What you describe can only happen in an unregulated capitalist economy where the government is dedicated to the false premise that business will do the right thing if left alone and everyone will benefit. I think we can toss that trickle down nonsense into the trash bin of failures now. The jury is in and it is a lie that gave us a population that is literally half poor and one of the most corrupt governments in world history.
The average base pay for a GM assembly line worker is $20 per hour. Before 2007 the average base pay was considerably greater. Additional benefits include cash bonus, stock bonus, profit sharing, health coverage (medical, dental, vision), 401(k) and paid time off.
Most modern economies, even those which import many manufactured goods, consider that minimum wage and their governments provide almost all of the “benefits” you listed at no cost. And no, they aren’t “socialists” or going broke. They have vibrant capitalist economies with most American companies happily doing business there, their societies are less prone to crime, their healthcare outcomes are better, and they are generally much happier because they are secure in their basic needs, including a dignified retirement that they don’t have to pay for.
Yes, their tax rates are considerably higher than ours, but not to “pay for” their benefits. Besides, simply adding what most Americans have to pay for healthcare in our insurance-based system puts us close, if not over, their total taxation. They also have their share of wealthy people, but not as much total accumulated wealth as we allow to drain our economy, but that isn’t their secret either. The real secret is that they had to rebuild their systems from scratch after WWII to take care of all their people with no wealth to build on. Their productive capacities were decimated completely, so their old gold standard capitalist models simply didn’t work.
They did this by taking their cue from us. We managed to ramp up for the war at a time when there was no wealth to “pay for” it, having endured a long depression just prior. The only way we could do that was to suspend the restrictions of the gold standard domestically in ’34 and create the money needed by the economy to restructure itself.
There never was any shortage of goods to purchase during the depression, so inflation was not a concern until the rations of the war effort took their toll after everyone was employed and capacities were at 100%. FDR managed that as well as could be expected by allowing anyone to purchase Treasury bonds and increasing taxation across the board, The taxes reduced demand in the economy and the bonds moved productivity reward into the future via debt.
The main feature adopted by European nations after seeing our success pre WWII was the federal government positioning itself as the employer of last resort. Using the fiat currency to provide demand from the bottom up secured supply chains against domino collapses and produced Treasury bonds to prevent inflationary pressure or rent-seeking investments.
America and Europeans advanced fairly well in sync until the oil embargo created extreme inflation in the ’70s and opportunistic politicians used the “stagflation” and the forced recession after to lay blame for the mess on government’s spending made necessary to allow the people to purchase goods that were all made more expensive with our energy all but totally dependent upon fossil fuel imports. Reagan very shrewdly used the voter’s concept of finances from the perspective of a currency “user” to promote taxation as “revenue” from which government spent to pay for programs.
The resulting animosity toward “takers”, mostly defined by race, prompted the demand for corporate tax cuts and far less trust in government to stimulate the economy. The debt, nothing more than an accounting entity at Treasury without a gold reserve to defend, was brought front and center in all economic discussions as a mortgage on future taxpayers. This simple switch in perspective received little pushback from the left, especially a wildly incompetent Volker and the meek-mannered Carter. By the time the left had another chance to set policy it had abandoned labor in the quest for deep-pocket donors and had committed to a neoliberal agenda of market-driven capitalism.
Once one properly views the currency as a monopoly patent on the unit of measure that denominates taxes, not a thing that there is a limited supply of or a result of commerce, it becomes obvious that the issuing government can “afford” anything that is for sale priced in dollars, including the excess labor the private sector rejects. A federally funded job guarantee at a livable wage with full benefits would set the bottom for private sector employers and act counter-cyclically to the business cycle.
The administration could be at any level to make best use of the labor pool, but the funding must come from the deployment of the fiat currency at the federal level. This anchors the economy in wages again instead of investment, interest rates, or whims of banking, and would be much more difficult to cut than safety nets that are seen as burdens on producers because no productivity is traded for benefits. While the definition of “work” would be entirely flexible the program would offer visible results to reduce the impression of “takers” feeding on the productivity of others. In such a wage anchored economy the availability of cheaper goods would be an asset, regardless of their source.
