accomplished you have at a time when a lot of people are discouraged around the country frankly in terms of the economy and their own efficacy their own power to do anything about the economy you here in seattle have done something and done something very significant which is a trend setter around the country you know i'm reminded how discouraged people are around america i was coming back from this week from knoxville tennessee people come up to me in airports very often you know because i'm kind of conspicuous looking and they they come up to me and i don't know who they are but they they come up to me and they start it's almost as if we've been in the middle of a conversation and this person came up to me and said so what are we going to do i said i don't know but it happens that it happens often and that's kind of a my own free floating focus group in terms of the well let the anxiety that's out there there's a lot of anxiety and a lot of feelings of powerlessness for one thing we are in if you didn't already know it we're in an economic recovery i hear some skepticism well the skepticism is deserved because this is the first economic recovery ever in history as in terms of measurement where the median wage has actually dropped adjusted for inflation the median household income has dropped adjusted for inflation now this is unusual i mean you hear reports that the economy is doing well we're having a lot of growth  second quarter growth figures we're just out very good but if the median is going down what's good about the growth or another way of putting it many of you know the difference between average and median you know whenever an economist is talking about average wages or average incomes watch your wallet the basketball player sh  you get my drift you see the at the people at the top poll up the average so what you really want to look at in terms of understanding where the american economy is in terms of the real success of the economy is you wouldn't look at the median median wage not only individuals but because a lot of households have more than one wage earner you might want to look at household median income and that is a problem and it's getting to be a bigger and bigger problem because in this recovery ninety five percent of all of the economic gains have gone to the top one percent now when i say that a lot of people accuse me of being a class warrior i am not a class warrior i'm a class worrier there's one letter different but it's very important i don't i'm not i don't think it's a zero sum game i don't think it's a matter of resenting anybody because they're wealthy but you have to worry when the media starts going down i mean one reason the economy overall yes second quarter growth is good first quarter growth was terrible overall growth has been very very very slow the worst most in need mc recovery on record one reason it's not been very good is because when all of the money is going to the top the middle class and poor don't have enough purchasing power to keep the economy going or do even get it out of first year this is not a complicated idea in fact it very much is the idea behind the importance of raising the minimum wage there are still some economists around who say if you raise the minimum wage you're going to kill jobs well the fact of the matter is almost all the studies and i'm not telling you anything you don't know because you've already gone through a decision making process but almost all the studies have shown and there been a lot of studies that if you raise the minimum wage you put more money into the pockets of people we're go spend it and they going to spend it mostly in the local area and if they spend it on a local area they create jobs and not only are you going to create more jobs because more people have more money to spend  you're also going to bring more people into the labor force who might otherwise say well i'm not all that interested in working for that old minimum wage but if the minimum wage is higher yes i might be attracted into the labor force so that means employers have slightly more choice of whom to hire which reduces turnover costs we know this around the country we've seen it around the country in one nine hundred ninety six i was bill clinton's secretary of labor and i was looking at wages and i said to and one of the things that it seemed to me very important to do was to raise the minimum wage it had not been raised in years we had had twelve years before bill clinton got there of republican president so i don't want to make this partisan tonight in any way republican presidents have served this country a teddy roosevelt was a good republican president abraham lincoln and so put up but but we hadn't had a minimum wage increase in a long time and i said to bill clinton don't you think it is time and he said well you know i think it probably is why don't you why don't you check with dick morris now some of you may remember bill clinton had a poster named dick morris and did morris did very fast polls i don't know how he did them so fast i eight hours to do the poll i think dick morris polls his family i think that's what he sort of attack a technique but anyway that poll and other polls showed that there was a huge amount of support and bill clinton was interested in pursuing it and we got republicans interested in doing it and there were some economists who said no you mustn't raise the minimum wage because it's going to kill jobs and i suspected not because of the very reason i gave to you just now and in fact we did raise the minimum wage and what happened over the following four years was the method the best job growth in the united states in american history and i was directly responsible no i wasn't i wasn't i wasn't but but here's the thing i'm not i'm not suggesting to you that we created jobs by raising the minimum wage per se all i am suggesting is something more modest and that is that inflation you increased it just in terms of the purchasing power of the minimum wage and sixty eight that minimum wage today it would be way over ten dollars an hour and then if you added in and adjusted it for  productivity improvements because the average