Introduction
Robert Reich is a well-known economist and researcher who focuses on studying material inequality in the United States. A 2013 documentary film, Inequality for All, based on Reich’s book, as well as a post-release forum, discusses important issues of the underclass, income inequality, poverty, and unfair income distribution. The central theme of Reich’s research, speech, and documentary is finding the relationship between formal economic growth and the deterioration of the material situation of the population.
Summary and Key Points
The documentary film was a way to state Reich’s position on the issue of income inequality. The film features interviews with two successful investors who support Reich’s position that the country’s economy should suit all citizens, even those from the underclass (Kornbluth, 2013). To visualize the problem, the film shows middle-class people barely surviving on their paychecks (Kornbluth, 2013).
Inequality, according to Reich, is an essential incentive for the development of the economy, while the current state of affairs is contrary to the principles of democracy (Commonwealth Club of California, 2013, 00:03:40-00:11:20). Reich criticizes the notion that the most profitable employers contribute significantly to the economy, as the American system is fueled by consumer spending (Kornbluth, 2013). The ideal economic conditions are when the state invests in education, and workers receive high wages. The current state of economic affairs is unsatisfactory; Reich’s speech and film seek to draw attention to this problem.
Statistics and Data
Reich relies on statistics to graphically demonstrate growing income inequality. Reich demonstrates the cyclical nature of the American economy, showing prosperity in 1928 and 2007, preceding major economic crises (Kornbluth, 2013). One cannot rely on formal measures of production and income success, as they do not reflect the situation of the majority of the population.
The statistics on the distribution of material resources present a depressing picture: the 400 wealthiest Americans own more money than the 150 million people from the lower strata (Kornbluth, 2013). More than 40% of Americans who were born into poor families cannot get out of poverty during their lifetime (Kornbluth, 2013). Demonstrating clear statistics, Reich emphasizes the low probability of a horizontal exit from poverty and the country’s unfair income distribution.
The Suspended Bridge Analogy
Reich presents a suspension bridge analogy to analyze the cyclical nature of the American economy. The economy experiences ups and downs in a pattern similar to the supporting structures of a bridge. Reich shows a graph of how the concentration of wealth in the hands of a minority peaked in 2007, which could be one of the prerequisites for a severe economic crisis (Kornbluth, 2013). The analogy implies that the concentration of wealth has come at the expense of the exploitation of the middle class, which invariably leads to the economic system’s failure.
Labor Unions
Reich proposes to increase the influence and the number of labor unions. His significant argument is that it is not difficult to create a labor union and join an existing one (Commonwealth Club of California, 2013, 00:46:30-00:47:40). The mid-1950s, which are associated with the strengthening of labor unions, are also characterized by the achievement of greater wage equality (Robert Reich, 2019, 00:00:30).
Unions expand the middle class, making it more represented and noticed. The association of large groups of people is a means of equalizing the growth of wages with the progression of the economy. Labor unions are also an outlet for narrowing the gap between corporate and worker power. Consolidation is a way to achieve economic balance and protect the middle class in a digital age with rapidly changing working conditions.
Importance of Education
Reich considers another essential way to reduce the income gap: to improve the quality and accessibility of education. For children from families forced to fight poverty, education is the only way to reach a different social and material status. The state needs to increase spending on supporting education since tax revenues from people with low incomes are not enough to provide equal educational services (Kornbluth, 2013).
Education is a way to get a high-paying job and to invest more in supporting the economy with taxes and consumer spending. The more people get a quality education, the more the US economy will prosper. Thus, education is essential for achieving equality and stable economic development.
Conclusion
Reich raises public and government awareness of the importance of taking action to reduce income inequality. With illustrative examples, the economist concludes that the concentration of wealth in the hands of a wealthy minority is one of the prerequisites for economic crises. To change the situation on the part of the workers, Reich proposes to enter labor unions, the purpose of which is to protect working conditions and ensure a normal wage. The state, in turn, should invest in increasing the availability of education so that more people can subsequently get qualified jobs and get out of poverty.
References
Commonwealth Club of California. (2013). Robert Reich: Inequality for all (11/20/13)[Video]. YouTube. Web.
Kornbluth, J. (2013). Inequality for all [Film]. 72 Productions.
Robert Reich. (2019). Why unions matter to you [Video]. YouTube.