Inequality For All (video guide)

what followed each of these years? (1928 and 2007)

-1928 and 2007- crash after both—speculation of Wall Street—middle class went into debt to maintain standard of living—wages were stagnating—2008 housing market crash

How does money and politics contribute to inequality?

-If you have money, you have the ability to influence the political agenda, thus which policies are enacted. With money comes the power to control politics- we can help you in your next election if you help us- they were there for you at every point and now they want access. It is not the wealth it is the abuse of wealth. When inequality was lowest tax rates on the wealthy were higher and vice versa. The tax system has tilted to the rich and away from the middle class (Mitt Romney paid 13% while a guy in the middle class paid 39%). The fat cats get fatter. Funding goes down and tuition goes up for higher education. - In times of high inequality you have high political polarization; they run alongside one another.

why did the crashes occur according to Reich?

-Peak years where the top 1 percent (earn $380,000 and up) is taking home more than 23%. It looks like a suspension bridge graph; after each peak year there was a crash. In both periods the wealthy turned to the business industry.

Pay attention to what the movie says about the wages of the middle class vs. wages of the upper class over the past 30 years (since the late 1970s). How is this wage trend contributing to the increase of inequality?

-The problem isn't that the upper-class spends too much; it's that they spend too little. They save their money and put it towards investments. -The middle class is the true job creators since they are the most consumers. So the best thing you can do is help middle class people thrive -Many factories got rid of workers positions as machines/robots replaced assembly lines. - Wages have decreased over time; yet expenses increased- such as, childcare, rent, insurance, etc. Middle class workers work more yet they still don't have enough. As income inequality rises, upward mobility gets worse. Great Britain and Denmark have better upward mobility than United States does.

Explain the importance of Reich's focus on people/workers and his emphasis on higher education as important to reducing inequality.

-The virtuous cycle (more education, more skills, more spending, more investment, etc.) - Tuition and fees are rising; states are cutting their budgets for higher education. Education is what lifted people into the middle class during the Great Prosperity; advancing in education is worth it. It is important to invest in people so they can compete in the work force.

What is the significance of the "suspension bridge graph"?

-economic downturns, political polarization, fewer unions have fallen as income inequality has risen, etc. - high income inequality leads to economic downturns (crashes) - relative financial wages goes on the same one as inequality does

What are some of the parallels between the years 1928 and 2007?

-great income inequality big crash after both of the years speculation (wall street people taking more risks with investments) debt bubble because of stagnating wages (middle class started taking out debt to keep standard of living) the pop of the bubble was the housing market crash

middle class

50% above or below $50,000

what is the significance of the middle class in the US economy?

70% of the economy relies on middle class spending; wage are flattening and people are going into debt; its not alway the rich people spending money, we still need the middle class

amazon

employs 60,000 people; their business model is more efficient than mom and pop stores. Companies lay off people to increase profits and decline costs, especially people that have been there for a long time that get paid too much. Big companies are designed to not make good jobs; they are to make companies. Some people try to slow down the transition to electronic/technology (i.e. using cashier instead of automatic one).

What are the 3 ways the middle class has dealt with flattening wages and yet continued to consume things (i.e. spend money):

in the late 1970's the wages began to flatten instead of increase with productivity (labor unions declined in sync with the middle classes income decline- major assault on unions after Reagan fired the unions for air traffic controllers- the major underlying issues were globalization and technology). -Reagan went behind Bob and used it for his campaign as the economic plan by investing in the American people. But then, wages were flattening and some people were doing extraordinarily well. Companies were making more profits because they were leaving their wages at the same price as they made more money but paid the higher ups in the organization more. Executive pay keeps going up.

what is currently happening to the middle class?

it went into deep debt to continue their means of living its the heart of consumer spending keeps the economy going we need a strong, vibrant and growing middle class needs to be living comfortably and not living in struggle now they do not feel like middle class even though people tell them they are

The Great Prosperity

more affordable higher education; the GI Bill paid for soldiers education and after it we had a highly educated population; we created the largest middle class that was part of a cycle- tax increase, wages increase, workers are educated better, and so on.

The middle class exhausted all of their mechanisms to cope with flattening wages and started a vicious cycle of ...

spending less, workers less educated, unemployment rises, wages are lowered, etc

Borrowing and going into debt

using their home equity to cover cost such as credit cards, health insurance, etc. to maintain living standards- the debt bubble burst in 2008.

Starts in late 70's-

women go into paid work young mothers went into work in huge numbers- they didn't go to work because there was wonderful opportunities for women; instead they went to work because men's wages were flat

overworking/longer hours, multiple jobs, etc.

working more than industrialist, working more than ever; our society is very work driven.