Class 1: “What’s Happened to Income & Wealth” by UC Berkeley Professor Reich

Welcome to my undergraduate course on Wealth and Poverty. This is the first of fourteen classes.

The questions we’ll focus on today: Is some inequality both inevitable and necessary? At what point, if ever, does it become a problem? What’s the difference between income and wealth inequality, and which is more important? How do income and wealth inequalities overlap with race and gender? And the real puzzle: why did these inequalities begin to widen so dramatically starting in the late 1970s and early 1980s, and continue widening since then?

Even though this isn’t a real classroom and I’m not with you in person, I hope you find this both enjoyable and challenging. Don’t expect to learn by just watching and listening, though. I want you to be an active learner — which means answering questions I pose and putting various puzzle pieces together. I’m not going to tell you what to think. I’m going to try to provoke you into thinking harder and more deeply.

Class Outline
-------------------------
00:00 - Introduction
14:35 - The paradox
42:11 - Economic inequality by race
52:39 - Mobility
59:59 - Should we care?
01:12:00 - The $1000 experiment
01:20:17 - Public values and social change

[jmwild]

I love when professors share their courses online. This is great stuff, thank you Mr. Reich.

[AlexisDE]

Wait what?! I can watch a whole Berkley course bei a renowned Professor for free online?? God bless technology ❤ and the university and professor for providing the amazing content and being so generous to share their knowledge with literally everyone ! Amazing

[thehylers]

Dear learners and the curious: I've come back to class #1 from the future - I'm on #6 - to encourage you. This Wealth and Poverty Class series has changed my thinking. I've been alarmed, challenged, angered, informed, set free from false beliefs and encouraged to make changes in my life for the betterment of my family and fellow man. Keep learning and God bless everyone here ❤

[reidhowland]

I love having access to this. It's an amazing learning opportunity. Thank you, Professor.

[Dr_Mel]

There's a big oversight in the genie and $1000 experiment examples, and putting them back to back like that does a good job of highlighting that oversight. There is a very crucial difference between giving the top 1% a lot more wealth and jilting someone out of ~$1000 because you don't like why they're getting $1000. These are not measuring the same factors or the same public values. Students may express them similarly, and I think economists and those influenced by economists (to borrow a line) see this and see a solid conclusion. It's a conclusion that states that people only have an adversarial approach to the ultra rich because they also want to be ultra rich and they simply object to their current circumstances. Most people can't even conceive of how much money the top 1% have let alone be envious of it. When pressed, sure, people know they don't like it. But here's the oversight:

Money is influence and power, it's not just legal tender for goods and services. For normal people it's the stuff we pay bills with and buy fun things with. For the ultra rich, it's power. When wealth becomes SO extreme and SO densely concentrated, it causes problems for the rest of society. Even if I get 10% more money off of my modest wealth, giving Bezos or Musk 20 PERCENT more wealth would be... frankly quite dangerous. They can invest oceans of capital into projects and campaigns and lobbying efforts and candidates, they would wash away any collective efforts for funding anything they don't want purely because THEY want to. Their ideologies become realities the rest of us have to deal with. They are the modern nobility who have more personhood than other people.

My problem isn't that I'm not Jeff Bezos. My problem is Jeff Bezos.

[Moon_Thief_]

Just came across this video (& it's subsequent ones), and I don't have words to express my gratitude at sharing these classes with the world! I'm 42, and although am halfway towards an associates degree in business administration, financial concerns have laid to rest any future college dreams for me. That said, I've always had a love of learning, and these videos are an absolute gift.
Thank you beyond words, Professor!

[magalyferrer]

Excellent, Robert. Thank you. We need you. I am Cuban-American and live in Miami. I feel terrified seeing the extreme right re-emerge. There is confusion in the minds of most Latinos regarding who they should vote for. The majority in my city, especially Cubans and Venezuelans, are being deceived by the media that speaks our language. They think that Biden supports the communism from which they escaped and that Trump will save them from this paycheck-to-paycheck life, with just a few hours to sleep that the majority get. Latinos in the United States urgently need to understand what the extreme right, the extreme left, and Democracy are. They have to know the dangers they expose us to if this new type of fascism, with Donald Trump as its leader, triumphs. Please, also try to reach out to Latinos. There is a lot of ignorance in our towns, which is why they are easy prey. Millions of Latino votes. We can save Democracy.

