by Marco Rubio
But government, which has been expanded in the name of the poor and the middle class—Americans like Jose—has only diminished their opportunity to get ahead. For example, government regulations and mandates in the Affordable Care Act have created too much uncertainty to risk starting a new business. Both the legislation and the rhetoric coming out of Washington are making Jose and millions like him feel that going into business today is only for those who can afford to hire the army of lawyers and accountants it now takes to simply follow all the laws. That is why he has concluded that the smartest thing he can do now, he says, is “just wait and see.”
“Nancy Pelosi said it,” Jose says. “‘We have to pass the bill to find out what’s in it.’ If she’s going to take that attitude—if our leaders are going to take that attitude—why would they expect the citizens to do any different?”
Government doesn’t have to be the enemy, but too much government has produced a new kind of inequality in America: opportunity inequality. This is the inequality between those who can afford to influence government and those, like Jose, who can’t. Income inequality—so much the focus of liberals these days—is a by-product of opportunity inequality. After six years in which those most hurt by the economic downturn have fallen further behind, it is time we acknowledge how government overreach is reducing opportunity and threatening the American Dream.
Big government has always been an impediment to upward mobility, and this is truer than ever in the new economy of the twenty-first century. We no longer have simply a national economy; we are all participants in a global economy. Things happening on the other side of the world can have a larger impact on our lives than things happening on the other side of town. In a global economy, it’s become easier and more cost effective for the jobs in manufacturing, customer service and computer support that used to be done by Americans to be done in India or the Philippines.
Whether we like it or not, globalization is real and it is here to stay. Our challenge now is to position ourselves to take advantage of the opportunities it presents us, not simply suffer from the disruptions it creates. We hear a lot about global competitiveness, but the challenge we face is much more than just a race for power or national bragging rights. We are in competition with other nations for the investment, innovation and talent that will create good, well-paying jobs. The health of the middle class is at stake.
The reason big government fails now more than ever is that it makes it harder for us to win this competition. If we want to restore the American Dream, we need tax policies, regulatory policies and spending policies that make America the best place in the world to invest, and the easiest place in the world to create new businesses and new jobs through innovation. Instead, big government gives us tax policies, regulatory policies and spending policies that are making America a more expensive and burdensome place to invest and innovate.
Another culprit economists increasingly point to for the changing economy is technology. For most of the years after World War II—including when I was growing up—new technologies added to the productivity of American workers, helping us produce more and faster. But today’s advances in artificial intelligence and robotics aren’t always helping American workers. In many cases they’re replacing them. I don’t buy into the dystopian scenarios of self-aware robots enslaving mankind, but you don’t have to be a sci-fi conspiracy theorist to acknowledge that plenty of good, well-paying jobs are being taken over by machines. All you have to do is go through the self-checkout line at the supermarket, or ask UPS workers nervously eyeing Amazon’s plans to replace them with delivery drones.
Just like globalization, technology is here to stay, and our challenge is to find the opportunities it presents and to take advantage of them. These technological breakthroughs aren’t all bad news for the middle class. Even as machines take over more functions in our modern economy, we will still need humans to build them, fix them and work alongside them.
The key to using new technology to our advantage is having educational and vocational training systems that produce workers capable of working with it. In his book Average Is Over, economist Tyler Cowen sees a future in which high earners are those who “get” computers and information technology. Low earners, he argues, will be those who don’t—the less technologically adept who will be forced to work in jobs attending to the needs and wants of the high earners.
Cowen concedes that you won’t have to be a future Steve Jobs or even a computer programmer to be among the high earners, just someone prepared to work with technology to solve real-world problems or fill real-world needs. He points to the fact, for example, that Facebook founder and zillionaire Mark Zuckerberg was a psychology major, not a computer science major. Zuckerberg didn’t know how computers work, but he understood how they could be used to fill a human need.
Cowen’s vision of the future is very interesting but ultimately, I think, pessimistic. He puts the split between the high-earning winners and the low-earning losers in the coming high-tech economy at 15 to 85. There’s no question that technology is changing and will continue to change American jobs. But I am certain we can do better than a future in which only 15 percent of us adapt to working with that technology.
Here, again, big government is making it harder for Americans to acquire the skills they need to benefit from the opportunities created by technology. Our current system of education, from kindergarten through graduate school, was designed in the middle of the twentieth century. That is, it was designed for an era in which we had plenty of low-skill jobs that paid middle-class incomes, a time when higher education was an option, and our higher education students were primarily recent high school graduates.
