offer. Where our opponents blame immigrants, globalisation or foreigners, welfare cheating, bureaucrats or the state for whatever shortcomings they identify in society, we say the issue is that working people, even skilled workers, have to run harder just to stay on the treadmill. Unless you think we’ve peaked and made enough wealth, we need to back the next generation of wealth creators.

So our solution should be a tax switch from income to capital (‘from earners to owners’, ‘from when you are working your way up the hill, to when you have got there’). Cut income tax, increase tax on capital. I would complement this with schemes to help working people to earn a proportionate share of capital – e.g. through workplace savings schemes, home ownership, and some public investment. But the killer idea is the tax switch from earring to owning, moving progressively more of the tax share from income tax to capital tax.

 

Public building where all generations can meet

Sarah Vaaben – Researcher at Policy Network from Denmark

Family and household structures have changed significantly over the past 50 years in western Europe and this is expected to continue. Life expectancy has increased across Europe with a growth in single households, particularly those owned/lived in by older people. At the same time, family structures are becoming more complex with a decline in marriage and an increase in the number of single-parent families in most western countries. This generates a need for creating spaces for peoples to meet across generations outside their homes.

Publicly funded building projects should account for these changes by making sure there is space for generations to meet. This could be made possible by launching national public building schemes where new projects include multi-functional rooms and spaces that would facilitate activities for people other than the primary user group. When building schools, homes for elderly, sports facilities, concert halls etc. the buildings should offer recreational areas and restaurants/cafeterias that can be used by people of all ages. Playgrounds could be placed near old people’s homes and schools could share cafeteria facilities with other institutions. There are endless opportunities and if included in an overall strategy for public building it may not even be costly.

 

Vote for your favorite 'killer idea' for progressives:


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27th May 2016

Speaker: Alison McGovern, UK Labour member of parliament

Chair: Anna Ascani, Italian Democratic party member of parliament

Class and globalisation

The issue of class is linked to globalisation, which is linked to the issue of making education accessible.

Across Europe the distinctions between classes have been changing dramatically. In the UK today people don’t identify with the old class structures. The financial crisis has impacted many people negatively and as a result there are struggling to maintain their standard of living.

Globalisation opens up new possibilities for some peoples while others are struggling to maintain their jobs and standards of living.

Different grievances when it comes to the issue of class

Some are legitimate others are not. There have even been expressed concerns that women entering the workforce are limiting the opportunities of men.

The most important issue is that of ensuring equal opportunities for disadvantaged groups of people when it comes to accessing education.

Disproportionate increases in wages in the past seven years have not been equally spread out across different groups. Some people are left behind, as they do not have the skills required to find new jobs.

Geographical clusters

Industrial cities have performed better in making a transition and ensuring economic growth. Opportunities have been provided for people to opt into other professions also by ensuring education/retraining courses. However, rural areas are struggling to ensure economic growth and create new jobs. This is also due to the ‘urban march’.

The rural areas can be characterised as having low-skilled and low-paid jobs as well as high-skilled and low-paid jobs. These areas have seen no progress in the period following the financial crisis. Social Democrats/Labour have left these people behind. In some respects the Social Democrats are disassociated from ordinary people.

Class structures and the issue of an anti-educational culture

Difficult to prove any link between educational achievements and a so-called anti-educational culture. Have not come across any specific examples. A more plausible explanation is that social factors impact on educational achievements.

Policies that makes a difference

In the UK there have been contracts set up between parents and professionals emphasising early years educational schemes – and these schemes are now covering children as young as two years old. The focus has been to support the disadvantaged families and these initiatives seem to be effective.

Three solutions to grievances:

  • Stand up for progressive politics: everyone deserves to be included and given equal opportunities, including women.
  • The issue of geographical clusters characterised by high levels of poverty and unemployment:
  • People in these areas are often socially isolated as well as struggling with unemployment and poverty
  • EU’s structural funds and development projects have actually had an impact. Areas that were excluded from progress are now experiencing positive developments. The focus needs to be on place-based schemes that support local improvements.
  • Productivity crisis in the UK/EU: employers also need to make investments into adult education. Second chances of education are often perceived as an add-on. However, these schemes are necessary to improve productivity. Currently a levy on companies to take on apprenticeships has been introduced (especially young people). Interesting to see the results. Businesses and employers have to be in the lead.

The issue of class and education is a macro-economic issue and not a question for the individuals to deal with themselves.

Digital apps could be useful in providing people with the knowledge of opportunities for further education.

Rapporteur: Sarah Vaaben


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27th May 2016

Speaker: Margherita Bussi, researcher, University of Brighton, and European Trade Union Institute

Chair: Michael Miebach, deputy chair and co-founder, Das Progressive Zentrum

Why should progressives talk about vocational training?

