The Apocrypha of Reich

Robert Reich is an irritation in the world of Socioeconomics. While I do not disagree with his latest 5-year rant on income inequality, what he often fails to mention is that he personally helped create the problem.

Dr. Reich was Bill Clinton’s Labor Secretary and Economic advisor. His biggest claims to fame are three things: The Family Medical Leave Act (FMLA), the School-to-work program, and one raise in the minimum wage. FMLA was an utter disappointment in comparison to the rest of the world. The United States remains the only country in the OECD that does not provide PAID leave for family medical leave.

Also while Reich was in the labor department, and Clinton in the white house, we saw the biggest increase in the Gini Coefficient (measuring income inequality) in modern U.S. History – surpassing even the Great Recession of 2008:

Gini

Reich is also notorious for his rants on supporting unions, which I generally agree with. Yet during his tenure in the labor department in the 1990s, we saw union membership decline to its lowest level since 1935:

Union_membership_in_us_1930-2010

Source: Community Population Survey 2012, U.S. Census Bureau

I’ll leave my issues with Dr. Reich’s former boss, Bill Clinton for another time, even though I voted for Clinton; twice. His deregulation of Oligopolies disappointed me.

To be sure, the school-to-work program was designed to give high school students trade skills to enter the workforce. Why? Because not enough kids were going to college after high school. The STW program was basically an extension of the JTPA program of the 1980s. JTPA was a dismal failure, and so was STW. No where in there was the idea of making higher education affordable, or enticing kids to go to college.

I certainly don’t blame a guy for having regrets about past policies that they supported, which turned out really, really bad. I have respect for NAFTA’s creator, Brad Delong, who has realized that NAFTA had a really, really bad outcome for labor. However, Dr. Reich has yet to address, in any of his epic apocryphal speeches, how he helped create lower union rates, a trillion dollars of student loan debt, and spent $300 million on a jobs program that went no where. His data analysis is good. His policy idea are, well, apocryphal.

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This entry was posted in Labor, Politics, Poverty, Public Policy, Socioeconomics. Bookmark the permalink.

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