american worker is much more productive today than he or she was in one nine hundred sixty eight you get way over fifteen dollars an hour and that's just keeping it aligned with purchasing productivity you're not actually doing anything more than that so it's not all that i don't mean to detract from the radical far sighted pressure and seattle decision to raise the minimum wage i'm just saying that it's just logical it's just inherently logical the most amazing thing to me is why other places and other cities have not done it now it could have something to do with a factor that i find sometimes embarrassing to talk about because as we've seen widening inequality we've seen more and more money wealth income coalesce concentrate at the very top i said you before i'm not i'm not a class warrior at all but this is something that does worry me when you have all that money going to the top that money starts infecting and undermining politics you see that part of the problem of inequality is not just that you rob the middle class and the poor have enough purchasing power to keep the economy going but you also start corroding corrupting and undermining the democratic system money and power are interchangeable even before that shameful supreme court decision which i think is one of not only it's right down there with dred scott and bush against gore i'm talking about citizens united against the federal election commission and then and then mccutcheon i thought you couldn't even get worse than citizens united the navy mccutchen i mean what has happened is you have a perfect storm you've got all of that money income and wealth at the very top and then you have the supreme court opening the floodgates to allowing all that money income and wealth to fundamentally undermine our democracy making it harder for every state every locale certainly harder for the federal government to do things like raising the minimum wage or do other things that are necessary that are absolutely critical expanding the earned income tax credit for example now your eyes just  saw i saw that never before has there been so important a public policy that fewer people knew about than the earned income tax credit it's a it's a wage supplement we should expand that we should also and this is this is this should not take a great deal of political capital if we didn't have so much money destroying politics we ought to be investing in early childhood education and  and also make public higher education affordable making higher education but this is people in terms of the university of california berkeley where i teach tuition and fees in one thousand fifty five were zero we had a public higher education system that was expanding and charging nothing on the same principle as our teacher twelve system we understood higher education as a public good not as an individual investment it was a public good where did that go why don't we understand that anymore i mean the same thing has to do with health care i mean the affordable care act i believe he is a big advance but why not a single pa i mean medicare for all even a public option what about how we can move in that direction all i want to stress with you is that one reason we're having such a hard time moving in directions that respond and counter act widening inequality in this country is because you have one of the corollaries wiping inequality which is all of that money coming down and undermining politics and undermining our political system the other problem with regard to widening inequality is that and here's an interesting thing political scientists over the years have studied widening inequality and seen that there is a direct correlation with the degree of inequality and the have very high political polarization almost gridlock and then very low inequality in the one nine hundred fifty s one nine hundred sixty s and you actually have a lot of non partisan activity and then  starts rising again as inequality starts rising and now oh guess what we can't get anything done certainly in washington it is just gridlock what does inequality have to do with political polarization nobody knows exactly that is political scientists have seen the correlation they haven't been able to figure out direction of causation but i think it is pretty clear i think that because people increasingly feel themselves working harder and harder and getting nowhere they get frustrated naturally it's human they get angry and as they get frustrated and as they get angry they creates the possibility for politicians to prey upon and take advantage of that anger through the politics of resentment scapegoating everybody would like a simple answer why am i working harder and harder the game  rigged who's to blame and you so you have some polit i'm not saying all politicians by any means but you have some politicians and even some media outlets i won't name names bill o'reilly no i want you know bill o'reilly accuses me of being a communist i am not nor have i ever been member of the communist party but the point is that you get a a kind of politics of resentment in america that splits people off from one another i was and the media is merely reflecting it it's taking advantage of it but it's also that we agreed on much more than we disagree and i thought it was a good modeling experience you know that the public needs to see democrats and republicans agreed and we came to a station break and the producer said into my ear bud i said we're doing pretty well right she said no i said why not i thought i thought we're doing pretty well and she said no you've got to be angry or i said i don't want to be angry or why should i be angry she said because you've got people all of the country surfing through hundreds of channels and they're going to stop only when they see a fight kind of a gladiator mud wrestling philosophy of media and i said i do i do i don't want to do that she said you really do have to i said no no no she said we've got ten seconds left you got to be angrier and i said no she said you must and at that point i lost my temper but this is what we are up against you know i travel around the country a great deal and i talk to