American Dreams and European Ideals:
Why the Future of Work is Transatlantic
10 years after the collapse of Lehman Brothers, the American dream feels like an empty promise to many. The belief that hard work allows everyone to rise from rags to riches has increasingly become an illusion, with upward income mobility plummeting throughout the last decade and the election of Donald Trump cementing disillusionment with the American dream in politics.
Meanwhile, the European welfare idea — which focuses on fairness and security — has also seen better days: In particular Southern European countries had to downgrade their social ambition in the aftermath of the European economic and currency crisis. That the proposal for a European unemployment insurance scheme regularly appears on the political agenda without being translated into action is a sign of its paralysis, not its strength.
While the story of the American dream is about the success and agency of the individual, the European welfare narrative carries an idea about the collective. Despite this key difference, both have one defining element at their core: work. For people around the world, the blend of the American rags-to-riches tale and European welfare ideas define the attractiveness of the West: an upward social dynamic and downward safeguards — two key promises that allow people to look into the future with confidence.
Things will not get better in time. On the contrary, the digital transformation presents an additional, inevitable challenge to both notions: What if hard work simply will not suffice to succeed in a digital world? And what if new jobs will only replace, say, 50 percent of the jobs that disappear, creating a class of those who are permanently unemployed?
Mark Zuckerberg did not rise from rags but was a student at Harvard University when he started Facebook. Google’s founders Larry Page and Sergey Brin developed their search algorithm at Stanford University, not in a struggling industrial city like Detroit. Their examples do not make the idea of the American dream any more credible. Likewise, the widespread use of artificial intelligence and other advanced technologies may well lead to massive job losses, confronting the European welfare narrative with its biggest challenge yet.
For the American dream and the European welfare narrative to regain their credibility, the idea of work at their cores must remain applicable to a digital world. This can only be achieved by a set of targeted policies and not by focusing narrowly on labour market policy. As Ylva Johansson, the Swedish minister for employment and integration, told the New York Times last year: “We won’t protect jobs. But we will protect workers.”
As much as the challenge is about work, the solution lies in other policy areas, such education or taxation. Work will be rather the overarching element to connect different policy initiatives which altogether put into practice the promises made by the American dream and the European idea of the welfare safety net.
It is incredibly hard to predict what kind of education we need in a digital world. Computer science may become irrelevant if algorithms learn to write code on their own. Therefore, the knee-jerk call for a greater focus on STEM subjects alone will not do the trick. Rather, policymakers should aim at strengthening universal skills. The Partnership for 21st Century Learning has identified the four Cs — critical thinking, communication, collaboration, and creativity — as the most important ones. The good news is that learning these skills is not limited to classrooms, making quality gaps — in particular in US school system — potentially less significant. This creates opportunities to make education policy more inclusive.
Taxation offers another way to revive the welfare narrative in particular. If value in our economies is increasingly created where data is generated and used as a key resource for other services, taxing the profits made with this data can be more effective than taxation of labour. Putting taxes on data can create the leeway for reducing the tax burden on salaries. Particularly, lowering the tax burden for jobs in care work, education or community service can strengthen welfare systems: it solves the problem of the lack of financial incentive for those activities and could encourage people to move into these hard-to-automate jobs.
Saving either the American dream or the European welfare ideal will not do the job. We need both for people to be able to look into the future with confidence and thirst for action. This is why we should understand building the future of work as a transatlantic task. It is worth the effort. No less than the credibility of the West as a role model for the digital world — for Americans, for Europeans and globally — depends on them.
