“Never waste a good crisis.” In the last decades of the 20th century, crises were typically an opportunity for structural adjustment that unwound inefficient state-based intervention into markets. The COVID-19 crisis reverses this trend. We have shut down the economy by choice,1 revealing deeper values. Bipartisan support for cash stimulus payments has thrown into relief the unsuitability of 20th century welfare logic for the volatile 21st century economy. Concerns that people are not seeking testing and treatment for COVID-19 because of economic disincentives have renewed enthusiasm for a shift in US healthcare policy. A focus on “life essentials” has revealed our collective dependence on frontline workers in health care and food supply chains who are, paradoxically, relatively low paid. The pandemic has underlined the importance of cooperation, reciprocity, and prosociality to prosperity. “Flattening the curve” is a collective action problem. If we all do the right thing, fewer people die and the economy restarts quicker. But if just a few people defect from the social agreement, the virus spreads rapidly. Unfortunately, America has lost much of the social capital, community, and sense of collective identity that make such large-scale cooperation possible. The intensely capitalist and individualist, markets-only socio-economic model of the late 20th century seems spent. All this points to the COVID crisis as an opportunity to imagine a new social contract for America that promotes cooperation and ensures citizens can flourish in the fast and unpredictable 21st century.
Former Brookings expert
Research Associate - Bennett Institute for Public Policy, University of Cambridge
Where should we look for the foundations of this new social contract? The COVID-19 crisis is an exclamation point in a longer running trend of social, political, and economic unravelling that points to an overdue conversation about well-being. Philosophers interpret well-being as the prudential good: what is “good for” an individual or what makes their life “go well.” Do America’s culture, institutions, policies, and practices promote the well-being of its citizens?
While American firms and cultural outputs still dominate global society, things don’t seem to be going well for many in America today. The middle class in particular, whose prosperity was once the backbone of the US economy and key to its overseas appeal, seems to have had an unusually hard time of it lately. Wage growth is tepid,2 unemployment in many counties remains depressed 3 a decade after the global financial crisis, and suicides rates are soaring.4 What has gone wrong for the American middle class?
The most straightforward answer is unemployment. But while restoring income and the dignity of work are crucial to the well-being of the American middle class, securing its future requires more than just jobs. The blue-collar jobs that have gone overseas in recent years were one pillar of a socio-economic system, and the other pillars are gone too.
Many factory jobs were in mid-sized regional or satellite towns. These are now hollowed out, and all signs indicate that the future is in metropolises. The factory work schedule organized the week. You worked from 9–5 and could reliably take breakfast and dinner with your family and lunch with your colleagues. These social interactions were valuable social glue. Many jobs in the new economy now require flexible work schedules, weekend hours, and teleworking. Work now often disorganises the week and undermines quality time with family and peers. How easily can a father commit to taking his daughter to softball every Tuesday when he only gets shifts on Sunday night? American religiosity is in freefall, and alternate community institutions for fostering cooperation and neighbourliness have not emerged. Traditional gender roles were another important pillar of the 20th century middle class that has been upended. Women have little desire to return to a socio-economic system that limited their freedom. The feminist transformation of the marriage market (Kearney and Wilson 2018) means that young people receive few clear messages of what makes you a valuable member of society. In combination with rising educational requirements for securing a good job, this has extended the time people take to mature into adulthood.5 All this suggests that a simple jobs boom is not enough for the American middle class to flourish once more. A sociocultural restructuring is required.
Appropriately, The Future of the Middle Class Initiative at the Brookings Institution has gone well beyond jobs and identified 5 pillars to guide its thinking about how to secure a good life for the average American. These are income, health, relationships, respect, and time. This paper explores contributions the academic literature on well-being can make to these pillars. It draws especially on the literatures associated with psychological well-being. Rather than focusing on material indicators of well-being like wealth and physical health, this literature focuses on people’s mental health and how they report feeling about their lives (Ryff 1989, Stone and Mackie 2013). Perhaps the most prominent branch of this literature is analysis of life satisfaction and self-reported mood—so called “subjective well-being.” Other prominent themes include optimism, basic psychological needs for autonomy, competence, and relatedness to others, and purpose in life (Marsh et al. 2020). The well-being literature has burgeoned and matured in recent years and is now settled enough to provide insights into policy (Frijters et al. 2020). These are often powerful.6 However, academic debates about the normative suitability of psychological well-being to policy applications are simmering and measurement issues still haunt the field (Benjamin et al. 2020, Alexandrova and Singh 2020). To compensate, this paper focuses on the least controversial areas.
Mark Fabian, Research Associate at the Bennett Institute for Public Policy at the University of Cambridge, did not receive financial support from any firm or person for this article or from any firm or person with a financial or political interest in this article. He is not currently an officer, director, or board member of any organization with a financial or political interest in this article.
- Maloney, W. and Taskin, T. (2020). Voluntary vs mandated social distancing and economic activity during COVID-19. VOX. Retrieved from https://voxeu.org/article/covid-social-distancing-driven-mostly-voluntary-demobilisation
- Reeves, R.; Pulliam, C. and Shobert, A. (2019). Are wages rising, falling, or stagnating? Brookings Institution. Retrieved from https://www.brookings.edu/blog/up-front/2019/09/10/are-wages-rising-falling-or-stagnating/
- Liu, P.; Nunn, R.; Parsons, J. and Shambaugh, J. (2019). Has job growth reached America’s struggling places? Brookings Institution. Retrieved from https://www.brookings.edu/blog/up-front/2019/03/07/has-job-growth-reached-americas-struggling-places/
- The Economist. (2020). America’s suicide rate has increased for 13 years in a row. Retrieved from https://www.economist.com/graphic-detail/2020/01/30/americas-suicide-rate-has-increased-for-13-years-in-a-row
- National Review. (2011). Dude, Be a Man! Retrieved from https://www.nationalreview.com/2011/03/dude-be-man-interview/
- Ward, G. Happiness and Voting Behavior. (2019). World Happiness Report. Retrieved from https://worldhappiness.report/ed/2019/happiness-and-voting-behavior/