UYGUR: Just a little while ago, we‘re talking about the politics of today‘s new job numbers, but I also want to talk about the reality behind the numbers. What does it mean for our economy? The news today was that 216,000 jobs have been added where the private sector driving most of the game. And unemployment rates slip to tens of a point down to 8.8 percent.
Look, obviously, that‘s a good thing. And yet, there are still 13.5 million people unemployed, and there are almost a million people in this country who simply given up looking for a job. And most interestingly, consumer confidence is dropping through the floor. Why is that? Are these positive job numbers a sign of good things to come? Or do we still have a serious structural problem with our economy?
Now, let‘s try to find out. Joining me now is former Clinton labor Secretary, Robert Reich. He‘s now a professor at U.C. Berkeley. Secretary Reigh, let‘s first dispense with the obvious. The republicans say, oh, my God, if we just cut spending, that will magically create jobs. Does that make any economic sense, in the short run?
ROBERT REICH, FMR. LABOR SECRETARY: Cenk, it makes no economic sense at all in the short run. I mean, in the long term, yes, we want to balance the budget. We want to get rid of the deficit, but right now, when you got 13.5 million Americans unemployed, the last thing you want to do is unemployed even more Americans, fire more Americans, get rid of more American jobs by cutting the deficit.
That means there are fewer people who have money in their pockets to turn around and buy things from other people who need to sell them in order to keep their jobs.
UYGUR: And I want the audience to understand, it‘s not that we‘re focusing on the short term. It‘s that, in different times, you need different remedies. If you got massive unemployment, you need to stimulate the economy. It‘s not just like oh, we‘re just going for a short-term gain here. That‘s why it‘s so important. But Secretary Reich, you‘re still not quite encouraged by these numbers. I know based on reading your articles. Why are you so concerned?
REICH: Well, because at 216,000 new jobs, Cenk, that‘s good. You know, that‘s—we‘re moving in the right direction, but at 200,000 jobs a month, even if we could keep it up, that would mean we would not get back to unemployment levels like we saw three years ago before the great recession until the year 2018. I mean, we can‘t wait that long. We‘ve got five people who are looking for a job for every job that is available right now.
Another thing, the average length of the work week, and one thing you really want to look at, and it‘s not featured, but it is very important, the average work week is still stuck at 34.3 hours. That means that most people in most jobs are not getting basically their full paycheck. Most people who are hourly workers, most Americans are hourly workers are still getting low pay checks. I mean, pay is going down, it‘s not going up.
UYGUR: Is the problem the people in New York and Washington, they don‘t see the struggles that you‘re talking about, whether it‘s the consumer confidence, whether it‘s the amount of hours that people are working, et cetera? I mean, if you look at CEO pay and you look at the stock market. The stock market is in great shape. CEO pay. Oh, my. Look at these numbers. Twenty-seven percent median pay increase this year.
The median CEO pay this year is $9 million. Their bonus is $2.2 million, up 47 percent, three-quarters of CEOs got raises in 2010. So, I mean, these are some great numbers for them. In the other part of that question is why isn‘t it translating to us, the rest of the economy?
REICH: Well, there‘s no trickle down. I mean, the whole trickle down theory, Cenk is bogus. You know, most CEOs, big companies now, most people on Wall Street who are in the big banks, they are doing as well as they did before the great recession, before we, taxpayers, bailed them out. But most homeowners never got a bailout. Most people who are underwater in terms of owing more on their homes than their homes are worth, they never got a bailout.
Most people who are losing their jobs, you know, they got some additional unemployment insurance, but that‘s only 50 percent of the people who are jobless are eligible for unemployment insurance across this country. So, you know, a lot of people who are really hurting right now, and New York and Washington, unfortunately, seems to be oblivious to all of this.
UYGUR: Now, Secretary Reich, I want to get to the heart of this, right? Because, look, it seems that this is coming back way, way too slow as your numbers point out. Is the problem that the CEOs and these companies are making great profits because they‘re actually going abroad, and hence, our middle class here in America is going to really struggle to come back? Is that the heart of the problem?
REICH: Well, that‘s part of the problem, Cenk. You know, I heard your discussion before. I mean, anybody who‘s talking about cutting taxes for corporations now, when corporations are sitting on $1.6 trillion of cash. I mean, they don‘t even know what to do with the money they have right now. They‘re buying other companies, acquisitions, mergers. They‘re buying up their own shares of stock. They‘re paying their CEOs unbelievable amounts of money.
I mean, anybody who says that corporations need tax cuts now doesn‘t know what‘s going on or is maybe not being completely honest with the public. The problem in a nutshell is that we, really right now, don‘t have enough aggregate demand. There are not people out there in the United States with enough money in their pockets to turn around and buy all of the things that are Americans can produce if full employment.
And until we get our wage structure back up to what it should be, instead of fighting unions and fighting employees and cutting their wages and getting job concessions, I mean, that goes in the wrong direction. They‘re not going to be customers out there for all the things we can produce, unless, people actually have jobs and have money in their pockets.
UYGUR: All right. I want to press on one last thing, Secretary Reich. I mean, if we had a strong, progressive president who focused like a laser beam on the middle class, and said, look, it‘s not just for justice sake they were fighting for the middle class, but it‘s for the whole economy, as you point out here. Wouldn‘t we be in a lot better shape?
REICH: Yes. I really do think that the president and Democrats in Congress ought to stop playing footsie with Republicans. You know, cutting the budget deficit right now, which is crazy, but also, it‘s very important that the president get out in front and tell the American public, what is going on? Why this recovery is so anemic? Why we‘re not really getting very many jobs back? And we‘re certainly not getting wages back.
Why we need to go back to the basic bargain? We had in this country, in the first three decades after the Second World War, which is people had paid enough so they could turn around and buy all the things that they produced. I mean, we had labor unions. Even where we didn‘t have labor unions, companies actually understood they had a responsibility to their employees. And that was good for the companies. It was good for the economy. And right now, that basic bargain has completely been obliterated.
UYGUR: We‘ve got to go back and fight for that. I couldn‘t agree more with that. And I also agree with not playing footsie with the Republicans. All right. Former Labor Secretary Robert Reich, really appreciate your time tonight.
REICH: Thanks, Cenk.