Speech before the Los Angeles World Affairs Council on February 21, 2001:  

Robert Reich
Former U. S. Secretary of Labor
and author, The Future of Success

“The Future of Success”

 Al [Carnesale], thank you so much for that introduction.  When Bill Clinton came to me with the chicken soup, you should know he did not say, “I feel your pain.”  That came much later.

  Politics.  “Politics” comes from the Greek root “poly” meaning “many” and “tic:” small blood-sucking insects.  I do not mean that—I really don’t mean that, and I enjoyed and loved my job as Secretary of Labor so much that it led me to forget the rest of my life—my family--and I discovered about four years into my job that I was not seeing anything of my family.  The real wakeup call I got was after about five nights of promising my two teenage boys that I would get home to tuck them in and say goodnight to them—early teenagers, young teenagers—I was not getting home at all and I called and Sam, the younger of my two boys, answered the phone.  I said, “Sam, I’m sorry I can’t get home tonight,” and he said, “Dad, will you please at least wake me up when you come home?”  But I said, “Don’t be silly.  It will be very late.  The President has called a meeting.  I’ll see you in the morning.  It’s a school day.  Don’t wait up for me,” and he said, “Dad, please.  I just want to know you’re here with us.”

  Well, I can’t tell you exactly what happened to me at the moment, but it really was as if a little dagger was shot at my heart, and although it sounds very hokey and corny it was a turning point because I realized that I did have to go home.  I did have to leave the best job that I’d ever had and probably ever will have and I came home.

  I got a lot of letters, a lot of e-mails, a lot of people were quite critical of my decision.  A number of people, for example, said “It’s fine for you.  You can afford to get another job that will pay enough for you to see more of your family, but what about me?  I don’t have that option.  I have to work sixteen or seventeen or eighteen hours if I’m going to maintain my living standards for my family to make ends meet.”  And a number of professional women particularly wrote me, e-mailed me, some of them called me, and they said, “Well, you know you’re sending exactly the wrong signal.  You, Secretary of Labor, you are sending a signal that the only way to be a decent parent is to get off the fast track, and we have been struggling for years to send exactly the opposite signal: that it is possible to be on the fast track and also have a family and be a good parent.”  And some people wrote me and said, “Look, don’t feel so proud of yourself.  You left a very valuable, very important position. We needed you there and you’re being a little bit self-indulgent.”

  Well, I wrote back to as many of these people as I could and I said, “Look, I did not intend to send a signal.  I simply intended to do what I had to do for me personally.”  I went home and I got back to my family and my wife and my two kids and I said, “I’m home!  I’m home!”  And they said, “Well, that’s great.  We have a lot of things to do.”  The boys said, “Well, you know, Dad, if you’d like to see us just stand in line and we’ll certainly make some time for you.”  You know teenage boys.  I don’t know how many of you have had teenage boys, I know nothing about teenage girls, but teenage boys are like clam shells.  They really are exactly like clam shells.  They are tightly shut and occasionally, just occasionally, when you least expect it, those clam shells open and you see inside this very soft and beautiful and very vulnerable interior.  Then the clam shell shuts tight again and you don’t see it and you don’t know when, if ever, it will open.  But it will open at a very unexpected time and in a very unexpected way, and if you’re not there when it opens you might as well be on the moon. At the very least I was there for those little clam shells over the last four years and I wouldn’t have missed it for the world.

  But the experience did get me thinking, not only the experience of leaving that job and making that very difficult decision, which after I made it was extraordinarily hard.  I tell you, one way you know you’re no longer in the President’s Cabinet is when you get in the back seat of your car and there’s nobody in the front seat.  It is difficult to make these transitions, and I did have some regrets, but the experience, and not only the experience of moving from that very fast track back home, but also the letters and the e-mails got me thinking and led me to do a great deal of research and interviews about a problem, a paradox, of our modern economy.  And that paradox is simply this: last year, in the year 2000, the average middle income couple with children worked a total of, if you add up all of their extra hours of work, a total of seven weeks more than they worked in l990--and this trend continues.  Actually, in 1990 they were working more than they worked in 1980.  It transcends the business cycle.

