MORAGA -- Joblessness remains high because working Americans' wages stagnated over the past 30 years while the rich got richer, and there is no more easy borrowing to do now, former U.S. Secretary of Labor Robert Reich said Tuesday.
"This is a jobs emergency, and if I were president tonight, I'd talk about nothing but this jobs emergency" and the reason behind it: "the flattening of wages over past 30 years finally catching up with us," Reich said shortly after President Barack Obama finished his State of the Union address.
Reich spoke to a capacity crowd of about 600 at Saint Mary's College's Soda Activity Center.
Reich, 64, served as secretary of the Department of Labor from 1993 to 1997 under President Bill Clinton; he is now the chancellor's professor at UC Berkeley's Goldman School of Public Policy.
He is the author of 13 books, including last year's "Aftershock: The Next Economy and America's Future."
Reich noted that the richest 1 percent of Americans in the late 1970s got about 9 percent of total income, but by 2007 that had risen to about 23.5 percent.
The last time the nation saw this kind of concentration of income was 1928, he said, and "you historians may remember what happened the next year" -- the start of the Great Depression.
That crisis taught America to flood the market with liquid assets to prevent a run on the banks, he said, but we did not learn our lesson about enacting systemic changes -- back then, things such as a minimum wage, Social Security, labor rights and higher marginal tax rates.
Taxes for the rich were much higher under presidents from Roosevelt to Nixon and yet the economy grew far faster, because the gains were more widely shared, he said.
Reich noted that Obama on Tuesday called this "our Sputnik moment," evoking the 1960s "space race" with the Soviet Union in calling for a burst of innovation, perhaps this time in competition with China.
But that is a long-term plan that won't create jobs right now, he said. Reich added that what the president did not say is that we should expand the earned income tax credit, "the most important anti-poverty policy right now in the United States," up through the middle class while raising marginal tax rates for the richest and imposing a carbon tax to encourage a turn away from fossil fuels.
American technology largely has done away with professions from telephone operators to service station attendants to assembly line workers, Reich said, yet even in the late 1990s, unemployment stayed low as people found jobs in the service sectors: retail, restaurants, hotels, hospitals, construction, elder and child care.
But those jobs tend to pay poorly.
"The long-term issue for the American economy is not jobs, it's wages," Reich said. "And if I were the president tonight talking about the state of the union, that's the challenge I would pose."
People are embracing the politics of anger because they feel frustrated, powerless and vulnerable, he said, and that's an atmosphere in which demagogues on the right or left can thrive.
But it's in all our interests to calm down, he said; even the rich will do better with a smaller share of a rapidly growing economy than with a larger share of a struggling economy bogged down in partisan politics.