The Great Risk Shift —— The New Economic Insecurity and the Decline of the American Dream, Second Edition

It is a very interesting book that puts emphasis on how since the eighties there has been a displacement of the costs of handling risks from the society level to the individual level, leading to a more fragile and less secure society in income terms

Excellent writing, makes a rather dry topic super interesting and engaging. I highly recommend this text to anyone looking to get a better understanding of the American economy and public policy decisions. I can see myself referring back to this text often.

Jacob Hacker is Stanley Resor Professor of Political Science and Director of the Institution for Social and Policy Studies at Yale University. This book details the growing risks to jobs, family, higher education prospects, health care and retirement plans. Since the early 1970s rising income inequality and rising income instability have gone hand in hand. As he writes, “the story of the last few decades is the generalization of the income instability that once afflicted mostly the less educated and disadvantaged. Increasingly, more educated workers are riding the economic rollercoaster once reserved for the working poor.” “risks weren’t just rising among the poor and poorly educated; they were rising across the income spectrum, across the racial divide, across lines of geography and gender. … As private and public protections erode, workers and their families must bear a greater burden. This is the essence of the Great Risk Shift. Through the cutback and restructuring of workplace benefits, employers are seeking to offload more and more of the risk once pooled under their auspices, Facing fiscal constraints and political opposition, public social programs have eroded even as the demands on them have risen.” There is more social mobility in Canada and Sweden than in the USA. In Europe, only Britain and Italy have as little mobility across generations. In 1960 almost two-fifths of nonfarm jobs were in manufacturing industry. By 2015 only 9 per cent were. More than four fifths of nonfarm jobs were in services. Seven million manufacturing jobs were lost between 1979 and early 2017, more than half of them since 2000. To get elected, Trump promised a ‘far less expensive and far better’ health plan, which turned out to be a proposal to reverse the coverage gains under the Affordable Care Act. He promised to ‘save Medicare, Medicaid, and Social Security without cuts’. Medicaid bore the brunt of his proposed spending cuts. His main ‘achievement’ in his first year was a tax cut in which three-quarters of its benefits went to the richest one per cent of households. This guaranteed new fiscal pressure on popular social policies. His budget blueprints proposed slashing the programmes he had promised to ‘save … without cuts’. What is to be done? First, do no harm: no more austerity policies. Rebuild Medicare, insure higher education, provide security to expand opportunity.

Good analysis and presentation of weaknesses of some of the business practices that contribute to the great economic risk most of us face today despite living in a world that is vastly better and richer.