Tag Archives: social inequality

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Inequality For All: Robert Reich’s Powerful Message: Not “Trickle Down,” But “Middle Up”

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My Article For Voice Of Russia

The documentary Inequality For All, directed by Jacob Kornbluth, features Robert Reich, former Secretary Of Labor under Bill Clinton, author of Aftershock: The Next Economy and America’s Future, in an impassioned exposé on why the chasm between the rich and the poor has much further reaching implications than a mere income gap.

In and of itself, Reich points out, inequality can be viewed as an inherent part of an incentive-driven capitalist system, but Inequality For All asks when inequality becomes a problem. This question takes on particular urgency when we consider that of all the developed nations, the United States has the greatest degree of wealth disparity. Much like The Corporation, Inequality For All is broad in its scope, and clearly shows the interconnectedness of a number of seemingly disparate phenomena. Filmed in the style of other policy lecture documentaries, Inequality For All uses Reich’s Wealth And Poverty class at UC Berkeley as the platform for some rather hair-raising revelations (a lot of them new even to those very familiar with the Occupy movement’s platform), yet the tone of the film remains optimistic about disrupting this status quo.
Just how consolidated is wealth at the top, you might ask? Put simply, 400 people in the top income bracket earn the same amount as 150 million in the lower tiers. Reich homes in on a recent study by Pikkety and Saez that analyzed tax data dating back to 1913, when the income tax was first instituted. The study finds that 1928 and 2007 were the peak years of income concentration at the top, creating a graph that resembles a suspension bridge. Both years were followed by calamitous market crashes — a parallel that Reich thinks is not random at all. As income got more concentrated at the top, the rich turned to the financial sector for investment, creating a speculative bubble. And as middle class income was stagnating, that in turn created a debt bubble, conditions that inevitably precipitated economic crises.
The crux of Reich’s argument is that what makes an economy stable is a strong middle class. And while his assertion that consumer spending makes up 70% of economic activity is contestable, there can be no denying that the middle class plays an integral role in the economy. The rich alone are not spending enough to generate the requisite level of economic activity. Inequality For All features venture capitalist/1%-er Nick Hanauer who debunks the myth of the rich as “job creators” in favor of a feedback loop theory that Reich also espouses (he calls it the virtuous cycle). If there is one sound bite to emerge from the film, it is that Reich supports “middle up” rather than “trickle down” economics. If the middle class is not doing well enough to create healthy consumer spending levels, then the economy as a whole will suffer—in other words, as the film rightly notes, one doesn’t have to be a bleeding heart liberal to understand that this is not merely a social justice issue. Reich argues that even from a cynical and self-serving perspective, the top 1% should have an interest in how well the middle class is doing as they drive spending in a rather significant way.
Was there an idyllic time that was different from the current abysmal state of affairs? Reich points to the years between 1947 and 1977 as the golden age of great prosperity and very low inequality. What were we doing right then? Public higher education spending was much more of a priority and the proportion of people who were able to receive a college degree without being saddled with mountains of debt was much higher than today. With decimated federal funding for higher education nowadays, little is trickling down to the states, he argues, causing unparalleled spikes in tuition costs. Unions were also very strong, ensuring that worker wages remained robust. With the decline of unions, Reich argues, wages and rights have suffered a crushing blow. Not only have wages remained stagnant, but upward mobility is also equally imperiled. 42% of children born in poverty will never leave poverty behind. No other developed nation, Reich argues, even the UK with its vestiges of a monarchic system, has less social mobility than that.
Inequality For All covers a number of other plucked-from-the-headlines issues thoroughly as well, such as the shockingly low tax rate most of the rich actually pay, and how the tax code has increasingly evolved to the benefit of the haves. It also talks about the impact globalization has had on worker wages and the fact that which countries’ workers add the most value determines what country reaps the benefits. A prime example is that even though iPods are assembled in China, it only earns 3.6% of the value of an iPod, with Germany and Japan taking much more significant portions because the parts come from there.
The ultimate upshot of inequality is that its deleterious effects ripple outward, profoundly disrupting a healthy economic cycle. Reich calls equal opportunity the “the moral foundation stone on which this country and our democracy are built,” and that is not mere exaggeration or partisan-minded alarmism. When money starts to infect politics, as it has done now with lobbyists and PACs, it undermines democracy and paves the way to plutocracy. Inequality For All offers plenty to get outraged over, but Reich remains measured in his rhetoric. Instead of portraying inequality as an “us versus them” zero-sum game, he explains that is in our interest and in our power in to disrupt the status quo by demanding change.
Reporting

The High Cost Of Unpaid Internships

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Unpaid internships have become increasingly common in the current career landscape, becoming almost a requisite milestone in “growing up.”

