The American economy has a problem, and experts aren't really sure how to fix it.
That was the takeaway from Wednesday afternoon's Future of Work panel at the Aspen Institute, which focused on the problem of benefits in an economy seeing more and more independent workers without career-long employers. The panel was part of the think tank's year-long initiative to study the topic.
The current model that the U.S. is hanging onto by a thread is one where many economic benefits -- health insurance, retirement funds and the like -- are both provided and subsidized by a person's employer.
In a best-case scenario, the model is annoying for people who move jobs every few years (which is now a huge portion of the working population). It can mean having to change doctors if a new employer's insurance doesn't have a contract with your regular ones, and creating multiple different retirement accounts that are at the very least a pain to keep track of.
But the system is a disaster for anyone who works outside the traditional employee-employer relationship. Obamacare has helped premiums come down a little bit for those who don't have an employer-sponsored plan, but even those plans cost several hundred dollars per month, even if you're young and healthy.
Health insurance for those who don't have a job that pays for it is often prohibitively expensive. Plenty of people are stuck in jobs that are wrong for them simply because they need health insurance benefits for their family. And a lot of hourly workers find themselves with erratic schedules that just happen to add up to the maximum they can work but still not be eligible for employer-sponsored benefits.
There's been some recent disagreement about just how big the freelance economy is, but you'd be hard-pressed to find someone who doesn't think that the American health insurance system has large gaps that leave out a ton of people. If the dire predictions that the economy will soon be full of freelancers unattached to traditional jobs are true, even more people will soon be left out.
It could get even worse once most of our jobs become automated and our lives become mostly retirement, just sitting around waiting to get sick. While that's a hyperbolic example, it is very likely that as more jobs become automated, new kinds of jobs will pop up that are unlikely to fit our current model. There's no way that our current benefits system is sustainable.
There's a general consensus among policy experts that the way we do things now needs to change. The event Wednesday at the Aspen Institute, "The Next Big Idea: Portable Benefits for Independent Workers," examined why we need to reconsider the status quo.
The panelists generally agreed that we're moving from a manufacturing economy to a service and technology economy, one in which the old employer-benefits model simply doesn't work. Not enough people have, or need to have, consistent employers. "We are on the cusp of creating a new model of organizing economic activity," said NYU business school professor Arun Sundarajan.
But where to go after we get to that consensus? The panelists failed to dive deeply into how that might work here in the U.S.
There's a fairly simple way to fix these issues: plenty of governments in Europe simply provide most of these benefits to citizens, paid for by higher taxes. But that's not how we do things in America. As Sundarajan noted during the panel, funding for any sort of change to the way that we do benefits here "is almost certainly going to come from some combination of the government and the market."
There are already some private solutions, although on much too small a scale. The Freelancers Union, for example, is not really a union, but rather a loose organization of freelancers who pool together to get better rates on insurance.
One of the panelists, economist Douglas Holtz-Eakin, who previously was the policy director for Sen. John McCain's 2008 presidential run, suggested we could pay for benefits using either tax incentives or mandated benefits. That's the beginning of an idea, but pretty much non-specific.
After listening to two hours of discussion, there were very few concrete suggestions. It's pretty clear that no one has a comprehensive answer to what may end up being, after climate change, the biggest problem of the next generation. Hopefully the year the Aspen Institute spends on this gets America closer to an answer.