In Conversation with Professor Robert Reich

In this episode we interview Robert B. Reich, Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. He served as Secretary of Labor in the Clinton administration, for which Time Magazine named him on of the ten most effective cabinet secretaries of the twentieth century. He has written fifteen books, is also a founding editor of the American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Scieces, and co-creator of the award-winning documentary, "Inequality for All." More recently he's co-creator of the Netflix origional documentary "Saving Capitalism" which is streaming now and author of the nnewly released "The SYSTEM: Who Rigged It, How to Fix It" which is available via Penguin Random House or your independent bookseller. Professor Reich in this interview shares hard facts, learnings from his experience, and inspiration to help shape our future for the better.

 

Show Transcript

Christopher Tkaczyk:

Welcome to Better, by Great Place to Work®. We're coming to you from the 2020 Great Place to Work For All Summit in San Francisco.

We're joined today by professor Robert Reich, who's the Chancellor's Professor of Public Policy at the University of California Berkeley. Welcome, professor.

Robert Reich:

Thank you Christopher.

Christopher Tkaczyk:

Professor Reich had also served as Secretary of Labor in the Clinton Administration and has written 18 books. The next one is coming out in a few weeks. It's called The System and what's the, I'm sorry, the subtitle?

Robert Reich:

Oh, the subtitle is Who Rigged It And How We Fix It.

Christopher Tkaczyk:

Rigged what?

Robert Reich:

The system.

Christopher Tkaczyk:

The system. Excellent, so you're going to cover everything, politics, the economy.

Robert Reich:

Well, you can't cover politics without covering economics, you can't cover economics without covering law and the workplace and business and a lot of other things.

It's a short book, believe it or not, but it does attempt to provide a very different view, a very different framework for people about what has happened and why and where the future is heading.

Christopher Tkaczyk:

Oh, interesting. I can't wait to read it.

Now among the many books that you've written, one of the most recent ones is The Common Good, for which you run a blog and you provide commentary on what's going on in the world and politics and the administration and whatnot.

How did we get to the point where we have a demagogue as the president?

Robert Reich:

Well, that's a very, very, very big question.

I think that for 40 years the median wage has not increased — adjusted for inflation, that is . And so when you have wages stagnant for that long a time and simultaneously jobs have become less and less stable and less secure, people get very anxious, they get very worried. And that creates a climate that is ripe for demagogues on the left or the right were wherever coming along and channeling that anxiety into anger toward various groups.

This is not the first time in history — I mean, certainly in the 1930s we saw it around the world — but it all starts with economics.

Christopher Tkaczyk:

So what can be done now to save our world?

Robert Reich:

Another very large question.

Christopher Tkaczyk:

You are the kind of man that answers large questions. Nobody would ask me these questions.

Robert Reich:

Well, I think that for the first step is for people to understand what the real challenge is.

It's very easy for people to fall for demagogic kind of ploys either blaming Muslims or minority groups or blaming elites or blaming whoever there is to blame. This really has got to be understood as a systemic set of problems, which is why I wrote the book The System.

They're not villains, everybody is — I mean there are certain bad players, but there always have been bad players — but everybody is essentially playing the game according to the rules as they understand the game. The problem is the rules have been altered.

If we were in American society, for example, 50 years ago, as companies became wealthier, as they did better and better, their workers would all get a larger and larger share of the benefits, workers would do better as companies did better. That was the unwritten law of the economy, and as the economy expanded between 1945 and 1985, most workers saw their wages steadily growing and their children did better and better. I mean, that was The American Dream and that's what we have lost.

Starting really around the early 1980s companies changed in some very, very profound ways. It was no longer a matter of “stakeholder capitalism” in which all stakeholders, including workers, benefited when companies did better, it was now “shareholder capitalism” in which shareholders did better, but nobody else did.

Christopher Tkaczyk:

One of the biggest problems that we have as a company at Great Place to Work is, when we're explaining why someone should care more about taking care of their people, their workers, their employees, and tying that to the business imperative, showing that those who actually take care of their employees are going to succeed and do better both in the market and just making money.

What do you tell people if you're talking with say a business leader or a CEO and they're curious about what they should be doing, what they should be focusing on in terms of working in succeeding in the system that we have, what part of those conversations do you ever include talking about making sure that they're focusing on their people?

