By John Lawrence
This is Robert Reich’s latest venture in an attempt to inform the American public about what’s really going on with the economy in this society. He’s tried everything else: Chancellor’s Professor of Public Policy at the University of California at Berkeley in which he teaches a course on Wealth and Poverty, a blog, where he had as many as 300 comments after each post until he shut down the comments due to a persistent vile and threatening commenter who stooped to anti-semitic comments, 13 books, the latest being “Beyond Outrage,” Secretary of Labor in the Clinton Administration, radio and TV appearances, lectures.
He also worked in the Ford and Carter administrations. Reich has always been concerned about those who are struggling to keep their heads above water, and in today’s world that includes almost all of the former members of the middle class.
The major metaphor in the film is a suspension bridge which fits perfectly over a graph of the concentration of wealth that occurred at two points in American history, the first being in 1928 and the second being in 2008. These are the two high points of the suspension bridge and correspond to the two points of peak inequality in American society after which there was a crash: the Great Depression and the Great Recession.
At those two high points in the suspension bridge the upper 1% took home over 23% of the national income. The situation is so extreme that today 400 Americans have more wealth than the lower half of the American people, 150 million, combined.
The movie starts and ends in Reich’s Berkeley class on Wealth and Poverty. Many scenes are shot while Reich is driving his Mini-Cooper, a car he says is “proportionate” with his diminutive height. He uses self-deprecating humor by showing “the box” which he carries to speaking engagements so he can see over the lectern. A rare genetic disease caused his lack of growth. An interesting fact that I hadn’t known is that Michael Schwerner, one of three civil rights workers murdered in 1964 by the Ku Klux Klan in Mississippi, was a personal friend and “protector”. Since bigger boys picked on him he became friends with Schwerner who looked out for him. Reich decided to spend his life serving the underserved after he heard of Schwerner”s murder.
The major study on inequality was done by Emmanuel Saez (also at Berkeley) and French economist Thomas Piketty. Their innovation was to measure American income inequality historically. Existing data went back only to the 1970s. Tedious archival research at the Internal Revenue Service allowed them to stretch the data all the way back to 1913. After World War II, there was a period in which the middle class did quite well. This lasted till approximately 1980. After that median wages remained flat up till the present day while the income of the upper 1% skyrocketed thus producing epic inequality.
The US has one of the most unequal distribution of incomes and wealth of any country in the world. Rated by the gini coefficient, a measure of inequality, the US has more inequality than Turkey, Iran and the Ivory Coast to name just three.
Robert Reich does not advocate any radical solutions to this problem despite the fact that Bill O’Reilly has called him a communist on Fox News, the archival footage of which is included in the film. He points out that the two high points of the suspension bridge correspond to the points at which taxes were extremely low for the upper class. Reich is basically a Keynesian who would like taxes raised on the rich with the money spent to rebuild infrastructure thus providing middle class jobs. He points out that the decline of the middle class exactly corresponds with the deunionization of the US, but labor unions will probably not be coming back any time soon due to the facts of globalization and robotization. American workers do not have any leverage for jobs that can either be shipped overseas or roboticized. Unions were able to bargain for better wages when the corporations really needed them in the period 1945-1980. They don’t really need them now.
Reich doesn’t talk about economic democracy or the cooperative movement in the world today. He doesn’t take on Wall Street or suggest public banking as an alternative. He seems to long for the good old days when taxes on the rich were high and good union jobs were plentiful. But that doesn’t address the present day situation. He seems to think like most conventional thinkers that more education is the panacea so that we can “compete in the global market.” Along those lines Anthony Carnivale has done a study on the economic value of various college degrees. The study was just for four year bachelor’s degrees with no advanced degrees included. He found that the highest paid degree was Petroleum Engineering with students being recruited on campus with offers over $100,000 per year to start.
That contrasts with a degree in psychology for which there was an average starting salary of around $25,000. So if you have no conscience about contributing to global warming, you can major in petroleum engineering, go to work for Exxon and make over $100K to start. There is seemingly an inverse relationship between highly paying jobs and highly ethical jobs. For instance, about half the Princeton graduating class last year went to work for Wall Street along with 25% of the classes of Harvard and Yale. So yes education pays as long as it is in what I would consider an unethical field. It’s no secret that there are plenty of jobs in the oil and gas industry, on Wall Street and in the military-industrial complex. The question is do you want money or do you want to be able to sleep at night?
The trouble with the seeming obsession with education as a way to hold onto middle class status is that the whole educational system is oriented toward preparing one to go to work as an employee. Getting a job means going to work for someone else. The educational system does not prepare you to go to work for yourself. A college degree is just a ticket of admission for a billet in the corporate world. If we became educated with a view towards becoming self employed, education would take on a much different complexion. However, the best jobs are self created jobs especially now since corporate jobs are becoming few and far between and the cost of a college diploma is $20K-$50K in student loan debt. With that debt there is no guarantee that you will even get a job. The social contract that a college degree guarantees a good middle class job has totally broken down. As Thomas Friedman says, “Need a Job? Invent It.”