In the twenty-first century, there is a rapidly shrinking pool of middle-income jobs for low-skill workers. Education is no longer an option—it is a necessity—but our system is failing to prepare Americans for the jobs of the new economy. A recent international study showed the United States falling dangerously far behind other countries—such as Japan, Sweden and Chile—when it comes to promoting the skills needed to compete in the modern workforce. We’re only average in literacy and problem-solving skills compared with most of the countries we compete with. And when it comes to math skills—the skill most prized in today’s new economy—we’re bringing up the rear. Only Italy’s and Spain’s workers performed worse than ours in math. And worse yet, while other countries seem to be racing to catch up, our skills gap is deepening. While younger workers in other countries consistently scored higher on skills tests than the generations that came before them, our thirty-year-olds actually scored lower on literacy in 2012 than thirty-year-olds in 1994 did.7
Big government is failing Americans because, instead of promoting transformational reforms to our education system, our leaders just want to spend more money on the status quo. This is true in higher education, where instead of creating the space for innovative and affordable higher education programs, the system seeks to shield itself from competition and innovation.
It’s especially true in primary and secondary education. When Democratic politicians at all levels of government actively oppose strengthening our schools through competition and parental choice, they are hurting the very people they claim to care about most—and at a time when education is more important to achieving the American Dream than ever before.
In New York City, for example, Mayor Bill de Blasio has declared open season on publicly funded charter schools. Rich families can afford to send their children to virtually any school they choose. But by forcing poor families to send their children to failing and stagnant schools, Mayor De Blasio is making those who need the most help less able to compete for the middle-class jobs of the future. The fact that these are the very same politicians who spend their time decrying income inequality only adds insult to the injury they are inflicting on Americans.
There is one more reason why the American Dream is slipping out of the reach of
so many families. It is perhaps the hardest one for us to solve through government and yet one that we simply cannot ignore. And that is the decline of the family itself.
The American economy isn’t the only thing that has changed since my parents came to this country. Since the 1950s, marriage has declined and the number of babies born to single mothers has soared. We can no longer afford to ignore the connection between the health of families and the health of the American Dream.
It’s not even controversial: Social scientists, economists, think tanks from the left-leaning Brookings Institution to the right-leaning Heritage Foundation—everyone except too many politicians—agree that the health of the family is key to upward mobility. Brad Wilcox of the University of Virginia studies marriage and its effects on income and well-being. He has found that young people are 44 percent more likely to graduate from college if they are raised by their married parents. Children from intact families are also about 40 percent less likely to have a child outside of marriage.8
These are the two things—getting an education and avoiding having children until marriage—that are increasingly key to achieving the American Dream. They are two critical parts of what social scientists call the “success sequence”: First get an education, then get a job, and don’t have children until you are married. Studies of census data show that if all Americans first finished high school, worked full-time at whatever job their education qualified them for, and then married at the same rate that Americans got married in 1970, the poverty rate would fall by an astonishing 70 percent.9 Young Americans who follow the success sequence have only a 2 percent chance of falling into poverty and a 75 percent chance of making it to the middle class.10
Big government fails now more than ever because it ignores the importance of the success sequence and the family unit. It views the breakdown of families as a product of poverty—not as the cause of poverty. As a result it promotes antipoverty programs to support families instead of pro-family programs to eradicate poverty.
The fact remains that there is no government program—no matter how well intentioned or how generously funded—that has ever or could ever hope to achieve for American families what they can achieve by following the success sequence. It works regardless of whether you’re Hispanic, black or white, female or male, college or high school educated. It is, in short, proof of the proposition that in America you can still achieve success no matter who you are. So why isn’t the health of the family a bigger part of our conversation on saving the American Dream? Why aren’t politicians and Hollywood celebrities and everyone who claims to care about helping people get ahead in America shouting this from the rooftops?
For conservatives, talking about family structure inevitably leads to charges of racism, sexism or somehow trying to force our religious beliefs on others. Political experts ceaselessly lecture us that this is no way to win elections. Liberals seem to think questioning such issues is judgmental and unjust. On issues of family and values, the Democratic Party, the party of big government, becomes curiously libertarian.
This is no coincidence. Proponents are careful never to state it outright, but at the heart of the big-government approach are two central messages. The first is that government is our national family now. The role that husbands, wives and parents have traditionally played in the American family, this approach asserts, can now be safely assumed by government. When it comes to managing your health care, government—not the consumer—knows best. The same logic applies to the schools your children attend, how you save for your retirement and even how you choose the light bulbs for your home.
