It’s time for a new social compact

This Labor Day, COVID-19 has made clear that the time is ripe for a new social compact.

When tens of millions can lose their jobs in an instant, why do we still force people to rely on their employers for health care, retirement security and an income floor? When state violence and discrimination against Black people are clear, why do we still depend on a system of social provision constructed largely before the civil rights movement? When so many women and men are stuck at home, why are mothers doing the bulk of pandemic childcare, 50 years after the feminist movement? How is it that essential workers are often paid the least and have so little security?

This Labor Day, working people and their labor organizations can lead the way to a new, 21st century grand bargain that leverages government support in novel ways to build workers’ social protections; this time around, it can be largely unhitched from the employment relationship and without the racist and sexist structural baggage that undergirded the last system.

The nation manufactured the old social contract during the New Deal and World War II, and centered it around employment. The Great Depression revealed the urgent need for a new system to manage citizens’ basic social risks, so we built federal programs like Social Security, minimum wage and labor law that guaranteed workers’ right to a union. In order to access these protective programs, it wasn’t enough to be a citizen. You needed a job — or you needed to be in a family with a job holder. Not only that, but you needed the kind of job most likely to be held by white men, because the occupations that women and people of color dominated, like domestic and agricultural work, weren’t covered. The system assumed women, especially white women, would stay home and raise children, so it never tried to build robust accommodations for child care.

During World War II, the nation expanded this employer-provided social welfare system thanks to collective bargaining. Unions began to accept employer-provided health and retirement benefits in lieu of wage increases, which were restricted by the National War Labor Board. After the war, up to three-quarters of strikes were over health and welfare issues. At first, the gains were limited to union members, but soon collective bargaining set higher wage and benefits standards for much of the industrial economy; in order to avoid unions, employers matched what the unionized giants offered.

This employer-provided social safety net began to break down in the 1970s. U.S. corporations faced a new level of global competition, and employers worked to shed their role as social welfare providers.  After all, U.S. employers provided social benefits that governments guaranteed  in other nations. Corporations began hiring far more part-time workers, turning to contractors, and reducing or eliminating healthcare and retirement benefits. Employers also began to bust unions at a new level in order to avoid collective bargaining. By the 21st century, employers were free to exit the old system, and working people were left to suffer. Then in 2020, the coronavirus stripped away the structure’s final vestiges, throwing millions out of work, health care and even their homes. 

History reveals that major crises upend the status quo; economic depressions, wars and, yes, pandemics create windows of opportunity when major changes that once seemed unthinkable suddenly become possible. This Labor Day, working people and their organizations can demand that the nation build on precedents set during the pandemic, like the $1,200 stimulus payment and the mandated paid sick leave in the Families First Coronavirus Response Act (FFCRA), and erect a new social safety net that guarantees a minimum level of security. 

Universal health care, robust retirement security, affordable housing, quality child care and a minimum income guarantee are now within reach. Such a social safety unlinked from the employment relationship would be far less tethered to the racism and sexism hard-wired into the nation’s job market. 

The biggest danger that working-class people face this Labor Day, the official start to the election season, is that elected leaders might settle for weak, incremental change; minor tweaks and fixes to the social compact will just replicate the old inequities. We’ve all seen the power of working people who have held this nation together in a time of enormous sacrifice and struggle. Now is the moment for working people to demand a bold new social compact that centers their needs and prioritizes their future. 

Lane Windham, Ph.D. is associate director of Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor and author of “Knocking on Labor’s Door: Union Organizing in the 1970s and the Roots of a New Economic Divide.”