a lot of people in fact i actually have been trying although this is an exception i try to spend more of my time in so called red states than i do blue states and i was in tennessee and north carolina last week and what i have found is that most people who describe themselves and many of you presumably who describe yourselves as republicans you are very decent very common sensical and i've enjoyed conversing i mean we only learn when we talk with people who disagree with us that's how we learn and one of the problems one of the problems is that we are so many of us are in our bubbles we are segregating not only by income but we're also segregating by belief we want to be surrounded by people who agree with us and it's very very it's just very enjoyable to be in a cocoon so you don't have to ever have anything you believe a challenge but that's not the way we learn i drive whenever i can my mini cooper i have a little mini cooper and i drive it across the country from coast to coast i drove it when i first went out to berkeley or now teach i drove it from cambridge massachusetts now cambridge massachusetts and berkeley california are really the same city i mean they you know the climate is slightly there but they're basically the same side i was great i was driving from you know the same city the same city but i i tried to create a route and enough time so that i could talk to a lot of people along the way and i enjoyed myself and this was a number of years ago i discovered that there were no mini coopers in the center of the united states you know that there are none absolutely not and i i was a i was in a gas line and i was waiting for gas and and i think was oklahoma city and some truckers a big big big guys came up to my mini cooper i was sitting in the mini cooper and i said this is this is a mini cooper a mini what i said mini it's a mini cooper this is a it's designed in england and what it's a parts are coming from all over the united states and all over all over the world and they s how how does anybody fit in the had i had a decision to make and i open the door and i got out and i stood up and i said no problem kind of for lauren and i said well you see i'm from massachusetts and we're all under five feet tall but then we had a good discussion we talked about politics and we talked about all sorts of things and i've enjoyed i've enjoyed my discussions but we're not talking to each other nearly enough and many of us are seduced by a number of are economic mythologies and their mythology is that are propounded by people who either don't know the reality or are they know the reality and would rather that we'd not know the reality one of the mythologies we've talked about already that is you can't raise the minimum wage without causing jobs to be lost i gave you the truth but that mythology is used all over the country and it's drummed into people's heads over and over and over again here's another mythology that the rich are the job creators and they need tax cuts in order to create jobs now that used to be called supplies side economics or trickle down economics here's the the problem with that idea is that we tried it you know there are very few economic ideas that have actually been tried in practice this one has been unfortunate enough to have been tried in practice we had some supply side tax cuts under ronald reagan and then again under george w bush and guess what nothing trickle down nothing positive trickle down the median wage was flat or dropping and has been over thirty years in terms of adjusted for inflation we don't we try to supply side economics doesn't work besides the rich are not the job creators the job creators as nick hanauer keeps reminding us in that wonderful film that nick starred in called inequality for all which david only saw five times and i david what's stopping you from a six time but as nick keeps on reminding us and i and it's absolutely true the job creators are not the people at the top job creators are the people in the middle and below what they are the ones who create the jobs because it's their purchasing and it's their buying that inspire and create incentives for businesses to expand without them you wouldn't it's the same logic as the minimum wage that we just talked about or here here's another the third mythology that somehow corporations need lower taxes in order to create jobs now anybody who believes this let me tell you something american corporations are now sitting on over two trillion dollars of cash they don't know what to do with it they're buying back their own shares of stock which is the most  imaginative thing you can possibly think of instead of investing in new are indeed or expanding they don't need additional tax cuts what they want to do with their money is pay their to do the same and if everybody raise their wages there would be more purchasers of model t ford and other automobiles and he was exactly right that's exactly how he made so much money by lifting w here's another mythology and a dangerous one that way the way we get more jobs is we reduce wages overall have you heard this one i  congressperson and she said that the way we reduce unemployment fact we could get rid of unemployment altogether if we got rid of the minimum wage completely now there is a certain diabolical logic to that that is if if we were willing all of us to work for a nickel an hour or maybe a penny an hour maybe we would all have jobs in fact slavery was a full employment system that you see the if you see the absurdity i mean the goal can not be just employment the goal is employment with good jobs that is the goal to just say the goal is employment and to assume that everybody is being paid too much and what we want to do is get jobs and wages down is puts logic completely on its head and the fifth related mythology is that people are paid what they are worth now you've heard us to some extent this has got to be corrects because they're paid what they're worth in the market it's kind of a tautology if they're paid what they're worked worth in the market that means the market must be paying them what they're worth but that is not a terribly sophisticated logic in