'Even Henry Ford understood' that underpaid workers 'don’t have money' to buy things: ex-labor secretary

'Even Henry Ford understood' that underpaid workers 'don’t have money' to buy things: ex-labor secretary
LOS ANGELES, CA - NOVEMBER 5: Former U.S. Secretary of Labor Robert Reich speaks to Occupy Los Angeles protesters after the Move Your Money March through the downtown financial district during what is being called Bank Transfer Day, on November 5, 2011 in Los Angeles, California. Occupy movement members are calling for people to move their money from banks to credit unions today in support of the 99% movement. (Photo by David McNew/Getty Images).

Former United States Secretary of Labor and Carmel P. Friesen Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkeley Robert Reich told MSNBC host Ali Velshi on Sunday that "even Henry Ford understood" that businesses cannot be profitable if employees are so underpaid that they have no disposable income.

Reich's remarks come on the third day of the United Auto Workers Union strike. Big Three employees are demanding higher wages and better workplace conditions as manufacturers rake in massive profits.

"It's shocking when you look at 1969 — 1969, the average weekly non-supervisory wage — that's the wage for people who are not managers and not supervisors, was higher adjusted for inflation than it is today," Reich said. "And so you have an economy that over the last forty to forty-five years, fifty years, has done wonderfully well overall, has exploded. It's about two and a half times what it was then. But the typical worker, the non-supervisory worker, the worker on the frontline is actually worse off, in terms of real purchasing power, in terms of, you know, non-inflationary, adjusted for inflation."

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Reich continued, "Well, this is ridiculous. We used to have an economy that worked for everybody. Now we have an economy that works for people at the top — the big investors and the CEOs and the top executives. That's not only unfair — it doesn't even sustain itself because where are all of the consumers going to come from if people don't have money in their pockets? Even Henry Ford understood this, you know, at the start of the last century. That's why he gave everybody in Ford a raise. Because he understood that, 'Where are the people gonna come from to buy the new Model T Fords if they don't have money in their pockets?'"

Reich added, "I think that we have gone totally off course. We now have a two-tiered structure of the economy. And this is not only unfair, it's bad for the economy overall."

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READ MORE: Auto worker strike 'likely' due to 'insulting' offers from Big Three car companies: ex-labor secretary

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