Free Newsletters [dotclear.gif] [dotclear.gif] IFRAME: http://www.cio.com/ads/728_ad.html?adsite= [dotclear.gif] [dotclear.gif] [dotclear.gif] [dotclear.gif] * Leadership * Enterprise * KM/Storage * Security * Industries * Sourcing * Technology * Career Budgeting CIO Executive IT Value Leadership & Management CRM E-Business ERP SCM Data Storage/Mining Intranet/Extranet Knowledge Management Government & IT Policy Legal Security & Privacy Financial Health Care Nonprofit Retail Outsourcing Staffing & Retention Emerging Technologies Infrastructure Wireless Career Counselor CIO Executive CIO Wanted Future CIO * CIO.com * Archives * Research * Viewpoints * Blogs * CIO Store * Newsletters * Search Jan. 15, 2001 Issue of CIO Magazine INTERVIEW: ROBERT REICH - Too Much of a Good Thing The new economy has lined our pockets, but it's also sped up our lives. Former Secretary of Labor Robert Reich offers ways to help deal with success. BY ALISON BASS Printer Friendly Version submit submit Subscribe to CIO Learn More... E-Business Research Center (www.cio.com/ research/ec/) From his perspective as a professor at Brandeis University, former policy maker Robert Reich looks at how the world is responding to the challenges of the new economy. ROBERT REICH USED TO LIVE TO WORK. As President Clinton's secretary of labor and a key member of his first-term Cabinet, Reich frequently (and gladly) put in 18-hour days. But one morning when he went to kiss his youngest son goodbye, it suddenly dawned on him how much of life he was missing. Like so many other high-flying achievers today, Reich no longer had time for anything that didn't have to do with work. That epiphany not only prompted a complete career change on Reich's part--he left Washington in January 1997 and became a professor of economic and social policy at Brandeis University in Waltham, Mass.--but it started him thinking about how many other people were in the same boat. And that led him to a larger truth: The dizzying pace of economic change is not only compromising the quality of our lives, but it also may be hurting us as a society. If left unchecked, it could spawn a backlash against the very pillars of economic growth: globalization and free trade. That realization inspired Reich's latest book, The Future of Success, published in January 2001 by Alfred A. Knopf. One drizzly afternoon last fall, Reich sat in the parlor of his sprawling but understated home near Harvard Square in Cambridge, Mass., and talked about the price he and many other Americans are paying for their affluence as well as what we, collectively and as individuals, can do to make our lives more sane. CIO: We know all about the fruits of the economic boom: the fabulous deals, the good salaries, the wonderful perks, especially if you're a coveted IT professional. But what do you see as the downside of the new economy? Advertisers IFRAME: http://www.cio.com/ads/IMU_ad.html?adsite= [;abr=!ie;pos=center;sz=336x280;tile=4;ord=10232006204940?] Reich: In the new economy, there is more choice than ever for consumers, and it's never been easier to switch products and brands. But that means that all the producers and sellers have to hustle harder to keep every consumer and attract new ones. But who are the sellers and producers? It turns out they are us too. We are the ones who have to hustle harder to do it better, faster, cheaper than our competitors. Competition is more intense than ever, and people are feeling that in their daily lives. Data shows that most Americans are putting in many more hours than before, and that's especially true of people who are at managerial and professional levels. The great irony is that the more money you earn, the more pressure you are under and the more frenzied your lives are. Is the bogeyman here corporate America? Many people take it out on corporations. But in truth, companies are simply responding to this new competitive environment in which they have to continually innovate toward cheaper and better products The great irony is that the more money you earn, the more pressure you are under and the more frenzied your lives are. -ROBERT REICH and services--and do it faster than anyone else or they are going to be out of business. The new economy is also pushing companies to reduce all routine costs, including the cost of routine labor. So if you can do the same thing more cheaply by relying on a subcontractor or a robot or a foreign company, then you'll do so. But at the same time that companies are competing ever more fiercely to get "talent"--the new creative workers of the economy--and paying more and more for them, they're reducing the cost of routine labor. You don't have to be a rocket scientist to see that inequality will follow. So what do we do about all this, given that it might be impossible to slow down the economic juggernaut? First of all, people have to make hard choices--as individuals, about what they are willing to give up in order to slow down their lives. But they must understand that the challenge of slowing down is more formidable today than it was years ago. And there is more to it than individual choice. We have some very