fact that is a trivial and dumb logic buried in that statement that people are paid what they're worth is a moral claim that is hidden but it is heard by people all over this country if you are not paid very much you're not worth very mark if you're paid huge amounts you must be worth a huge amount in terms of society now let me tell you something i think some of the most valuable people in terms of society who i have ever met are teachers and social work could then home health care providers and i could add a lot of people who are providing all kinds of care and attention and love to a lot of people they get very very little are they worth little they are worth a fortune on the other hand on the other hand look at a hedge fund manager now i don't want to insult anybody  and if you happen to be a hedge fund manager i like you i i don't in any way disparage you but i i want to raise some questions about your social work because  simply moving money or hedging against hedges and a lot of hedge fund managers they're hedging against hedges who are hedging against hedges they're involved in in fact i'm not going to limit my comment to hedge fund managers i'm also going to go to private equity managers and even even venture into investment banking and some other of the hyde levels of finance that got us into trouble in two thousand and eight with their derivative what happened i mean you were you were executive share of the executive committee at citi group so you probably know what happened i just i just explained it to me and he said it was a it was a perfect storm a perfect storm and i said what does that mean a perfect storm and he said well just everything worked out the worst possible way you could imagine in ways that nobody could have foreseen well maybe that's right but in terms of everything that i read everything that i understood everybody who i interviewed everything that i tried to get into my head about what happened it wasn't a perfect storm it was a concocted storm in other words in other words the the the biggest banks they took risks with your money and my money and unfortunately the only thing that actually i was very proud to be part of the bill clinton administration but in one nine nine bill clinton did something that i don't think you should have done it got rid of the glass steagall act and that was important to have because that separated investment banking from commercial banking and when you had investment banking commercial banking together you had the possibility that bankers would take a lot of risks with other people's money and some of that money was insured money of sort of a rerun of the savings and loan disaster and on top of that you didn't really have any controls on the insurers who were supposed to be insuring the money and the risks that the banks were taking a i g for example i don't want to dredge all this up this is pretty awful old history but i want to just dredge it up for the purpose of reminding you that these people many of them need tens twenties thirties of millions of dollars a year in fact three years ago in the middle of a very very anemic recovery the fifteen highest paid hedge fund managers got paid a billion dollars he now again i'm not a class warrior but i want to raise this issue just this question with you because if we have people like home health care workers and teachers and nurses and social workers and people who are custodians of some of the most important and valuable things in our society such as our children and our elderly people and others who desperately need help and they're get paid in getting paid almost nothing and you have people who are gambling in ways that potentially ruined the economy and in that case in two thousand and eight many of those people did not pay any price nobody and they're getting paid a billion dollars well it seems to me that all of that is evidence enough that the proposition that you're paid what you're worth ca i come across people in fact when i was in knoxville tennessee last week i came across a young woman who told me that she was not doing very well economically and we had a little conversation we've been to much time but she i said will tell me what's going on and she started to tear up she start to cry she said that she was holding down three jobs and she was trying to get enough money together to eat and to have a place to live and she was not making it and her health was deteriorat and she was going to be out on the street and she started to cry and she said i'm so ashamed and what i said back to her is what i desperately hope everybody understand if you're holding down three jobs it's not your fault you have nothing to be ashamed of you are doing everything you possibly can you're not losing ground because you are blameworthy there is something called an economic system it's organized in a certain way right now it's not organized in a way that rewards most people for the work they do people don't have as they did forty or fifty years ago most people don't have for example a union behind them they need a union unionized and that meant that so many workers were unionized that even the nonunion workers and their employers got the benefits of those prevailing wage and benefit agreements but now in the private sector in the united states fewer than seven percent of our workers are unionized which means that workers don't really have the bargaining power they need it is not their fault it is not the fault of this young lady who was in tears feeling like a failure feeling ashamed you see one of the problems with the you're paid what your work moral that it makes people who are not doing well feel like not only a failure but feel shame they feel ashamed of where they are and they don't reach out to other people for help and they don't reach out for other people to other people to organize them to oregon obvious and what they need to do is feel enough confidence and enough power that they join with others and joining with others gives them evan more confidence gives them even more power because in union and in political organization there is streng and so what we need to do and you have already done this in seattle