Abstract
The capitalist democracies of western Europe and the U.S. have developed extensive social
programs, based on the principle of solidarity, that provide assistance to the destitute, the
unemployed, the sick, the disabled, and the elderly. Due in part to growing levels of spending
on these solidarity programs that may threaten financial solvency in some of these countries
and in part to a growing belief that social programs should help people work and
achieve self-sufficiency, these countries have implemented “work activation” policies that
try to encourage, entice, and cajole physically-able people to work. Experience implementing
such work activation policies now suggests that policy can emphasize the relatively new
goal of work activation while still achieving the traditional social purpose of solidarity programs
by greatly reducing poverty. The aim of this paper is to review the experiences of the
U.S. and selected European nations in attempting to balance solidarity with work activation
by discussing both the components of an ideal work activation system and the problems
these systems often encounter. The problems examined include too few jobs, recessions,
low wages, and disconnected adults. The overarching purpose of the paper is to find a balance
between the goals of social solidarity and work activation.
Introduction
Capitalism has its flaws, not the least of which are inconsistency in providing jobs for
everyone who wants to work and indifference to people who cannot or are not expected
to work. A capitalist system based entirely on markets, profit, and freedom will leave
behind those who, for whatever reason, cannot find jobs or who cannot produce value in
the labor market.
A sparkling achievement of the European and American capitalist systems is that
they have, each in their own manner, figured out a host of ways to help these left behind
groups. The word “solidarity” may be a little hackneyed today, but the development of
social programs that brought a human face to the “malign effects” of capitalism, as Treasury
Secretary Henry Morgenthau put it at the Bretton Woods Conference, has been a
vitally important development in human history. The essence of the human face of solidarity
is the promise that, in addition to help from family and community, government
will help those left behind to achieve a decent living standard even though they cannot,
or in some cases choose not to, work. Solidarity is expressed in programs that provide
cash and in-kind benefits to the elderly, the disabled and sick, the unemployed, and the
destitute.
All the Western democracies have developed extensive and generous programs that
help these troubled groups. The programs vary from nation to nation, but taken as a
whole they are the most successful programs ever devised by national governments to
help the troubled. But alas, in the last two or three decades these programs have come
under threat by a perfect storm that includes international competition for jobs, technological
innovations and efficiency-oriented business practices that are making it difficult
for the unskilled to qualify for jobs, historic changes in family composition, and aging
of their populations leading to increased pressure on public pension systems and health
expenditures. This perfect storm not only increases the costs imposed on governments
by their solidarity programs but also constitutes a threat to the tax base by which solidarity
programs are maintained. These two factors, in turn, represent a direct threat to
the financial integrity of the government budgets of most or all of the Western democracies
– if not now, then soon.
One of the most important responses to the perfect storm goes by the name, in
Europe at least, of “work activation.” Although the details vary from country-tocountry,
the general idea of activation is that policy should encourage more people to
work by providing them with incentives, both positive and negative, to do so.
Thus, the social programs in all these countries serve the common broad purpose of
achieving solidarity with those who can’t work, those who can’t find jobs, and the destitute;
they all find ways to balance solidarity with self-sufficiency and work; and, most
important for my purposes here, they all seem to be evolving toward a greater emphasis
on personal effort, economic independence of individuals and families, and a higher
Balancing Work and Solidarity in the Western Democracies
share of their adults working. After reviewing the importance of work, the ways that
nonwork is possible and sometimes even encouraged by the Western democracies, and
the specific programs some of the Western Democracies have mounted to encourage
work, I describe what I deem to be the important elements of an ideal, work-based capitalist
system that balances solidarity with individual responsibility. I then turn to a discussion
of several problems that are evident in the work-based approaches that are now
such a notable feature of social policy in both the U.S. and the western European and
Scandinavian countries, concluding that research and international comparisons and
learning should play a key role in helping the Western democracies and other nations
address the perfect storm that now threatens.
A word is in order about my perspective. I worked with Republicans on the Ways
and Means Committee in the U.S. House of Representatives that wrote the initial and
most of the final draft of the 1996 welfare reform law. Since enactment of the 1996 reforms,
and especially since I left the House and assumed a position at the Brookings
Institution, I have studied and frequently written about the reforms and their effects.
The 1996 law is the primary example of work activation in U.S. national policy. The
law and associated legislation, as we will see, are a combination of tough provisions
designed to encourage benefit recipients to work and kinder and gentler policies that
could bring welfare recipients into the mainstream by helping them find a job, helping
them with child care, giving them generous wage supplements through the income tax
code, ensuring medical care for their children (and now, since enactment of recent
health legislation, for the mothers as well), and in general achieve what Europeans call
economic and perhaps even social inclusion. However, everything depends on work.
Unless former welfare recipients – as well as other low-skill workers who never joined
the welfare rolls – work close to full time, their families could be worse off than if they
had stayed on welfare. Moreover, there are many important issues about how the fifty
states are implementing welfare reform, the import of which is to raise questions about
basic issues of fairness and solidarity. In recent Congressional testimony, for example,
I raised critical questions about whether states were providing adequate levels of cash
support to destitute families that were having trouble finding work during the Great Recession.
The American work activation system is far from perfect and should be subjected
to the same careful scrutiny by Congress and the Administration as it has received
from researchers and policy analysts.
In short, although I have been a strong supporter of work activation policy in the
U.S., I have tried to recognize and analyze its inherent problems. I intend to deal forthrightly
with the problems as well as the achievements of U.S. activation policy in this
paper. After studying activation policy in the European nations, I have concluded that
both the U.S. and Europe face many of the same problems – and have a lot to learn from
each other. This paper, written primarily from an American perspective, is a small step
in that direction.
