Opinion

Marco Rubio’s “Common Good Capitalism” Is Just What We Need

Michael Posner

By Michael Posner

While this is a daunting agenda, one that will take years to realize, its importance demands our attention.

By Michael Posner

Last month, Senator Marco Rubio called for what he termed “common-good capitalism.” In a speech at Catholic University that received too little attention, Rubio outlined a framework that embraces the free market but demands more from it than short-term financial gain. He called for a system that ensures dignified work for employees rather than focusing myopically on the celebration of corporate profits. This is a sharp departure from Republican orthodoxy, which, Rubio says, has emphasized the right of businesses to make a profit but not the rights of workers to share in the earnings they help generate. At a time when few are reaching across the aisle, these remarks provide a useful starting point for the development of a much-needed bipartisan approach to our economic future. Democrats should seize the chance to join with Senator Rubio to develop pragmatic measures to address current economic challenges stemming from a market system that too often fails to advance the broader interests of our society.

Rubio’s speech comes at a moment when there is alarming economic inequality in the U.S. and many are struggling to make ends meet. By almost every measure, the gap between rich and poor is growing. CEO compensation in the U.S. has increased 940% in the last 40 years, while the salaries of the lowest-paid workers in the same companies have increased only 12%. Despite continued growth in our GDP, almost half of all American workers between the ages of 18and 64 are in low-wage work. And by some estimates, the wealth of the top 1% of Americans is greater than that of the bottom 90% combined. Growing inequality has serious consequences: life expectancy in this country has fallen for three years in a row, largely due to deaths caused by suicide or alcohol and drug abuse that are more likely to occur in low income communities. Conversely, men at the top of the income spectrum on average live 15 years longer than those at the bottom. Despite our aggregate prosperity, continued inequality increasingly threatens to undermine our national vitality and ultimately our very stability as a society.

This is also a time when the nature of work is changing because of globalization, automation, and an increasing reliance on part-time or contingent employment relationships. Because wages are so much lower in places like Mexico, China, and Bangladesh, a significant portion of U.S. manufacturing jobs, especially in low-wage, labor-intensive industries, has migrated to those places. Building walls and restricting trade won’t bring those jobs back. Likewise, in the coming decades, more jobs will be taken over by machines. Adapting to this reality will require new training and better job-placement services for those whose jobs are eliminated, as well as measures to ensure their economic security during this transition. Adding to the complexity, in recent years, alternative work arrangements have accounted for 94% of net employment growth in the United States. This trend affects both high- and low-skill workers and results in jobs that typically pay less per week and offer fewer hours than workers would like. We have yet to identify practical approaches for addressing the heightened vulnerability caused by contingent employment.

Read the full Forbes article.
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Michael Posner is a Professor of Business and Society and Director of the NYU Stern Center for Business and Human Rights.