Robert Reich
Recent Articles
Learning a Hard Lesson about Company Stock Plans
Robert ReichDec 13, 2001Broadcast December 6, 2001 For years now, many management gurus have been urging companies to give their employees a larger share of the profits. The thinking was that workers who invested in their own company would work harder because there'd be a direct connection between effort and reward. This idea came just at a time when many companies were ending the old-fashioned kind of pension plan that guaranteed employees a certain fixed amount of money every month after retirement. Companies replaced those plans with 401(k) retirement accounts. Instead of a specific pension, employees, and sometimes employers, now invest a certain amount every month tax-deferred. After retirement, employees live off the cumulative investment. Combine the two ideas--workers getting a share in the profits of their own companies and 401(k) retirement accounts--and you have more and more workers investing a portion of their paychecks in 401(k) retirement plans featuring their own company's stock. Well, this...
Trading Insecurities
Robert ReichDec 10, 2001Financial Times Americans are turning against free trade. To halt the protectionist tide, government must minimise the hardship and dislocation caused by foreign competition. In a recent poll, 58 per cent of Americans agreed with the statement that foreign trade was "bad for the US economy because cheap imports hurt wages". Only 32 per cent agreed with the statement that trade was "good for the US economy; it creates foreign demand, economic growth, and jobs". What is particularly striking is that these anti-trade sentiments are being heard at a time when the US economy is doing so well. Unemployment is lower than it has been in 30 years. People at the bottom of the wage ladder are beginning to see wage gains, for the first time in several decades. If free trade inspires this much antipathy now, when the economy is surging, what will happen when the economy slows, as it inevitably will? Alan Greenspan, chairman of the Federal Reserve Board, spoke with uncharacteristic clarity on the...
To Lift All Boats
Robert ReichDec 10, 2001The Washington Post Suddenly, there's a new conversation among the country's movers and shakers, and several ambitious plans for helping the bottom half share in the nation's prosperity: Give them, literally, a share in America. Spread capitalism by spreading capital. Consider President Clinton's proposed "Universal Savings Accounts." Families earning less than $40,000 would get an annual $600 tax credit deposited directly into their USA account, plus another $700 if they deposited $700 of their own money into the account. That adds up to an annual nest egg of $2,000. If they continue doing the same thing for 40 years, assuming a modest 5 percent rate of return on their savings, their nest egg would grow into a brontosaurus egg of more than $250,000. That would give most families a big boost for retirement. Make no mistake. The effect of this plan would be to redistribute capital assets to lower-income families. Higher-income families would get a much smaller federal contribution...
Help the World Connect
Robert ReichDec 10, 2001The Wall Street Journal If you want to make a dent in the real problems of poor people around the world, don't fund another panel of experts to do a major report on global hunger, overpopulation, global poverty, global illiteracy, child labor or ethnic strife. Don't create a program, institute or project staffed by earnest young political scientists and economics postdocs. Don't convene a forum of leading thinkers, CEOs, journalists, and statesmen at a conference center in Aspen, Jackson Hole, Vale, Davos, Geneva or any other beautiful locale. This has all been done, sometimes usefully, but it's not what's most needed now. Instead, work from the bottom up. Do the 21st-century equivalent of what Andrew Carnegie did a century ago: Build public libraries for the world's digital have-nots. I don't mean giant marble-edificed, intimidating Greek-columned places downtown, housing millions of tomes. I mean small, quiet, safe, pocket-sized places in poor neighborhoods and communities like...