Young people are hard-hit by crisis, which is particularly bad as they are hit in formative period in life. Hence inequality is looming.

Design of policy tools is important. Many people are talking about youth unemployment. The German model of vocational training is part of the ‘miracle’ leading to low youth unemployment. Can it be exported?

The peculiarity of the German model is threefold:

  • Long and strong institutionalisation. Stakeholders are heavily involved. Power is relatively balanced. But that social partner model is difficult to export.
  • Cost is shared by employers and government: different practice in other countries.
  • Structure of labour market and cultural norms: status and prestige of vocational training often is rather low in other countries. So associating vocational training with labour market performance is key. Continuum between general and vocational educational is also important.

Comments and conclusions:

  1. You cannot export the full package but each country should integrate lessons into its own dynamics. The example of Brussels was given: people from low socioeconomic and migrant backgrounds are pushed towards vocational, but local labour market is high-end.
  1. German system has its problems too: shortage of candidates and at the same time risk groups not qualifying. Refugees are obvious candidates but uncertainty of stay is an issue.
  1. Vocational training could be an important instrument to increase the employment of refugees. Sweden is experimenting with compulsory track for migrants. It has its own version of apprenticeship system in the context of shift of the power balance towards employers.
  1. Is vocational training responsible for the German labour market success or is it rather precariousness introduced by other policies? Vocational training is part of a continuous move to ever higher value added. But a lot of extra employment is in precarious jobs. Precariousness is also not seen as a problem within the framework of ‘youth guarantee’. So it boils down to a preference for employment over guaranteed income.
  1. How much say do employers have in the design of vocational training programmes? There is a risk of lock-in in very specialised and particular skills.
  1. There is anecdotal evidence of social mobility by vocational training and active labour market policies but statistical evidence unsure.

 

Rapporteur: Jan Cornille


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27th May 2016

Speaker: Torsten Bell, director, Resolution Foundation

Chair: Lucy Powell, UK Labour member of parliament and shadow secretary of state for education

Widespread ‘robot angst’ – how much should we worry?

Future fear: Frey & Osborne: Likelihood of jobs being automated (not just low-skilled jobs)

What has happened in the past? Jobs have gone in the middle and been created on top and bottom (increasing inequality). More lousy jobs and more lovely jobs but less middle jobs. This changes over time. What kind of jobs machines can do changes over time.

Strong relationship between prediction and actual trends.

Don’t panic (yet). Here’s why:

  • OECD estimates are much lower than Osborne & Frey
  • BCG thinks that only 10 per cent of cars will be driverless in 10 years. New tech has long lead time
  • Mostly machines don’t replace jobs they change jobs
  • Employment is not falling – indicating new jobs are still being created in higher numbers than jobs go away (net growth)

Is the labour market being polarised? No, not true, at least in the UK. Wages are not being polarised. Most of the earnings inequality increase happened in the 1980s. Hasn’t really come back. Also wage growth has stopped expect for at the very top (but this is not driven by technology).

Mid-skill jobs are mainly being replaced by high-skilled jobs. Meaning people just have more education and better jobs

Occupational structure change is complex, eg less secretaries and manufacturers, more customer service and health workers/ personal care. Also more business and service professionals but at lower wages. The old top is the new middle. See presentation.

But don’t be complacent either:

  • Automation is real and is driving job transformation over time (technological unemployment). Strong argument for lifelong learning and other public policies
  • Pain is not equally distributed – calls for distribution policies

In fact the problem is probably not enough robots, not to many

Questions/ discussion

  • Technology is not just changing jobs but whole value chains and industries and work processes.
  • Will return to capital increase more than return to labor and as a consequence increase inequalities? So far earnings inequality explain a larger share of inequality but this will change. Then we probably need to tax robots or nationalise robots
  • More precarious work? Gig economy is quite small but not clear that labor laws now are designed to deal with this
  • Can we use robots more actively? Can they solve some of our problems? Digital health and care? Shared technology platforms to foster ne business growth? Can technology in schools help with literacy training and other social challenges?
  • Our historical role was to deal with technological change. Have we forgotten this and how can we increase resilience?
  • Progressives should offer policies to say what are the opportunities? How can we use technology for the common good? And what are the risks and subsequent policy needs?
  • If wage growth and productivity is stagnant firms have less incentives to invest in technology
  • Automatization requires skills investments
  • The digital economy is difficult to measure – maybe productivity growth is actually slowing because improvements do not show up in the numbers. How big is this chunk? Hard to tell but seems unlikely that slowing productivity growth is all about measurement problems.
  • Are we using the technology right? Or just making improvements in social life but not putting technology to good use in the economy?

Rapporteur: Sigrun Aasland