Couched as an “investment in yourself,” and a place to “make contacts and get a job someday,” they are all too readily accepted as the only available path to full-time employment. Yet, the internships of today are a far cry from the apprenticeships of yore—by some estimates as many as 50% of internships are unpaid. Are they the quid-pro-quo arrangement they are posited as, or simply a front for employers to secure free labor that would otherwise have to be performed by an employee? With internships rife in all branches of the government, they stir up thorny questions about access, equality, and opportunity. A movement against unpaid and exploitative internships has been gaining steam since the economic crisis of 2008 made employment prospects especially bleak, and a number of important legal precedents are now in place. Ultimately, the question is not just whether internships give that extra experiential learning boost for interns’ resumes. The more important question is whether unpaid internships have become yet another playground of “the haves” that perpetuates the status quo of limited social mobility and income inequality.
The unemployment rate of the 16-24 age group today is more than double that of the remaining population, at nearly 20%. The average starting salary today is lower that it was in 2000. Internships have become so coveted in this stagnant climate that they have become a veritable industry—arguably one that lines the pockets of everyone involved but the interns themselves. Colleges charge students thousands in tuition money for the “opportunity” to earn academic credit for internships; a myriad of programs have sprung up promising students insider access to internships (The Washington Center and Washington Semester Program, to name a few). Yes, it is so competitive out there that securing an unpaid internship can be just as difficult, if not more, as securing regular employment.
Ross Perlin’s seminal work Intern Nation: How To Earn Nothing And Learn Very Little In A Brave New Economyoffered one of the most thorough exposes on the issue, shattering the image of the typical intern as a college student and showing the sheer breadth of the intern demographic. A Georgetown law student, 41-year-old Eric Glatt, was one of those “non-traditional” interns, who in seeking to transition to a career in the film industry, worked as an unpaid intern on the set of the movie “Black Swan” in 2010, essentially performing the functions of an accounting clerk . In September 2011, after being referred by Ross Perlin to a lawyer, Glatt sued Fox Searchlight Pictures, asking for compensation for his work. “Obviously, this was not a suit about back pay only. It was a suit to put this culture under the legal microscope and see if it withstood the test in court.” Some of the legal underpinnings of the suits have been the Fair Labor Standards Act of 1938 and the Labor Department’s Fact Sheet 71. In a New York Times article, published on April 10, 2010, Nancy J. Leppink, the acting director of the U.S. Department of Labor’s wage and hour division, said, “If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law.” In essence, Fact Sheet 71 established the six federal legal criteria of what constitutes an internship. Glatt’s case proved that the standard very much holds—the judge ruled in favor of Glatt and his fellow interns, deeming their “intern” work to be labor requiring compensation and allowing the suit to continue as a class action one.
Glatt continues his activist work outside of court as well. He explains that a group he is a part of, Intern Labor Rights, initially began as a grass-roots offshoot from the Occupy movement, and has since grown to be a part of an international coalition with branches in six other countries, including the UK, France, Austria, Switzerland, Netherlands, and Canada. Describing the two main issues the group works on, he states “most organizations did not seem overly concerned with how the practice of unpaid interns fit within the law/legal code, nor did they worry about the ethics and economics of the practice.” In essence, a lot of the work of Intern Labor Rights has been educational in nature—getting the public to see the flaws in a system that embodies and promotes inequalities of opportunity.
The economic impact is significant in some fields where unpaid internships seriously undermine the health of the labor market, especially in what Glatt calls the “cultural production industries,” such as film, music, and journalism. He attributes that to the notion that “thinking labor” is somehow perceived not as “labor” because it is mental and not physical. The implications of unpaid internships being the only “in” in cultural production industries are worrisome—a narrowing in the voices of our future journalists, and thus, the viewpoints we hear. In a study conducted in the UK, Alan Milburn found that 54% of top journalists were privately educated and “the media had become one of the most socially exclusive of professions.”
Unpaid internships are rife in many branches of government and international governing organizations, including the EU, the UN, and others. These positions are coveted because of the prestige and access they might grant. As a commentary on just how stacked the deck is in favor of the employers, the Department Of Justice now has unpaid intern positions for “special assistant US attorneys.” One can easily see why the kind of cache of exclusivity these internships permit and the hypercompetitive arena for landing one of them only serves to perpetuate entrenched social divides. While one could argue that non-profits really do need the help of interns to operate, the same cannot be said for the government or for the private sector.
So, how true are the assumptions of inequality? In a study conducted by Intern Bridge, women are much more likely to be engaged in unpaid internships than men, who prefer to participate in paid internships with for-profit companies. The “liberal arts industries” are much more likely to offer unpaid internships. And “high income students through their preferences, social networks, and status, enjoy more opportunities at the largest companies, are more likely to be paid, and have access to a limited number of opportunities in organizations their peers compete fiercely to enter.” Almost ¾ of interns report holding a second part-time job to support themselves while on internships.
While the challenges faced by unpaid interns are formidable, the movement to correct employers’ abuses is picking up tremendous momentum, both through legal filings and grassroots activism. The arts and labor working group of Occupy Wall Street demanded that the New York Foundation for the Arts stop advertising unpaid internships. Designer Alexander McQueen ignited a controversy for advertising a full-time, unpaid internship. And groups like The Fair Pay Campaign, Make Youth A Priority, and The Campaign for America’s Future are at the frontlines of this long overdue battle.