  We are working harder and there is also greater stress on middle-income people and lower income people, but also on upper income people.  We are finding, in fact, now when you have two income earners sociologists have a new term for it –DINS, have you heard that?  Double Income, No Sex.   And as I traveled around the country, both as Secretary of Labor and also doing interviews, carrying on a kind of free-floating focus group researching this book, discovered that there is a paradox, a paradox having to do with the fact that we are much wealthier than we were as a society, as an economy, ten or fifteen years ago. Not everyone is wealthier, but overall our material benefits are much, much greater.  Our productivity is much, much higher.  Remember, in the 1970s, 1980s productivity improvements per year were almost nothing.  Productivity has generated a much larger economic pie—and yet we are working harder.

  The famous British economist, John Maynard Keans in 1930, in the depth of the Depression, predicted that if the British economy continued to grow as it was then growing (remember this is in the depths of the Depression that he was making a prediction about productivity), he said if productivity continued to gain as he thought it would gain over the next hundred years, by the year 2030 the average British citizen would only have to work 15 hours a week.  Well, we don’t know what is going to happen in 2030 and this is a different continent, but chances are very low that the average British citizen, or the average American, will only be working 15 hours a week.  If the trend continues, and it’s hard to conceive of the present trend not continuing, people will be working harder and harder. 

  How do we explain this paradox?  How do we understand this paradox of harder and harder work?  And I’m not even talking about the longer commutes or all of the travel that many, many professionals are putting in and I’m not even talking about the intrusions of technology.  Remember technology was supposed to make our lives easier and also provide us with greater leisure?  Well, I can tell you that the beepers and the cell phones and the e-mails and all of the other intrusions are not necessarily making our lives easier.  People are working harder and longer at home, but that seven-week figure that I gave you a moment ago does not even include all of that extra.  It’s still seven weeks more than ten years ago. 

  Well, one of the issues and one of the problems, one of the explanations has to do with the fact that in this new economy it is harder and harder for people to predict what they will be earning from year to year and very often from month to month.  Because everything is so unpredictable, because consumers and investors can so easily switch to something better, it means that all of us as producers, as employees, have to hustle harder to attract and keep consumers and investors and that means that we cannot be sure what we’re going to earn, and that in turn means that we’ve got to make hay while the sun shines.  We’ve got to take advantage of all the work that comes to us.  More and more of us are working on the basis of billable hours, or commissions, or bonuses that are linked to performance.  Somebody was talking to me yesterday about their “billability.”  I said, “Excuse me.  What do you mean?”  He said, “Oh, my billability last year was pretty good.” “Billability”—a new way of rating ones’ self.  The number of billable hours.

This issue of not being able to predict what the economy is going to demand of you, and therefore reward you, hit home for me when I got home from being Secretary of Labor.  I thought that I didn’t have to make choices anymore.  I thought that I could be there for my family.  My older son had a race, a cross-country race that was coming up, and I was so delighted that I was going to be able to see him race.  He has, like his father, very long legs and he’s kind of a gazelle when he races.  I remembered from years before when he was a younger boy, before I went to Washington, watching him, gazelle-like, prance across the meadows of eastern Massachusetts on wonderful fall days and I was so delighted to be able to see another one of his races when he told me it was coming up and he was delighted that I was going to be there for him.  Then three days before the race I got a call from a large management consulting firm.  They said, “Mr. Secretary, we need you on a project.  We think you will be very attracted and you will find this a very rewarding project,” and they then quoted me a sum of money they wanted to pay me, an eye-popping sum of money.  My pupils dilated.  I couldn’t believe that I was worth a fraction of that—I probably wasn’t, but they were foolish enough to be able to offer me that particular job, that particular project and then I said, “That’s really a remarkable offer.  Fine.  I’ll do that.  By the way, when does it begin?”  And then came the clincher.  They said, “We’re going to need to begin right away.  We have to start tomorrow and work right through the weekend.”  Well, what was I to do?  You see, I had another one of those choices.  I thought I had left behind in Washington the problem of trying to choose between my work and the rest of my life and here I was.  I was back, back in Cambridge, back in Boston, and now I had another diabolical choice to make.  Well, I will tell you what I chose, and I did choose to see my son race that weekend and I watched him, gazelle-like, prance over the fields and meadows of eastern Massachusetts, but I wish I could tell you I did so with no regrets.  Because as I watched that race it kept on occurring to me how much that race was costing me.  You see, before I got that offer the race was free.  Now it was one of the most expensive races I had ever seen.

