Former U.S. Secretary of Labor Robert Reich is professor of public policy at the University of California, Berkeley. The latest of his 13 books is “Aftershock: The Next Economy and America’s Future.” He recently sat down with Hank in his office to discuss the future of health care, the economy and unions. Here are highlights of the conversation.

What do you think health care will look like in this country five or 10 years from now?

The biggest question is over cost containment. A commission has been set up to look at ways of reducing Medicare costs, which are growing much faster than the federal budget capacity to deal with them. Inside the legislation are all sorts of demonstration projects and research projects to see how costs can be contained, but obviously no one knows whether they’re going to bear fruit.

What we do know is that medical costs vary wildly. And outcomes don’t vary nearly as wildly. So the conclusion to be drawn…is that different doctors and hospitals have different cost structures, prescribe differently, do different numbers of tests, and that a lot of those prescriptions and tests turn out not to be terribly effective.

What all that means is the hardest choices are still in front of us….I’d expect in the best of all worlds that you’d end up with more prepaid plans, like Kaiser; more plans that have an incentive to keep people healthy; and also more competition among prepaid plans, with patients or prospective policyholders having better quality information about prices and results. But who knows?

Where do you see the rest of the economy headed in the next five years?

There’s a huge structural problem in our economy, and it has to do with the vast middle class. Median wages have barely budged over the last 30 years, adjusted for inflation.

Though Wall Street excesses were the proximate cause of the Great Recession, they weren’t the basic cause. The basic cause had to do with the widening gap between the people at the top and the middle class in terms of income and wealth….That has caused the middle class to borrow more and more in order to maintain its standard of living…[including] for health care. But that borrowing is not sustainable, as we’ve seen tragically in the past two years.

What role can unions play in this economy?

Unions have a potentially hugely important role. But they are much diminished from what unions were three or four decades ago.

I believe unions will gain strength in the segment of the market that’s sheltered from international trade and that depends on personal service—health care, big retailers, major restaurant and hotel chains, and millions of other jobs whose numbers are growing even as the Great Recession has taken its toll.

I think unions will continue to raise the wages and improve the working conditions of people in health care, related industries and in the personal service segment of the economy overall. I hope unions also contribute to improving productivity and better outcomes, because certainly in health care that is a necessity.

What advice would you give to companies and unions trying to build partnerships?

It’s important that the partnerships be genuine partnerships. Sometimes the word partnership is thrown around carelessly. I know of some non-unionized hospitals that claim to have an excellent “partnership” with their employees, but if you look more closely you find that all the power and incentive is in the hands of management, and employees have very little role to play.

When it comes down to it, there are really only two ways of bargaining. One is zero sum—in which both sides assume that every gain they make is an equal loss to the other side—and positive sum, in which both sides are hoping to improve the overall size of the pie.

[In traditional bargaining] there are many games that can be played in terms of hiding the ball and bluffing. Hide and bluff is a classic way of getting a larger piece of the pie in a zero-sum situation. But it is disastrous if you want to build trust and improve the size of the pie overall.

So, honesty, transparency and trust are critical if you want to make a partnership work.