DENVER – Standing 4 feet 11 inches, Robert Reich knows something about inequality.
And as a former secretary of Labor and one of the country’s leading liberal economists, he knows how economic statistics can be misleading.
So he’s skeptical of claims that average incomes are rising thanks to the expanding economy.
“Shaquille O’Neal, the basketball player, and I have an average height of 6 foot 1,” Reich said Friday at a speech sponsored by the Colorado Fiscal Institute, a left-leaning group.
The gap between the richest Americans and everyone else is widening, and Reich blames this fact on the slowness of the recovery and the economy’s failure to produce jobs.
“Median household incomes have been trending downward. They’re now almost 5 percent below what they were at the start of the so-called recovery,” Reich said.
“Wow,” someone in the crowd muttered.
“You’re right. Wow,” Reich said.
He took pains to say he did not want to vilify the rich. But the richest people tend to save more of their money than the poor or middle class. Much of the money earned by the rich does not get recycled back into the economy, where it would lead to greater consumer demand and more jobs, Reich argued.
He traces the stagnation of middle-class wages back to the late 1970s – a time that coincides with popular revolts against tax increases.
When people feel the shrinking power of their paychecks, they’re probably not going to support a tax increase for any cause, he said.
Reich did not mention Colorado’s failed Amendment 66, which sought increased taxes for schools, but he essentially used liberal terminology to agree with the conservative argument against Amendment 66 – that people feel too insecure in their household budgets to vote for a tax increase.
The former secretary of Labor for President Bill Clinton is promoting a new movie, “Inequality For All,” in the hopes of helping to inspire a mass movement that could improve the economy for everyone: rich, middle class and poor.
Reich said he’s optimistic that people are starting to pay attention to inequality, from President Barack Obama to Pope Francis to fast food, and Walmart workers who have begun staging strikes. The United States has worked through periods of inequality throughout its history.
“When we understand the nature of a problem, we put ideology aside, we roll up our sleeves, and we do what’s needed to be done. And we’re going to do it again,” Reich said.
jhanel@durangoherald.com