large social decisions to make about the kind of culture we want to come out of this new economy. To give you one example, in the old industrial economy, we came up with something called unemployment insurance to tide people over during dips in the business cycle. But now, the greatest threat to income security is not periodic recession and layoffs. It's sudden changes in the economy that may cause people to be laid off for good or make their skills obsolete. So what we need instead of unemployment insurance is earning insurance that would tide somebody over for a couple of months. The insurance would offer half of the difference between the old higher salary and the new lower salary that the person might receive at another job, to give them a chance to change their skills, locations, even livelihoods. What's something else we can do to buffer people against the whiplash of economic change? Often these days, entire communities are buffeted by economic change. They lose major employers, the tax base starts eroding, imports take away their major businesses. We need a form of what might be called "community insurance." We don't want to stop capital from moving rapidly around the globe; that would shoot us all in the foot. But if we're going to avoid a backlash against globalization and the free movement of capital, we've got to make sure that communities don't bear the full brunt of sudden change. To pay for such insurance, we could enact a very, very tiny transaction fee on the movement of capital--maybe one-half or even one-tenth of 1 percent. That would go directly into an insurance fund that would be available for communities that lost 15 percent of their economic base in a given year for such things as retraining, reallocating, infrastructure, or attracting and incubating new businesses. Also, many families are spending a lot of money on child care because both parents work. It's high time we understood that child care is, in effect, a cost of doing business. Businesses should be encouraged--perhaps required--to offer parents flexible time to do their work and paid leave to care for a young child or an elderly relative in need. Any parent who decides to remain at home with a child under the age of 3 should be eligible for financial support equal to half the nation's median income. Such support could come in the form of refundable tax credits. You can find a long list of examples in my book. The point is to find ways to ease the transition of people through changes that are the hallmark of the new economy so that they can lead more humane lives. You see, that's the real issue here. As consumers and investors, we've got it made. But the truth is we're not just consumers and investors; we are also working people. We have families, relationships and connections to loved ones. We have friends. These other roles deserve and require at least as much attention as our role as workers. We've got to organize ourselves so that the new economy works for us. We don't have to be slaves to technological trends. That all sounds great. But given how overworked many Americans are, how will we as a nation have the will to effect these kind of changes? Oh, I'm very optimistic about our capacity for change. And I've lived half my life in the public sector. You would think I would be more cynical. But I have only to look at the history of this country to see how resilient we are--look at the early days of industrialization, for example. Americans in the late 1800s and the beginning of the 20th century faced a huge challenge, of a newly industrialized economy that featured factory work. And suddenly, we had to deal with issues like child labor, sweatshops, worker safety and the lack of social insurance when a breadwinner suddenly died, because we were no longer in communities that could take care of us. The gap between the rich and the poor was widening; we had very large numbers of new immigrants. The parallels between that era and this one are very striking. For example, 100 years ago people muttered that it would be impossible to get this country to change its ways; politics was in the hands of special interests, people were very cynical about government. And yet somehow, we got on with what needed to be done. We passed laws barring child labor, providing safe workplaces, creating social insurance. We cleaned up our tenements, and we created an educational system that extended from kindergarten through 12th grade. We did a huge number of things to adapt ourselves to the industrial order, and we can do the same thing again. And what happens if we don't? Frankly, I don't see us going in the same direction we're going without some sort of upheaval. For example, there's already a backlash brewing against globalization. We saw just the tip of that iceberg in Seattle last year. According to polls, a majority of Americans say they think free trade is bad for America. If we don't respond to The Luddites may rise up and try to stop technological change. Don't assume they can't. -ROBERT REICH people's concerns, we could have a backlash in which many of the fruits of economic dynamism are lost to us. The Luddites