Lately, headlines have touted the nation’s robust economy. But there’s a jarring paradox that isn’t making the front page: millions of Americans’ economic lives remain stagnant. Even as businesses rack up record profits and unemployment falls, nearly half of all Americans report not having $400 in the bank to weather an economic shock. Plus, the vast majority of the American workforce hasn’t seen a raise in decades. Today, roughly one in four working adults earns a wage that’s insufficient to lift a family out of poverty. When working full time in a strong economy isn’t enough to beat back poverty, what are American families supposed to do?
To address this challenge, the Aspen Institute’s Economic Opportunities Program and the Financial Security Program have joined forces over the past three years to host the Economic Security Summit. “The problem of rising economic insecurity is understood much better,” said Alex Mazer, a 2017 summit participant and founding partner at Common Wealth, “when you connect two conversations: financial well-being on the one hand and jobs and work on the other.” Over several days in Aspen this July, leaders from across disciplines came together to focus on solutions. “The implications of the problem are not just economic,” Mazer added. “Economic insecurity poses a threat to a functioning system of democratic capitalism—and to democracy.”
With the stakes made clear, participants at the 2018 Economic Security Summit addressed three key themes: institutions, ownership, and incentives. In small groups, economic leaders and social innovators examined new institutions, policies, and platforms that support workers and increase their access to benefits. They brainstormed incentives for businesses to create good jobs and for employers to improve the financial health and security of workers. And they looked at expanding access to asset ownership for low- and moderate-income workers. Each group also explored how market changes, policy, and technology will affect potential solutions.
Institutions can be exceptionally slow to change, especially when it comes to helping employees. So the small group discussing institutions centered on the need to rebalance economic power structures to give working people what they need to lead dignified lives—both during their working years and in retirement. The group focused on reforming institutions to support employees’ voices at work, provide benefits that promote financial health, and offer opportunities for skill development. “There’s currently an imbalance of power in our society,” says Maureen Conway, the vice president of policy programs and the executive director of the Economic Opportunities Program at the Institute. “We need to build the organizations that will shift that balance over time to give working people more control over their work and their lives. Families are struggling now, and we need to find solutions that make a difference for them today.”
The group working on incentives focused on strategies to drive a greater share of market investment toward firms that view worker stability and financial health as critical to their long-term success and sustainability. They looked at ways to help institutional and values-based investors spend money in more effective ways. They discussed fostering corporate leadership at both the CEO and emergingleader levels; standardizing organizational metrics on worker incomes, financial health, and well-being; and encouraging businesses to recognize talented employees as vital to success. The group agreed that company brand and reputation drive not only business success but also employee satisfaction.
Finally, the ownership working group wrestled with questions about the future of wealth in the United States, and explored new and innovative ideas to democratize asset ownership for more Americans. “Summit participants were keenly aware of the role that wealth and ownership has played throughout history in shaping mobility at the household level,” Ida Rademacher, an Institute vice president and the executive director of the Financial Security Program, says. “If we are serious about expanding economic security and reducing inequality, opportunities for ownership must become more diversified, widespread, and accessible—especially for communities of color and women.”
The group identified one exciting near-term solution: leverage the bipartisan Mainstreet Employee Ownership Act, which was recently signed into law, to broaden the base of people who have significant ownership of business assets.
The conversations were often challenging, but they helped to forge new relationships among experts who rarely meet in the same room. At times, participants disagreed on what issues to tackle first: worker pay, shareholder primacy, or wealth-building opportunities. “Some of the conversations here were tense, and that’s a good thing,” Ben Mangan, a senior fellow at the Institute, says. “That will lead us to hard truths and solutions.” Though summit participants didn’t agree on everything, a palpable sense of possibility emerged—a sense that the ideas and relationships formed at the summit can go a long way toward creating a more inclusive vision for economic growth and prosperity for generations to come.