Robert Reich:

Well, in my conversation with CEOs over the years, I find that they are very, very quick to use all of the correct language and correct phraseology: “my people, my workers are the most important things, I could not run my company and make a profit if I didn't have totally committed workers, if I didn't treat them well,” all of that stuff. But it's verbiage. When it comes right down to it, companies are still focused on shrinking their payrolls or controlling payroll costs.

Payrolls are about almost 70% of the costs of most businesses and so the easiest thing to do to show increases in profits is to cut jobs, cut payrolls, outsource, substitute automation or technology for workers. It's hard to do that and make workers feel that they are valued and trusted and that they are part of a common goal. It's tricky and it may be impossible.

Christopher Tkaczyk:

This summit that you're here for today, it's filled with lots of leaders who have already accepted the mission of achieving that because they know that trust is the basis of creating a great workplace. And so when we talk with a lot of the folks who attend our summit every year, they always say that they feel inspired, we can see that there's actually business leaders who are walking the talk.

What do you think is the biggest thing standing in the way today for business and leaders within business who are not walking the talk or at least don't understand that trust is the most important thing to build a foundation for our future?

Robert Reich:

I think the stock market.

The demands of the market for quarterly performance makes it very difficult for even business leaders who know what the right thing to do is to do it, because they've got stock analysts breathing down their necks. They have to do things that they might not otherwise think are in the long term interest of the company or the stakeholders, but they feel like they've got to satisfy the analysts.

Christopher Tkaczyk:

Yeah. So the research report that Great Place to Work just came out with a few weeks ago in which we talk about how companies can weather the storm during a recession better than others when they do focus on culture and focus on their people — does that sound like something that would be true from any research that you've seen looking through the markets and the cyclical nature of markets?

Robert Reich:

Quite honestly, Christopher, I'd like to believe that it was true, and I've looked for that research justification for years and years and years. That was the case between, as I suggested, early between the end of the Second World War and the early 1980s.

But since then, when markets are going down, when the economy is shrinking, companies, they may do everything they can do, and I think this is fair to say, to keep their core workers, but they will cut as fast as they can in terms of payrolls. They will start with their contractors and their outsourced workers, they certainly will cut their supply chains if they have to, then they will start cutting if they have to, they will start cutting their payrolls.

And I can't blame them. This is not a matter of vilifying anybody, this is a matter of just being very, very clear and practical about what it is that companies feel they have to do in order to maintain their profits or minimize their losses in periods of economic decline or periods where there is a recession coming.

I mean, it looks like we're facing a recession right now — I think that's reasonable — and so we'll know a lot more. This recession that we are just about to see if it is a recession is probably going to be quite different from the Great Recession of the 2008, 2009 period of time.

That was a demand-side recession because people got scared, they didn't have the money, everybody started to because they were worried that they would not have money, would not have jobs, a classic kind of recession.

This recession, if we do have a recession now because of the coronavirus and related structural problems, is going to be much harder to deal with, because it is less susceptible to the solution of fiscal and monetary policy.

Christopher Tkaczyk:

As somebody who is constantly around young people and educating them, what do you think is the most hopeful thing about the youngest generation of adult, voting adults, voting-age adults?

Robert Reich:

Well, first of all, they're much better informed. I've been teaching for 40 years and I have a fairly good comparative sense of where the previous generation of students was versus this generation students. They're better informed, they're more committed to seeing the world a better place, they're more internationally oriented, they are more motivated.

10 years ago they were mostly motivated by money. They're less motivated by money. Now they do have student loans and they have student loan debt and they're worried about that, but they are more motivated by a desire to fix what is broken in the system in the world.

Christopher Tkaczyk:

Why has that focus on money changed, do you think?

Robert Reich:

I think it's because they've seen that their older siblings or even their parents have not found that money alone has made their lives better. In fact, if anything, a singular focus on money has made their lives worse.

If you're not doing something you like and you care about, if you're not in a job that gives you a lot of satisfaction in many ways other than monetary, you're going to be spending your life in a very unhappy way.