But you get my point.  This is metaphorically the kind of thing that many, many people [face] in the new economy, the emerging economy, the economy of variable pay, the economy in which we work from project to project, or billable hours.  That new economy does pose these kinds of making-hay-while-the-sun-shines dilemmas.  In this new economy there often are only two tracks—a fast track or a slow track.  The fast track in which you are keeping up with clients and consumers and new technologies, or a slow track in which you are not and you are relegated to a track in which you are not going to get promotions.  You are going to be among the first to be laid off.  There are not many tracks in between.

  Some of my former students, both from the Harvard Kennedy School and also from Brandeis, I see them, and they come to me--twenty-somethings and thirty-somethings-- and I say, “How are you doing?” and they say, “Busy, busy.”  Well, you know that greeting, “How are you doing?”  Busy?  That’s a very ambiguous and ambivalent response.  It is both a complaint and also a celebration.  It is both a boast and also an agonizing statement.  “How are you doing?”  “Busy.”  And the boast comes in knowing that you are in demand because if you are not busy you are not in demand, and if you’re not in demand you are failing in this new economy.  And I say to my twenty-something and thirty-something former students, “Well, what does that mean?  You’re busy.  How are you?  How are you really?” and they will say to me, “Well, we’re doing fine.  We’re working eighteen hours a day, many of us, or sixteen hours a day.  We are in law firms or management consulting firms, or some of us are in investment banking firms.  Some of us are in politics and public affairs, but we are afraid that we may be losing the rest of our lives.  We’re facing dilemmas about having families or having children.  We don’t quite know what to do.  If we get off the fast track, we only have the slow track and it’s not clear we’re going to be able get back on the fast track”.  There is a binary quality to this new economy.

  Third, and finally, part of the problem is related to the widening disparities of income and if you’ve followed my logic so far you understand why.  There is, interestingly, around the world among advanced post-industrial countries a direct correlation between the extent of the discrepancy, the widening gap between the top and the bottom and all of the rungs in between, between that and also the amount of hours that people are putting in to their work and it’s easily explained if you think about it.   When you have a very wide disparity the people in the bottom, or the bottom 20 percent or the bottom 30 percent, they have to work harder in order to make ends meet because either the male or the other partner, usually the male, they are suffering in inflation-adjusted terms a decline in their incomes, in their real incomes and therefore they have to work harder in order to maintain themselves.  But people in the top 20percent, facing much, much higher remuneration than ever before, are working harder because the opportunity cost for them not to work that hard, that is, the sacrifice that they would be making in every decision to slow down, entails a much greater financial loss than ever before. 

  When I graduated from college in 1968, there was, of course, a difference in the compensation levels between a tenured professor and an investment banker--but nowhere near the difference in compensation levels between those two professions in the year 2001, nowhere near the difference.  Now, I would like to think that even if in 1968 the differences had been as great, the multiplier had been as great as it is in the year 2001, I still would have chosen to become a university professor.  I would like to think so, but I can’t be absolutely sure.  The opportunity cost is enormous.

  Now, where does that leave us?  Does that mean that we must be kind of economic and technological determinists?  Does that mean that we’re simply going to work harder and harder?  Does that mean we are somehow passive recipients of this new economy?  In all of the dimensions that I have outlined to you, the insecurities and unpredictability of income dreams causing us to work harder, making hay while the sun shines?  Is the binary aspect of that economy, fast track and slow track, causing us to be very reluctant to get off that fast track?  The widening disparities of income causing us at the bottom to work harder to make ends meet and at the top avoiding, avoiding, the sacrifices, the financial sacrifices entailed in slowing down.  Do we have to accept that?  I don’t believe we do and I believe that many of the issues that people feel internally--and again I refer to my free-floating focus group around this country where people would tell me when I would ask them about their lives and their work--they would say to me, “You know, I feel that I’m somehow an inadequate worker, or I am inadequate as a parent, or as a spouse, or as a partner, or I’m inadequate in terms of my taking care of an elderly parent or relative who needs my help, or I’m inadequate as a member of my community in terms of  being a democratic participant.”