“Inequality for All” starring Robert Reich and directed by Jacob Kornbluth can be seen at the Landmark Theatres in either La Jolla or Hillcrest.
John Lawrence
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I’m going to see Inequality for All simply because it made you, John Lawrence, raise all the difficult questions; for starters, what is the good life, and how does money relate to it? It seems our leaders have already decided: the more money one has the better, the less money the rest of us have, the better.
Are we better off going to the supermarket — which was supposed to offer ease of purchase — going down aisle after confusing cluttered aisle picking out our prepared foods, then checking ourselves out at a robot cashier? Or can we cook?
Couldn’t the universities be teaching people how to work for themselves, in addition to teaching what corporations need from us?
Reich seems not to address those questions. It may be that, as you say, he wants to restore the consumption universe, ignoring the effects of a global production/consumption system that eliminates a sense of the value of work.
We can’t all be billionaires, and should be asking why people want to be (I had to replace the m in millionaires) billionaires.
Thank, Bob, for the comment. Yes, politicians and economists are obsessed with higher GDP and since our GDP is 70% consumption, they are obsessed with getting us to buy more stuff. If everyone bought less and grew and cooked their own food, for example, we would all be better off, but GDP would go down thus there would be a recession. Many of the activities that contribute to GDP growth, Wall Street, for example, we would be better off without, but again GDP would decrease. I say to hell with GDP; let’s build society on an ethical basis in terms of work and consumption and not be obsessed with GDP. We’d be better off if GDP was only 50% consumption.
Fantastic post John :o) The last two paragraphs of your article regarding education and employment resonated with things I have been thinking about/living for the last decade and a half as a concerned citizen, parent and employer/self-employed person.
I had the chance to live outside of the United States during my elementary school years, in a society where the vast majority of people a) worked for themselves to earn a living (i.e. did not go to an office, plant, retail store, etc.) and b) had to produce and/or barter for some portion of what they consumed. I am also lucky that both sets of my grandparents were self-employed–one set had no education in the formal sense, while the other set had some years of high school.
When I went to university my mother, whom has an Associate’s degree in nursing, encouraged me to treat university NOT as “vocational” school, but instead focus my efforts on learning a) how to learn and think and b) how to understand people and society. (I majored in history and dabbled in anthropology.) My mother also provided me with only the barest of material necessities throughout my high school years, but with the help of my grandparents paid for all but the final year of my university education. I left university debt free.
After brief stints in the corporate world after university and graduate school in the mid- and late 1990s I decided to start my own business. I learned a lot during my few years in the corporate world, but left to start my own business due to feelings that:
a) I was not being adequately compensated for the effort I put in and the value I brought.
b) Compensation scales in the workplace were not fair or equitable (gender, race, education, etc.)
c) I was not doing the work I really wanted to do in ways that I thought it should be done to provide the greatest value to the business and to those the business claimed to serve.
d) The types of relationships (personal, social, economic, etc.) that corporate-centered cultures fostered and reproduced were neither healthy nor sustainable and not something I wanted to have any part of.
All this is to say that leaving the world of employment to go out on my own was not such a big leap because I had:
a) Spent several years as a child in a society where many people had to earn a living without “employment”,
b) Grandparents that had worked for themselves and
c) Focused my education/learning years on things other than training for a specific vocation/profession.
Few in our society have the experiences and models, the encouragement and training or the resources and means to work for themselves. As a parent of school-age children I am becoming increasingly aware of and forced to reckon with all of this. I am concerned by how structurally embedded all of this is.
I supposed Reich’s film will not have all the answers, but hopefully will open a door to encouraging people to talk and to start to ask questions like, “what can I do?” or “how can we change the equation so that all of us and the young people that follow will have the life options and the opportunities to thrive tomorrow?”
Thanks for your cogent comment, John. If schools would only not be totally oriented towards training people to go to work as an employee, that would be a step in the right direction. There should be a track where you can get the information that would help you to be self-employed. Self-employment has its downside, but I would not trade the years I’ve had as a self-employed person for any job as an employee. It is the ultimate freedom.
The downside is that you don’t have a predictable monthly income so you have to adjust accordingly; you have to change your orientation. For instance, you have to avoid getting into a situation where you have regular monthly payments. Then you can pretty much survive by shifting things around so that you use savings from the months that you make more than expenses to months in which you make less. It’s a totally different mindset from the consumer culture where you go into debt on everything and have regular monthly payments which consume all of your income. Over a lifetime the amount you save on interest alone is astonishing.
The upside though is that you will never lose your job or be downsized!