Employee Benefit Adviser Interviews Jacob Hacker on Middle Class

Communications — Fri, 01 Jun 2007 13:15:00 -0400

New America in the News:

Many Americans appear to be doing fine. They’ve got nice cars. They’ve got good jobs. They’ve got families. But they also have an abysmal savings profile and mountains of debt. The slightest disruption — a job loss or health incident — can and does destroy the perceived image of American middle class harmony.

In “The Great Risk Shift,” author Jacob Hacker details how beneath the shiny hardwood flooring of America’s middle class there is a rotted infrastructure that is ready to give out at any moment. He says that in order to prevent such a catastrophe workers need to spurn the ownership society, which heralded the loss of stable retirement benefits and comprehensive health care coverage, and reclaim the hallmarks of security and opportunity that have slowly decayed over the last 50 years.

“We’re losing the language of security and it’s time to reclaim it,” Hacker recently told Employee Benefit Adviser during a telephone conversation with Editor Robert L. Whiddon. Hacker, a professor of political science at Yale University, argues that universal 401(k)s, an expanded Medicare program and individual stop-loss insurance — to protect middle class workers from severe disruptions in earnings or catastrophic health care expenses — are necessary to ensure a prosperous and secure American workforce.

Q:You seem very young to write this book. Unlike many Gen Xers (myself included) you refuse to simply give up on the notion of a traditional “retirement.” The book ends by exhorting readers to get mad, get wise and get even.

A: What you describe, your attitude of resignation and acceptance is true of a lot of people in our generation. If you look at the polling, the people that are most up in arms about the loss of secure retirement benefits, the decline of comprehensive health benefits or rising college costs are people actually in the generation ahead of us who have seen both sides of the equation and who feel like something is being lost. Whereas you look at young Americans, particularly Gen Y if you will, people in the youngest age group in the labor market are resigned and indeed feel as if they just have to construct their own life independent of these promises.

What I’m trying to do in the book is say, look we’re at a pretty critical turning point and we can either accept that we are going to lose any guarantee of security and we’re all going to try and make it on our own, or we’re going to try and reclaim some of the best elements of that tradition...

For the complete interview, please visit the Employee Benefit Adviser website.