and you're going to do more of it and there's a lot more to do in terms of paid family and medical leave for example  many of the other things we've talked about to diets what you can do and what we can do all and all of us are getting inspired from what you achieve we have got to counter acts and create the countervailing power that is needed in our politics and in our economy to give average people once again the kind of say over their lives the kind of political voice the kind of economic power that americans once had this is not a zero s game by the way the rich in this country would do better with a smaller share of our rapidly growing economy than they're doing now with a huge share of an economy that's barely growing at all but they bought a lot of lies and they are some of them financing a lot of mythology and a lot of lies the first step toward the kind of organization and countervailing power that i'm talking about is to know the truth to spread the truth to know what it is that makes this economy function to know that the center of the economy are working people who are getting paid adequate wagers to know that upward mobility and equal opportunity are the guiding principles not only of the economy but also of our entire democracy if we don't remember that if we don't cherish that we have very little to hold on to so seattle let me thank you for what you've accomplished let me thank you for setting a little the lights and a beacon light for the rest of this country and let me thank you for what you will accomplish also in the future  you all turned in some amazing questions some of the questions were answered in the course of the presentation and i have plenty more here that we're going to talk about now joining us right now we have  we'll be surprised so the first question how does the redistribution of wealth tie into decreasing resources due to population and climate change i seem overpopulation climate change it's a question about  conundrum and i'll just reframe it which is if we have a world in which more people have more stuff how do we not annihilate ourselves is that a fair reconstruction of that and and and the answer and there 's a complex answer to that question i think but it but it requires us to step back a little bit and acknowledge that the ways in which we we presently in the ways in which you know the orthodox economic paradigm defines growth and prosperity leads us to a terrible place g d p which is gross domestic product basically the sum of the value of outputs of the economy that you know one of the great challenges of the age is to redefine prosperity from outputs to outcomes and to acknowledge that the measure of prosperity really is the degree to which lived experience for participants in the economy improves right and i have a collaborator that runs the institute for new economic thinking at oxford university and he and i call this the accumulation of solutions to human problems that that really is what prosperity is because the far left answer to this challenge is you know north korea where we all sort of turn off the lights and you know shiver in the cold probably isn't going to work we have to acknowledge human striving and the need the requirement that we find ways to improve the circumstances prove lived experience so the trick really will become changing our definitions of what growth is from an put based model where basically the more stuff we burn somehow the better it looks to the degree to which we improve the lived experience of the people in our economy and i think there are constructive ways to do that they can they can they can well let me just add quickly that there really are two ways which environmentalism and fighting climate change are completely consistent with creating a lot of good jobs one is if we understand that this builds exactly on what it was saying if we understood in a stand that there are a lot of good jobs out there in terms of creating non carbon based energy sources wind and solar for example are almost in fact in many respects competitive with carbon and there are a lot of potential jobs in wind and solar and in various other aspects of green technologies and a green environmental movement if we simply understand that we need to train people for them but also that we develop the incentives in the economy to generate the desire that the demand for those kinds of non carbon based technologies the second point though that i think needs emphasizing is that as the environment changes and as we suffer the consequences of climate change who are the first people to suffer they are not the rich generally speaking the wealthy of the world are going to do fine they are going to get the water they need the they're going to get the food they need they're going to not suffer the consequences of drought they're going to be on higher land so they're not going to be flooded out and that is itself is a political problem because unless we know that we're all in this together it's going to be hard to get the political will to do something about it with the needed rise of the minimum wage fifteen dollars an hour should those in lower level jobs that have worked at them for say fifteen years and slowly worked up to a barely livable wage also get a raise of some of some percentage well i mean i think that it certainly you know the point of raising the minimum wage is to raise the floor and if you work for an enterprise that pays lots of people present minimum wage but you earn more than them when the minimum wage goes up you will find that your employer will need to pay you more than them so that you know the beauty of the minimum wage that pushes all wages and should have a compressing effect upwards towards the middle class you know indeed that's what the data suggests happens and  you know you know i have no doubt that that's what will happen but you know i reject this argument that i have heard before that raising the floor somehow penalize people who have worked hard already to get above the floor we're all in this together and everyone benefits from an economy where every worker earns enough money to participate in the economy and enough money so that they