  These qualities of inadequacy that people internalize, they don’t realize, they don’t understand that they are widely shared and that, in fact, they are related to some extent, obviously personality, responsibility begins at home, but they are related to some extent to these underlying structural changes in the economy.  We are not passive recipients of these changes.  There are steps that we can take not only as individuals but also as citizens.  The closest analogy, the closest analogy when people ask me “Well, what are the precise steps?” and I begin to go through some of the ideas that I put in the book, and they say, “Well, we can’t really do that,” or “That would be difficult to do,” or “You really expect the George W. Bush Administration to adopt that?” and I say to them, “Yes, yes they will.  My book will become the Bible of the Bush administration.”  You laugh.

  The closest analogy is one hundred years ago at the dawn of the progressive era when we faced what was then a new economy, then a new economy of mass production, and we as a people over the decades, the first decades of the twentieth century, we knew that we did not want to throw out the baby with the bath water.  We didn’t want to sacrifice all of the benefits of that new economy, but we also knew that we had to temper some of the excesses and reduce some of the injustices.  We decided we did not want child labor.  We wanted a forty-hour workweek with overtime.  We wanted a system of unemployment insurance and social security and a minimum wage, and these things seemed very radical at the time.  Many people assumed that this would wreck capitalism.  These things would undermine the fundamental basis of this new industrial economy.

  In retrospect these efforts to humanize the economy and reduce insecurities saved twentieth century capitalism from itself, and I venture to say that now that we are entering a new economy, a truly new economy, now I know there is a big debate going on.  Are we really in a new economy?  We have an energy crisis.  There’s been a bursting of the balloon of high technology, particularly the dot coms.  Are we really in a new economy? And I say, “Yes.”  We are fundamentally in a new economy in terms of the role that technology is playing in allowing consumers and investors to have a far greater choice globally than ever before and to switch so quickly and the social consequences of all of that.  The question remains, what can we do to humanize and provide people with greater security in this new economy?  We don’t have to do large, large bureaucratic things but let me give you a few examples, and then I’ll close. 

  Unemployment insurance, the legacy of the twentieth century’s industrial economy, only reaches about one-third of workers who lose their jobs.  Why?  Because so many employees these days, so many people who work, are contract workers.  They are self-employed.  They are free agents, if you will, and unemployment insurance is not available to any of them.  That’s not how the system was designed.  So why not expand our system of unemployment insurance to deal with all of these free agents?  Why not provide, in addition, a system of earnings insurance so that rather than deal with the extraordinary volatility of this new economy, this extraordinary up and down volatility in terms of earnings, someone will know that if their earnings increase dramatically from one year to the next they put a little bit of money into an insurance fund, and if their earnings dramatically decrease from one year to the next they can get some money out of that insurance fund to insure that they can pay the mortgages, the utilities and all of the other non-variable fixed costs of their family, and we could go on.

  A great deal is being talked about in the new administration with regard to family values and community values and spirituality and I think these are wonderful sentiments and I agree with the sentiments but if you ignore the role and impact of this new economy on families on the ability to parent, on the ability of people to be community participants, if you fail to acknowledge the stresses that the new economy is placing on people you miss the 3000 pound gorilla in the center of the table.

  Now, I have been home for four years.  I’ve been teaching.  I love my students.  I’ve seen much more of my children, although teenage boys after they go through the clamshell period, they go into the tunnel, and by that I mean you hear them.  They’re like steam train engines going through.  You hear them.  They’re in the basement somewhere.  You don’t see them.  I am now on a book tour.  I am violating every principle in my book.  I am working eighteen hours a day, slugging around America, doing my e-mails, calling home trying to reach somebody desperately, somebody at home.  Last night I called home and, miracle of miracles, my son, Sam, now sixteen years old, in his tunnel phase, after the clamshell, in his tunnel phase, I haven’t talked to him for what feels like years and he actually picked up the phone and I said, “Sam, Sam.”  He said, “Dad.”  I said, “Sam, how are you?” and we talked and I said, “I’m out here in California.  I’m trying to sell this book,” and he said “What book?”  We’ve become very close.

  These issues, the economy, our families and our communities will be the central issues of the next ten years.  They are already the central issues in many other advanced countries.  There are backlashes against modern capitalism, technology, and globalization.  You feel it in the air when you go to Europe, when you go to Japan, and here as well.  We must acknowledge these strains.

  Thank you all.  God bless you.