In his first visit to the College since leaving President Clinton's Cabinet, former Labor Secretary Robert Reich '68 decried the fate of what he called America's "little guy" in a speech to a standing-room only crowd in Alumni Hall on Saturday night.
Reich, currently a professor at Brandeis University and the author of seven books, spoke warmly about Dartmouth and kept the audience interested by recounting personal anecdotes and answering questions posed by the audience in his address, titled "The Future of Work."
He was optimistic about the future of the American economy, but also referred to the problems smoldering beneath the current trends of high job growth, low unemployment and low inflation.
Despite the flourishing economy, Reich said, the bottom half of the American population, the "little guy," is still worse off than in 1989.
The bottom half of the workforce has not seen wage growth, the median wage has stayed stagnant and benefits in health care and pensions have been declining, according to Reich.
At the same time, the "little guy," swept away by the near-euphoria about the booming economy and expecting to take part in the economic miracle, continues to buy more and plunge deeper and deeper into debt, the former Labor Secretary said.
Reich cited two reasons lying at the root of this economic polarization -- globalization and technological change.
"Globalization," he said, "is good for the economy, but not for every one of us." Intense global competition offers employers in need of workers for low-skill jobs "more people who can do it for less," Reich explained, while improved technology renders low-skilled workers redundant, and employers pay them less than they used to earn for the same work.
Reich said these forces are ripping apart the workforce, and that "there is no obvious villain, no magic wand, no easy remedy."
And while those at the bottom continue to slide deeper into despair, Reich said, life is improving for those with the right education, the right skills, and most importantly, the right connections.
"Education," he said, offering a solution, "is the key." Only education, he said, could lessen the disparity between the rich and the poor, and therefore it must become America's top priority.
He stressed the importance of intellectual stimulation in young children, explaining that child care is an emergency situation for millions of working people who can neither stay at home nor afford child care.
Reich emphasized that the current "good times" are masking the long-term educational problems, and said that since the heat on these problems is only being turned up very gradually, America is not yet aware of the imperative necessity for change in education and child care.
He proposed several solutions to the economic polarization, such as providing employers with tax incentives to hire workers, or government encouragement for employers to train their own workers.
In addition, he suggested a $1500 per-year tax credit for people seeking higher education and stressed the importance of the individual as well as the necessity for continuous education.
"The responsibility of society," he added, "is to make it easy to engage in life-long learning."
As an example, he spoke about a Detroit project which aims to provide high-school dropouts and gang members in impoverished urban areas with skills that will enable them to avoid the quagmire of low-service jobs that face intense global competition.
The right approach to global competition, he said, is not to block trade but to educate job-seekers as to "where and with whom the jobs are."
"It can be done," he added. "Job training done the right way works very, very well."
Though reluctant to offer broad-based solutions, Reich suggested cutting the military budget to let the money flow into child care and educational expenses.
He also proposed an earned-income tax credit, which he called "the most important anti-poverty policy we have in this country right now." He said changing the payroll tax was a suggestion "worth looking at."
Reich compared the U.S. to Europe -- itself currently going through somewhat of an identity crisis -- asking if it was necessary for an advanced industrial country to choose between either a cohesive but rigid society with a stagnant economy or a booming economy and rising job creation, but widening inequality.
In this respect, he said, the U.S. and Europe are mirror images of each other. "Is there a third way," he asked, "that both generates jobs and promotes equality?"
Now, in peace and prosperity, he said, we can find that third way, once we realize that education lies at its core.
Reich's visit was co-sponsored by the Class of 1935 and the Nelson A. Rockefeller Center.