The second unspoken message of the government-centered approach is the same message that those who believe income inequality is the central challenge of our time believe: that growing the economic pie to benefit the poor and middle class is no longer possible. The only just course is to use government to adjust the size of the slices.
The minimum wage debate is a good example of this. Not surprisingly, raising the federal minimum wage from $7.25 an hour to $10.10, as the president has proposed, polls well—people like the idea of more money. But there’s no getting around the law of demand: When you make something—even labor—more expensive, people buy less of it. The Congressional Budget Office predicts that an increase of the minimum wage to $10.10 could cost as many as five hundred thousand jobs.
My family and I saw this firsthand last spring when we stopped for lunch at a Chili’s in Broward County, Florida. We were surprised to find what looked like an iPad on the table. The hostess who seated us explained that this mobile device would be our server. On it, we could tap items we wanted to order and pay the bill by swiping our credit card. It reminded me that a machine had just replaced at least one server in Florida. If we raise the minimum wage, companies like Chili’s will be driven to replace workers with machines sooner than planned.
In fairness, the same CBO report said that nine hundred thousand Americans would benefit from the wage hike. But who are those Americans? Rather than mothers and fathers struggling to support families, the data show that over 74 percent are childless adults or teenagers. Just 16 percent are married parents with kids.11 So it’s true that an increase in the minimum wage polls quite well, but in practice it would cost half a million American jobs. Some will benefit, but most won’t be the hardworking parents who need help the most. If the goal is to help those struggling the most in the current economy, there are better ways to go about it than raising the minimum wage.
What are those ways? In response to calls to raise the minimum wage, conservatives typically double down on policies to grow the economy and create jobs. This approach is correct in the long term, of course. Economic growth is ultimately the answer. But in the meantime, people are hurting, the minimum wage is something people understand and they hear only that conservatives are against it.
Stagnant wages are a real concern to millions of Americans. We can’t just tell people what we are against. We also have to outline what we are for. We can find creative answers that help struggling families while staying true to our small-government principles. For instance, one way to help low-wage workers—both single moms struggling to support kids and single men in need of a foothold in the world of work—is to provide wage subsidies to targeted workers. I have proposed a targeted wage subsidy plan that I discuss in detail in Chapter Three. For now, suffice it to say that it would effectively boost the wages of workers without forcing the cost on employers.
Yes, it is government help for struggling families. But it would not have the job-killing effects of mandating that employers pay employees more than the market will bear. Yes, it involves government spending, but primarily by reallocating money we are already spending. Most important, it is the right thing to do, not just for struggling American families, but for the good of the country as a whole.
The American economy has changed, but our government has not only failed to change with it, it has made the challenges of the new economy worse. Jose and his family are living examples of this. Big government’s complicated rules are keeping him from going back into business for himself. Its tax and regulatory policies are crushing innovation and investment. Its commitment to protecting the educational status quo does nothing to help Jose acquire the skills he needs for a better job. And its stale ideas, like increasing the minimum wage, don’t help Jose realize the American Dream. They just define the dream down.
Chapter Two
MAKING AMERICA SAFE FOR UBER
On Monday mornings I teach a class on political science—Florida politics, to be exact—at Florida International University in Miami. It makes my mornings at home a little more hectic, getting the kids out the door to school and getting myself to campus by eight a.m., but it’s worth it. Teaching is rewarding and it gives me a sense of what young Americans are thinking these days. More often than not, my students surprise me.
In one class last year I overheard my students t
alking about how easy it is for their friends in Washington D.C. to get a ride home after a night out on the town. They use a service called Uber, they said. Uber was pretty new to Americans at the time—and nonexistent in Miami. Like most young people, my students are excited by the possibilities of technology to make their lives better. (And when you add partying to the mix, their level of interest multiplies exponentially.) What they didn’t know then was that Uber wasn’t just in Washington but in cities all over America, and even in Europe. It’s an app that you download to your phone, set up an account and enter your credit card information. When you’re ready to go home, the app locates the nearest car and sends it to your location. It’s quick and easy, and no cash changes hands.
The students in my class were genuinely intrigued by this innovative service and wondered why they didn’t have it in Miami. I explained to them that it was because of regulations created by government. Politicians, I said, had passed rules to stifle competition that might threaten their constituents and supporters in the existing taxi and sedan service industry. In Miami, for example, there was a government-created cap on the number of sedan medallions allowed in the city. That regulation effectively shut out any competition to the existing car service companies—competition like Uber.
