The former U.S. Secretary of Labor Robert Reich discusses the movie Inequality for All, his thoughts on the minimum wage and the Obamacare, and details of his date with Hillary Clinton when they were both university students in this Time Magazine interview.
Self-study activity:
Watch the interview and say whether the statements below are true or false.
1 The United States has the most equal distribution of income of all developed nations.
2 The US gets pragmatic and makes changes at the last minute.
3 In the US only the poor don’t have enough purchasing power to buy what the economy’s capable of producing.
4 Professor Reich estimates that $50 per hour is a fair minimum wage.
5 A lot of citizens blame themselves for their lack of success in society.
6 Inequality is a problem which just affects American society.
7 Good public policies in education and health mitigate inequality.
8 Professor Reich had a date with Hillary Clinton recently.
9 Hillary Clinton likes to have an inordinate amount of butter on her popcorn.
Hi, I’m Belinda Luscombe from Time. Robert Reich is the former Secretary of Labour under President Clinton. He’s also the star of a new movie, Inequality for All, and he’s here taking questions from us today. Professor Reich, welcome.
Thank you, Belinda.
Of all developed nations, the United States has the most unequal distribution of income, and we’re surging toward even great inequality.
So I have to say that after watching this movie I kind of felt I’ve got to, I’ve got to leave America. Are we that doomed?
This is an optimistic message, Belinda. I think that as Winston Churchill is reputed to have said, America always does the right thing after exhausting all other alternatives. So I think that, you know, our history is one of doing the right thing, rolling up our sleeves and being very pragmatic when the going gets very tough and when we recognize, we have to actually make changes.
Isn’t income inequality just part and parcel of the capitalist system, I mean, isn’t it actually good?
But you come to a question of how much inequality then becomes detrimental to society. We’re getting to that tipping point because when so much of the income and the wealth of a country goes to the very top, the vast middle class and the poor don’t have enough purchasing power left to buy what the economy’s capable of producing, which means that you are almost necessarily subject to very anemic recoveries booms and busts as the rich speculate and a very high chronic unemployment.
Can you give us a dollar figure on per hour what you think the minimum wage should be?
I would say that a rule of thumb ought to be taken the minimum wage in 1968, adjust for inflation to today. But then, also adjust for productivity because, of course, the economy is much larger. Per person, productivity is much higher. If you adjust for productivity as well, you get to a minimum wage of around $15.
There’s a moment in the movie when you’re talking, you’re at a union meeting, about whether or not a mine should deunionise or unionize. And there’s a gentleman there who, who feels like the unions would be not in his interest. Now, how do you reach somebody like that?
Well, it was even more poignant. If you remember in the movie, he says, look, I’m not intelligent enough. I don’t have the education, I, you know. And at the time, I... just my heart went out to him because he… a lot of people who are not doing well in our society blame themselves. Hopefully, he and others who will see the film will understand that an economy is simply a bunch of rules. How we can change the rules and make them work so that the economy works for more of us, not just for a select few.
You could almost argue that as America has become more income unequal, the rest of the world has been catching up. The jobs that Americans used to do have made people in developing countries richer, is this not just more like an international imbalance that’s being redressed?
Not really, inequality is widening all over the world. I mean, China is surging towards inequality. Japan, a notoriously egalitarian society, is becoming more and more unequal as well. But different societies and different nations have mitigated the, the trends towards greater inequality more or less successfully. You can mitigate inequality by providing a very good education for all your young people. You can provide public investments in infrastructure that enable everybody to get to work relatively easily and afford housing. And we can go through issue after issue after issue in which the effects of inequality are reduced by good public policies. In the United States, we don’t, we do very little, we do little if anything.
Which sort of brings us to universal health coverage because that’s the sort of ultimate expression of we’re all in this together. How do you feel that the Obamacare rollout is going?
Well, it’s a little bumpy but I think that once people that they have healthcare, that they don’t have to worry about it even if they have pre-existing conditions and their children don’t have to worry about it, I think that they will embrace it.
Is it true you went on a date with Hillary Rodham? This is what the internet tells me.
Well, I didn’t remember it. When she was running for president or for the Democratic nomination for president, I got a call from the New York Times reporter, and he said, we found this collection of letters and apparently she had a date with you Then he asked, is there anything you can remember about that date which might shed some light how she would be as president? Now this is he, this is exactly what he said. I didn’t laugh. I, I was about to laugh because it was such an absurd, but I didn’t even remember the date at first. And then I said to the reporter, well, I do remember she wanted an inordinate amount of butter on her popcorn.
Is that true or did you just make that up for the reporter?
I made it up because I thought it was such an absurd question he asked. And then I heard nothing on the other end. And then, two days later in the New York Times, they have this little gossip column, I don’t remember. I don’t know that you remember it. During the election, it, it had my quote.
That she had an inordinate amount of…
She, she wanted an inordinate amount of butter on her popcorn. She had been president of her freshman class at Wellesley. I was president of my sophomore class at Dartmouth, and I had apparently suggested, I was very, very shy, you know, and I didn’t wanna ask her for a date but I hear that I had suggested a president summit to see a movie. That was how, that was how.
Secretary Reich, thanks very much.
Thanks very much, Belinda.
Key:
1F 2T 3F 4F 5T 6F 7T 8F 9F