may rise up and try to stop technological change. Don't assume they can't. Periodically in history we've had fundamentalist uprisings in which civilization has been shoved backward in time. So it's in the interests of corporations and people at the top to ease the transitions of workers into this new economy. I think once people understand why we are in the predicament we are in--and that's why I've written this book--they'll do something about it. When Americans understand the nature of a problem, we tend to roll up our sleeves and get on with whatever has to be done. end How do you measure the price of success? Tell Senior Editor Alison Bass at abass@cio.com. PHOTOGRAPH BY GEORGE SIMIAN Printer Friendly Version submit submit Subscribe to CIO In this Issue of CIO: [Select Below......................................] http://www.cio.com/CIO CIO Magazine - Jan. 15, 2001 © 2001 CXO Media Inc. http://www.cio.com/archive/011501/reich.html SPONSORED LINKS: [exclusive;pos=text;sz=1x1;tile=20;ord=?] IDG Research Report Reveals CIO Visibility Blind Spot for Application Development Investments Your Linux is ready(tm). Get SUSE Linux Enterprise 10 from Novell (r) What's crucial to you in a server solution? Take a short survey & get a $25 Amazon gift card. Start building your business case for SOA. Download webMethods how-to book! Solaris 10. Free & Open Source. Like printing money in your datacenter. www.sun.com/solaris/domore Getting eBusiness Right: Key Strategies and Implementation Tips Comprehensive Enterprise Risk and Compliance Solutions from EMC, BEA, Fujitsu and Paisley Sun announces new virtualized datacenter - Project Blackbox. Learn more. Sun announces new virtualized datacenter - Project Blackbox. Learn more. Sun announces new virtualized datacenter - Project Blackbox. Learn more. FREE IDG Research Report: Measuring the Value of Application Development The Web Application Management Struggle. View this Webcast Now! Coordinate and align development process to release higher quality software, faster. Eradicate the problems that keep your development out-of-sync with IBM Rational Software Quality Solutions. Sun announces new virtualized datacenter - Project Blackbox. Learn more. Protect your business today! Make your network secure, fast and reliable with Radware Don't just let your data sit there. Make it actionable - quickly, simply, affordably. A closer look at data backup vs. data archiving Analyze 1 billion transactions... in 3 seconds. Find out how. IT Strategies to Simplify, Accelerate, and Grow Your Business Leverage investments with eBusiness to reach customers and partners. Learn More Now! Wouldn't you rather know how to protect your software at the source? Dollars and Sense: Calculate the ROI Orange solutions can bring your business Learn how to get IT staff without breaking the budget Introducing the HP BladeSystem c-Class server. Now you can set IT free. Sun announces new virtualized datacenter - Project Blackbox. Learn more. Meet government and audit regulations with compliance management that helps turn requirements into strategic advantages. Protect your business integrity with proper compliance. Management solutions help you take back control with IBM Tivoli. Three Things Business Decision-Makers Need To Know About SOA White Paper Taming the Hybrid Beast: Strategies for CIOs to reduce operational overhead and focus more on innovation Get more out of mobility. Get more out of now. Over 3,400 retail businesses use our scalable solutions - like category management and forecast & replenishment applications - to increase their responsiveness, flexibility, and profits. Learn More at sap.com/speaks-retail Build an intelligent tiered storage infrastructure Get The Facts on BlackBerry Wireless Solutions for Business Novell/Intel Linux-solutions at Virtualization Knowledge Center. Sun announces new virtualized datacenter - Project Blackbox. Learn more. Learn how top CIOs use ITVM to run huge IT organizations like a business Effective RDBMS Security Management: A Process-Based Solution Control change, don't just manage it! Learn how in this webinar. The relationship between business and IT is changing. Learn more at NextGenerationInsights.com Service-oriented Enterprise - How to Make Your Business Fast, Flexible, More Responsive IT Rationalization: Siemens(r) Approach to IT Transformation CIO magazine chief information officer ERP strategy IT research analysis business technology management e-business knowledge management intranet CRM cio.com CRM customer relationship management e-business ERP enterprise resource management leadership management measuring IT value outsourcing supply chain Home | About CIO | Privacy Policy | Terms of Service | Linking to us Subscription Services | Reprints | Advertising | Executive Programs THE IDG NETWORK CSO | CMO | Darwin | Computerworld | Network World | Infoworld | PC World | Bio-IT World IT Careers | ITWorld Canada | JavaWorld | Macworld | Mac Central | Playlist | GamePro | GameStar | Gamerhelp © 1994 - 2006 CXO Media Inc. An International Data Group (IDG) Company Problems/complaints/compliments about this site can be sent to info@cio.com.