For some reason, and I am not enough of a sociologist to understand exactly why, but today's students seem to have got that in ways that the previous generation did not.

Christopher Tkaczyk:

I also see that there's far less activism being done by the younger generation in the way that it has over the past 40 years, 50 years, and there is social activism through social media obviously and fundraising, which is a good platform for it, but beyond the technology aspect of it, why do you think there's less activism these days?

Robert Reich:

I think that young people today may be more cynical about activism per se, if it's defined as “getting out on the streets and making a ruckus.” Here again, they may have seen that their parents or their older sibs tried it and it didn't go very far.

But I am struck over and over again by young people today using, as you said, social media or making films or videos or getting involved in a whole range of ways of communicating and connecting up with others. And so the net result may be much more solid and durable than the kind of demonstrations we had even 20 years ago.

Christopher Tkaczyk:

The past year has been kind of a roller coaster when you look at this beginning part of the election cycle with Democratic primaries, et cetera, but also looking at what's been going on with Trump and how it feels that today he can get away with whatever he wants to because he's not being held accountable for anything.

What has been the one day that made you the most mad over the past year?

Robert Reich:

I've been mad for the last three years.

Christopher Tkaczyk:

The last three years, right. But the one day that just, you feel like your head was going to explode.

Robert Reich:

Well, I suppose it was when the Mueller report was distorted by the Attorney General, because that to me is not only a violation of his responsibility, but it means the American public is not getting the information that the public in a democracy needs.

My deeper concern, and again, we can talk about Donald Trump and I don't want anybody who's listening to this to think that this is a partisan broadcast, because really it's not.

Christopher Tkaczyk:

It's not. It's a business podcast.

Robert Reich:

What I am concerned about most is democracy and as Louis Brandeis, the great jurist said toward the end of the first time that America had a huge concentration of income and wealth at the top that corrupted the entire system, Louis Brandeis said, "We can have great wealth in the hands of a few or we can have a democracy, but we can't have both.”

And in this second Gilded Age that we are now in — of which I think Donald Trump is a symptom, a consequence, rather than the source and reason for — democracy is being sacrificed in a very, very big way. It's not just because of big money in politics, it's also because of the ways in which big money is disregarding and disrespecting democratic institutions.

Christopher Tkaczyk:

When we're looking at and dissecting all of these economic plans and pitches for Medicare For All, what of the things that have been presented so far as part of these campaigns, which of them look like they're actually doable, that we can actually make it happen?

Robert Reich:

Well, I think any of them are doable. I mean, if you had asked me before 2016 and Bernie Sanders campaign, whether Medicare For All was even remotely possible, I would say no. But the poll show that right now 60 to 70% of Americans actually would like Medicare For All.

Public opinion on these issues is volatile. On healthcare, it is clearly going in one direction and that is toward a public understanding that we have the most inefficient and costly healthcare system in the world and we also have the worst health outcomes of any advanced country. You put those two together and people obviously if they think about it at all, are going to say what we've got to do something quite bold Medicare for all is I think the next thing we need to do. How we get there from the Affordable Care Act is not all that clear.

I could spend a lot of time right now and have a lot of people's eyes and ears glaze over, but I think that's our challenge.

Christopher Tkaczyk:

When we are talking with business leaders about some of the biggest problems they're seeing when it comes to staffing and recruiting and finding enough people to fill all these different diverse buckets, looking at diversity and inclusion, we often hear that there's not enough talent from those different demographics in their particular industry.

When you're looking at the population in the US and looking at education and whatnot, why do you think certain industries are making up that excuse that the talent's not there? Or do you not agree with that?

Robert Reich:

I don't agree with that. I see — and this is not just at Berkeley and Harvard and Brandeis and other places I've taught, this is because I go around, I visit and I give lectures at various places around the country — I see an extraordinarily talented generation. I see a lot of talented young people who can't afford college to begin with and they are very, very talented.

I don't think there's any shortage of talent, I think there's a shortage of systems for getting those people situated in exactly where they ought to be situated in our corporate culture. I think there are very outmoded ways of recruiting, very outmoded ways of thinking about placement and a very backwards system of workplace training.

Christopher Tkaczyk:

Over the course of your very long career, you've had an opportunity to work with many different presidents. In that time, can you think of one day of your working life that you could recall was the best day at work for you?

