The Real Issue is Risk

Having just finished a book entitled The Great Risk Shift: The Assault on American Jobs, Families, Health Care, and Retirement -- And How You Can Fight Back, I have no doubt that Stephen Rose will accuse me of offering a "message of misery." My defense, already laid out in greater length on the website of "The Democratic Strategist" in response to three of Rose’s colleagues, is that political candidates and leaders should, first and foremost, offer a message of truth. And the truth is that, after a generation in which more and more economic risks have been shifted onto the shoulders of hardworking middle-class Americans, the middle class is insecure and in need of a serious agenda of economic change.

Rose offers up a good deal of statistics to show that American incomes are higher than in the past -- which is hardly in dispute (though I am not sure how cheered most middle-class families will be to discover that their incomes would have risen by less than 10 percent in a quarter century if family work hours had stayed constant.) But, ironically, since he has carefully analyzed income dynamics in the past, Rose is almost completely silent about the biggest and most important trend: the rising risk to the economic well-being of families posed by the post-1970s transformation of our economy, including the substantial decline of employer and governmental policies of insurance (which Rose vastly understates). As I show in my book, the size of year-to-year swings of family income has skyrocketed since the early 1970s. Meanwhile, the chance that families will experience large income drops has risen dramatically. Indeed, this sort of instability -- how far people move up and down the income ladder over time -- has grown much faster than income inequality -- the gap between people on different points on the income ladder. And while low-skilled workers have long borne the brunt of these changes, the educated are getting hit harder and harder. People who went to college now experience as much income instability as people without a high-school degree did in the 1970s.

This risk is completely invisible in most of the statistics that Rose cites (and, indeed, in most of the statistics that economic commentators routinely throw about). But it is at the heart of the increasingly negative verdict of most Americans -- and, yes, married Americans with degrees and kids -- about the direction of the economy. And it is the issue with the greatest potential to unify Americans across lines of class, race and education behind a new economic agenda that provides a basic foundation of security so as to guarantee true opportunity. It is also, not incidentally, the issue with the greatest potential to create a powerful new coalition behind the Democratic Party -- that is, if the party shakes off its timidity and speaks to Americans’ growing concerns in a way that is both true to their legitimate worries and faithful to their fundamental aspirations.

Debating the Middle

Just how is the middle class faring in the modern American economy, and how should progressives tailor their message and program accordingly? TAP Online is hosting an ongoing debate, with contributions by Stephen Rose, Lawrence Mishel, Jeff Madrick, Jacob Hacker, and others.