do not require other people to pay taxes to support them even people who earn a little bit more than the minimum wage now increase happened how much will inflation increase or will inflation increase over the course of the minimum wage and goes up over the years nick so so the the inflation argument is a specious one the idea that we should not raise the minimum wage because it will create inflation is like arguing that somalia is better than switzerland because a ham sandwich in somalia cost ten cents and in switzerland it costs fifteen dollars clearly one of those economies is superior to the other and one of those places is a fun place to live in the other is somewhat more difficult you know our goal as a society is to create a high wage high quality economy one that everyone is included in one everyone will benefit from and that's why the fact that pushing wages up a little a little bit may in turn turn make make some prices go up a little bit too isn't isn't a bad thing in many ways it's a good thing and the sign that good things are happening but to be very clear our problem is that lots and lots of workers can hardly get by and if you raise the wage in the united states from seven twenty five to fifteen dollars for those workers those workers will earn one hundred percent more but wal mart will have to raise their prices one and a quarter percent or something like that as a consequence of that increase and so for that for those workers that's a that's a fantastic trade in for people who don't benefit from that wage increase well up the income ladder well they can afford that one percent increase anyway and so you know again you know that you know the beauty of a capitalist system if it's structured right is it really can be a virtuous cycle that benefits everyone as wages increase the businesses have more customers and the more customers they have the more workers they were quire which puts pressure on the labor markets which  wages and the need for more workers which in turn creates more business for businesses and that's and that's really the virtuous cycle that we're trying to create that the minimum wage bite that we're having in the country represents and why people you know at all ends of the economic strait and should be should be supportive of it but you've heard this criticism that when the rhythm wage goes up to fifteen dollars an hour or even you know you have thirty or fifty or sixty consequence of the minimum wage going up but there is absolutely no doubt that high wage places are high employment places you show me a low wage place i will show you a poverty stricken hellhole washington state has the highest minimum wage of any state in the nation are right if the trickle down ideas that you just expressed were correct we would have slid into the ocean washington state pays thirty percent more than the federal minimum wage in washington state is currently creating more small business jobs than virtually any state in the country washington pace tipped workers four hundred and twenty seven percent more than the federal tipped minimum of two dollars and thirteen cents tip workers in our state make nine thirty two plus tips if the trickle down ideas were correct there would be no restaurants in seattle washington how could there be right we pay four hundred percent more than the federal than the federal minimum and yet the restaurant business in seattle washington is among the most robust in the country why because when restaurant we're restaurants pay restaurant workers enough so that even they can afford to eat in restaurants it's actually good for the restaurant business because six the fundamental off capitalism is when workers earn more money businesses have more customers and quire more workers and it is simply it is simply ridiculous this idea that speaker boehner is out peddling that you know if you raise the price employment guess what happens you get less of it as if this is a physical laws like you know mass times acceleration equals force this is nonsense this is nonsense these economic laws are not physical laws adjustments and every economy continuously people lose jobs and people gain jobs and there will undoubtedly be some adjustments in seattle in terms of people losing and gaining but the net number of jobs is going to go up because there's nick said when you have more people with more money in their pockets to buy more that generates more demand which generates more jobs this is not this is out much more of a law have in this country now and you've had for years a lot of underutilized capacity you have a labor participation rate in the united states that is lower than it is and has been for thirty years and you have very little power unfortunately among workers to demand raises for the reasons we've already talked about when you have that much underutilized capacity and you have no labor power you have no inflation the baby is just a problem the federal reserve board is now struggling with it is the lack of inflation the possibility of and this is the danger prices going up because once prices start going down and what happens consumers hold back because they expect prices to go down further and then the fed doesn't know what to do then you get into that kind of inflationary cycle that japan has been in for more than a decade our enemy is not inflation our enemy is in if you if you can contrive a little bit of inflation here in seattle that would be a great contribution in essex i just want to i just want to have no doubt that there are businesses out there that are predicated on paying workers poverty wages that they have business models that depend on it but those businesses will either change or go out of business as wages rise i just don't have a problem with that and i am willing to look anybody in the eye can find a way to pay workers a living wage and say you know you should find another line of work i'm going to have to put a cap on this because i'm the moderator and it is nine o'clock and it is bed time so the last card the last card of the evening says in very large letters we love you robert and i think we can all agree about and the question is so when is the revolution