Inequality for All Page #5

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and tuition and fees

are rising as a result.

One of the things

we've learned about inequality

is that it's clearly

linked to education,

including higher education.

More than anything else,

that's what lifted people

out of poverty

and into the middle class

during the Great Prosperity.

But starting in the late 1970s,

our college graduation rates

began to flatten out.

Countries that kept focusing

on higher education

were able to deal

with globalization better

by creating

a highly skilled workforce.

Look at South Korea.

Look at the Netherlands.

Look at Germany.

They've invested substantially

in education,

in skill building

of all of their workers.

Even though their wages

are high,

it's worth it to make stuff

that goes into the iPhone

from Germany

because it is so well made

and is so precise.

Basically, every other

industrialized country...

Japan, Germany, France...

they are investing per capita

much more public investment

in all of the areas:

Roads, bridges,

public education.

That's what we're not doing.

That's what we have to be doing.

We're almost out of time.

We can't do it,

not with new tech.

For years, I have been writing

about the importance

of investing in people,

in our workforce,

so that our people could compete

in this new global economy.

And then in 1992,

I thought I finally

might be able

to do something about it.

Today I proudly announce

my candidacy

for president

of the United States of America.

Bill Clinton told me

he had read all my books.

They must have influenced him,

because it formed the backbone

of his 1992 campaign

about putting people first.

If you put people first,

if you do what works,

what we know works

in the global economy,

you'll do what the Germans do;

You'll do what the Japanese do.

You'll put your people first.

You'll expand the middle class.

I mean, here was, you know,

somebody I'd known

from the age of 22,

and he called me one day

and said, "Look, Bob,

what I really want you to do

"is come down to Washington

right now.

I need you to run

the economic transition team."

I didn't even know what

an economic transition team was.

You can't imagine

the headiness, the excitement.

I mean, the chance

to actually take these ideas,

put them into practice...

I named my economic plan

Putting People First

to highlight my belief

that our nation

can only become a high-wage,

high-growth economy

if we make a commitment

to invest in the American people

to make the American economy

prosper.

That is why I'm naming today

one of my most trusted advisors

and closest friends

to the position

of secretary of labor.

Well, modesty aside,

I have assumed for months

that I was on Bill Clinton's

short list.

- You can step up on that, Bob.

- There is a step.

- Oh, there is a step here.

- Okay.

It was a dream job

for somebody like me,

who had worried about

and fretted about

and studied and taught about

and wrote about

what was happening

to the American workforce

for years.

That long decline

in median wages...

the wage of that person

smack in the middle

of the wage scale...

that decline started in 1978.

Those wages began to decline

in terms of the real purchasing

power of the dollar...

You know, on the one side,

it was pretty clear

that wages were flat

for most people.

The flip side was that

some people in this country

were doing extraordinarily well.

You see,

the same new technologies

that brought globalization

and automation

bestowed ever larger rewards

on people

who had the right education

and connections

to take advantage

of globalization.

Some people say to me,

"But wait a minute.

You've got technologies today

that you didn't have in 1980."

You know, we didn't have

flat-screen televisions.

We didn't have

low-cost air travel.

We didn't have Skype.

We didn't have the internet.

So who are

the winners and losers

from this great shift?

Consumers certainly are winning.

I mean, you guys, as consumers,

you are doing very well.

You get wonderful products.

Almost everything you're buying

is getting cheaper,

and the investors

are doing well.

Here is a chart showing

the rise and fall

of the Dow Jones

Industrial Average.

You can see something here.

There is sort of a pattern.

Whoo!

You see, something happened,

and I think it happened

starting right in these years.

You see these were the...

years I was labor secretary.

And investors got very excited.

I mean, we all saw

the stock market

going like this.

I mean, how...

What in the world was going on?

How could that be possible?

Were companies suddenly

that much more profitable?

One of the big reasons

corporations

were showing higher profits is,

they were keeping pay down.

At the same time,

corporate CEOs

were starting to pay themselves

large multiples

of what the average worker

was earning.

When we, in the fourth quarter

of last year,

along with a number

of other companies,

has to consider

workforce reductions,

it was a difficult time.

You knew that you

were impacting people

who would have a difficult time,

many of them,

in finding new jobs,

but you had to do it

for the organization to,

in that day, look to survive.

This chart shows you

the compensation

of the highest-paid executives

in 2010.

These executives

are being paid a lot of money.

Executive pay keeps going up.

Here's the ratio

of average CEO compensation

to the average worker's pay.

Suddenly this ratio

goes kablooey.

Bill Clinton in 1992,

one of his campaign planks

was that no company

should be able

to deduct the cost

of executive compensation

in excess of $1 million.

Many big corporate executives

raised their own salaries

even when their companies

were losing money

and their workers were being

put into the unemployment lines.

I expect the jet-setters

and the featherbedders

of corporate America to know

that if you sell your companies

and your workers

and your country down the river,

you'll be called on the carpet.

That's what the president's

bully pulpit is for.

When it came

to actually implementing it,

the Treasury Department decided

that as long as CEO pay

was linked

to company performance,

you could deduct pay

over $1 million.

Well, that was the signal

to a lot of executives

and to their boards of directors

to make more and more

of executive pay

into stock options.

That's where the whole

stock option thing came from.

It was kind of a perversion

of Bill Clinton's promise

in the 1992 election.

Another result of all of this

is that you get

the third group of people

who are doing remarkably well.

They're the people

who always do well,

particularly in times

of high inequality:

The financiers.

Between 1997 and 2007,

finance was the fastest-growing

part of the American economy.

In 2009, during the depths

of the recession,

the seven highest-paid

hedge fund managers

were taking in

more than $1 billion each.

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