[toddrandolph]

Robert Reich is a national treasure. These ideas would save America (and subsequently the world) if people understood and used them appropriately.

[jz]

I regret not taking this class at Cal five years ago and it truly makes me happy to watch the recording. Thank you Professor Reich.

[stevenzheng]

I like his style of presentation. Not only is he lecturing about ecnomics, he is also doing standup and being a gameshow host!

[musicmomcarrot]

I follow you regularly and when I saw this class posted, I thought, "why not"? Then I saw it was 90 minutes...do I have that attention span? Haha...but it went by so fast. You are an engaging professor, and those students in class are very lucky! Happy to participate virtually. I immediately posted the class to my fb page...

[salsusmagnsu]

My reasons for not accepting the Genie experiment: 1. Historically the way our system is set up, when the top group gets more they use that wealth to take the gains from the middle and lower income group, because it gives them disproportionate access to influence. 2. Money in too few hands lends itself to monopolies that also gobble up the gains from the middle and lower income group. So getting a 3%/1% gain in the middle/lower groups but then giving the top group 20% that wealth translates to power and that power can be used to wrest the gains from the other groups.

[alvapazz]

Everyone talking about how great Robert Reich is as a prof (he is, this is a phenomenal lecture), but not many writing about the implications of what the man just explained.

[rachaelb]

I love when professors share their lectures with the general public. I love learning new things and would be a permanent college student if I could afford it lol. It’s awesome that UC Berkeley has someone with so much life experience on their staff.

[jamesstrom]

Reich has been pushing for renewal of American egalitarianism for years. Fighting the good fight. Keep at it professor. May more people listen.

[glennacookmckitterick]

Thank you, Professor - for your brilliant and welcome voice to save our democracy. ❤

[papajeff]

This guy is a genius. He takes something complicated and explains it so that I can understand.

[Full_Bush]

Was cool to see this being filmed in class. Props to Prof. Reich for publishing his courses on a free website

[lisas]

Thank you truly Professor Reich.

Fixed poverty is a malignant act of violence. How is poverty fixed? By the faulty poverty line.

The truth is the income of the working class, poor, working poor (& even the disappearing middle class) does not pair up with rent rates & the actual cost of living (decent, bare basic). The problem is the faulty poverty line.
When Mollie Orshansky (1960), formulated the basis of the poverty line, it was fixed upon meal plans of peanut butter (or the cheapest no frill emergency diet possible), for 3 meals a day.
This was an emergency diet, not a sustainable one. Thereby, the poverty line is fundamentally flawed.

As said the poverty line is based on the cost of an emergency diet, and it does not apply to every day life, neither is it sustainable.

Many Americans are struggling to pay rent, grocery, utilities & transportation expenses, at minimum.

However, if the poverty threshold line is corrected to reflect the actual cost of living, wages & support would increase for many everyday Americans.

Including more common sense supportive programs in place for small businesses, average households & college tuitions.

One solution could be for support (well supervised, audited support) be federally provided to qualifying employers, (this would be especially useful to small business owners) so that they can pay their employees an actual living wage that is relevant & reflective of the cost of living in real time.

People are scratching & struggling to survive, they’ve been robbed of hope & many are not going to go to work, at the risk of losing federal support, if they know that they cannot (on their own), meet the bare essentials to shelter, see a doctor when needed & feed themselves and their children.

No one should be forced to choose between being housed (having their rent paid through governmental aid) or choosing employment. The work wages will not pay for rent & basic needs.

Impoverished Americans are neither lazy nor crazy, it's called survival.

The bottom line is the stronger the working & middle classes are, the bolder the lift of the entire economy bearing down on their backs and shoulders will be.

Please make it a priority to address that the poverty line reflects actual, humane cost of living expenses (reflective of the respective city / state cost of living expenses).

Don’t make wages minimum, make them relevant (relevant wages are wages that are reflective of actual rent & mortgage rates & a healthy-basic cost of living).

We also need a proliferation of vocational training for youth and abled adults (of all ages).
I personally would like to see as many buses for (quality) vocational-training-sign-up as I did for COVID-19 vaccines, especially in low income areas.

The problem is that far too many Americans are ignorant to the poverty vacuum:

Thank you again Professor Reich. Your work is extensive & dedicated.

[toritori]

This is so amazing. I’ll never be able to get into (or afford) a school like Berkeley or Harvard. But I can “take courses” online for very little money or for free thanks to folks like Dr. Reich or EdX classes. 🥰