The New Welfare Capitalism: The Failed Liberal Projects of the Post-Industrial Period

Carmen Brick, University of California, Berkeley

Heightened poverty and inequality have redirected scholarly attention to the Democratic Party and their failure to develop a policy agenda fostering economic security in the post-industrial period. This paper adds to this debate by examining how liberal Democrats responded to the dual jobs-welfare crisis of the post-industrial period at the state level, focusing upon two innovative liberal states, Wisconsin and California. Existing literature has examined other factions of the Democratic Party, such as Southern Democrats and New Democrats, and this paper fills an important gap by studying the opportunities, ideas, and strategies of liberal Democrats during a crucial period of change between the 1970s and the 1990s. This paper argues that liberal Democrats pursued new projects in response to the jobs-welfare crisis, but these projects failed due to their internal limitations and due to liberal Democrats’ political errors. Empirically, this paper traces the origins and outcomes of two liberal projects, Wisconsin’s income maintenance strategy and California’s jobs mobility strategy. The income maintenance strategy offered work subsidies to stimulate employment and to minimize deprivation, assuming slower job growth and declining job quality and privileging the economic rationalization of the welfare state. The jobs mobility strategy heavily invested in the education and training of economically marginalized households, assuming an expanding economy and privileging a Civil Rights ethos of equal opportunity. The paper finds three reasons neither project ultimately became the model for today’s system: (1) liberal Democrats only advanced their projects by agreeing to more restrictive welfare policies, which in turn shifted national debate rightward; (2) liberal Democrats needed the support of New Democrats to further their projects and were not able to sustain an intraparty coalition; (3) neither project was a sufficient policy bridge for the jobs programs later proposed as a necessary complement for addressing the jobs-welfare crisis.

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 Presented in Session 130. Policymaking in U.S. Politics