Robert Reich:

I've had a lot of good days. Maybe the best day was in 1995 when, although everybody said to me it was impossible, there was no way to raise the minimum wage. The Republicans were against it, they had control over both the house and the Senate. Bill Clinton, although he was for it didn't want to put very much of his political capital behind it and so I worked very, very hard and we did get the first raise in the minimum wage in many, many years.

Coming back to the Labor Department after getting that vote and having thousands of Labor Department employees waiting for me and cheering and knowing that something on the order of 50 million people just got a raise, that was a pretty good feeling.

Christopher Tkaczyk:

I was one of them. I was working as a stock boy in a grocery store. It was my senior year of high school. So I remember when that happened.

Robert Reich:

Well, I remember you working there and I was very pleased to get you a minimum wage increase too.

Christopher Tkaczyk:

Thank you. And the rest of America thanks you too.

In the time that you spent with the Clintons working as Secretary of Labor, and of course this role being an advisor to President Obama those two periods of leadership, what was the most inspiring thing that you saw both of them do that you felt was creating this wave of change across the US both socially and politically?

One thing that I can think of is just when Obama was elected president, I met with Valerie Jarrett yesterday and I told her about how I had attended the first Obama inauguration and how there was just this swelling of emotion in Washington DC and there was just this happiness in the air. 

They're both inspiring leaders, but in different ways and for different reasons. Personally, how do they inspire you?

Robert Reich:

Well, Bill Clinton I think was inspiring because he was the first of a new generation. He was in his early 40s, we hadn't had a president in his early 40s since John F. Kennedy. He and Hillary at that time did represent a passing of the torch to a new generation, very similar to the way it felt in 1960-61 when John F. Kennedy became president.

Barack Obama I think the sense of inspiration came from the fact that he was a black man. And it always seemed to me that it was impossible for a black man to be elected president, at least in my lifetime. The racism and the hatefulness was so entrenched, the bigotry was so thick that there was no way you could elect a black man or a black woman.

Christopher Tkaczyk:

And still a lot of American feels the same way about having a gay president too.

Robert Reich:

Or having a woman president. And yet there he was, Barack Obama was elected.

I remember I was in Chicago the morning after the election returns came in, he was there and he came into this room and there were about eight of us waiting for him. He went around and he shook each of our hands and everybody congratulated him and it came to my turn and I was prepared to say, “Congratulations Mr. President-elect," or something official-sounding, and I just broke down in tears because it was such an emotional, powerful moment. It just seemed that the nation had done something that I thought the nation was incapable of achieving.

Christopher Tkaczyk:

It was a very, very emotional moment for everybody I think. You're about to go on the main stage here at our summit and I was hoping that you could give us a bit of a sneak preview about what you're going to be discussing. I'll be directing our listeners to go to our website where they will be able to later find a video of your speech.

Robert Reich:

Well, I'm going to be talking about frontline workers, people who are almost invisible in most companies, hourly workers. They are on the front lines in the sense that they're the ones who are dealing directly with consumers and also dealing with machinery or technology.

They're often thought to be very fungible by companies, replaceable. But there are sources of enormous value and I will talk about them.

They're the ones who for the last 40 years have not had a wage increase and they're the ones who, most of them do not have college educations. They're the ones who are politically volatile and angry.

I'm not going to get into politics, but maybe I will if the mood strikes me.

Christopher Tkaczyk:

I hope you do. I know I find you to be very a very inspiring speaker and as I told you earlier, you're very active on social media and have a great Facebook page with lots of wonderful videos that are informative but also entertaining too.

Robert Reich:

Thank you, Christopher.

Christopher Tkaczyk:

And I appreciate you as an inspirational educator and leader and that you really explained very complex subjects in a very clear way that helps the rest of us understand them.

Robert Reich:

Well. I really do think that's important. I mean, if the public doesn't understand something, it's impossible to be an effective citizen in a democracy.

Christopher Tkaczyk:

Yeah. Thank you very much for your time today.

Robert Reich:

Well, thank you.

Christopher Tkaczyk:

And good luck with the speech.

Robert Reich:

Thank you.