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Reich Sees Globalization, Technology at Heart of Rich, Poor Gap

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October 21, 2004
Robert Reich
Robert Reich
photo by Stephen Anzaldi

"Most of the time we tend to think about jobs as a matter of domestic policy. "What has President Bush done? What is Sen. Kerry proposing?" former U.S. Secretary of Labor Robert Reich said as he began his Distinguished Public policy Lecture, sponsored by the Institute for Policy Research.

He assured the crowd of more than 100 guests at the Oct. 19 talk that jobs are indeed coming back, although very slowly.

Comparing the business cycle to Newton's law, Reich said everything that goes down, eventually comes up and we eventually will get more jobs.

"But that's not the real jobs problem," he said.

Reich explained that, over the past 25 years, the middle class — especially what used to be called the working class — have fallen deeper into trouble.

"Wages and benefits, adjusted for inflation, have gone nowhere," he said.

Noting a widening gap in both income and wealth between the rich and the poor, he based his talk on two primary factors driving this divergence: globalization and technological change.

Those with good educations and connections enjoy many opportunities and benefits through globalization, such as larger markets for one's skills and innovations, he said. But those without good educations are forced to compete with the millions of people around the world willing to work for a fraction of the price. Manufacturing and insurance claims adjusting are two examples of such jobs.

Regarding technological change, Reich said those with good educations use technology — such as e-mail, data processing and other advanced software products — to leverage their education, expand their productivity and enhance the overall value of their work.

"That same technology," he said, "can undermine the value of your job if it competes with you."

Reich pointed to past service jobs, such as telephone operator, bank teller or service station attendant in making the point that technology itself is supplanting many of what used to be considered fairly good jobs in the U.S.

Before taking questions from the crowd of more than 100 guests, he presented three general long-term answers to solving the jobs problem.

The most significant involved investments in education and better access to a modern brand of post-secondary technical training.

"I'm talking about a mastery of a domain of technical knowledge that enables people to continuously learn on the job," he said. "Technician jobs. Lab technicians, hospital technicians, office technicians. There is a tremendous demand for these people who can install, improve upon and maintain all sorts of machinery. We need them. Those jobs would pay a lot and they could be the new middle class. But we are not training people for these jobs."