Economic Insecurity

Economic Diversification

adminn — Mon, 31 Dec 2007 10:23:00 -0500

Harry Markowitz’s 1952 essay Portfolio Theory broke new ground in developing ways to diversify financial portfolios. By the time he won the Nobel Prize nearly four decades later, countless financial innovations to help spread risk had been introduced, making the risks associated with investing more acceptable -- particularly to the American middle class. Sure the markets are taking a hit now, but those with diversified portfolios are certain to weather this downturn better than those without.

U.S. economic public policy would benefit from a similarly innovative approach to managing risk. The economy is facing growing pains that go deeper than just… more

Inequality Has Run Amok. Do Leaders Care?

Articles — Wed, 27 Jun 2007 13:57:00 -0400

When pets are poisoned by imported pet food or U.S. attorneys are fired under suspicious circumstances, Congress gears up hearings and vows quick action. A far greater scandal, however, has hardly gained the interest of legislators or the presidential candidates. That is the increasing wealth gap between the rich, the middle class and the poor, which is reaching alarming proportions.

The top 10% of income earners in the United States now owns 70% of the wealth, and the wealthiest 1% owns more than the bottom 95%, according to the Federal Reserve. In 2005, the top 300,000 Americans enjoyed about the same… more

No Worker Left Behind

Workforce and Family — Fri, 15 Jun 2007 07:00:00 -0400

Why aren’t Republican presidential candidates talking more about job training?

Wherever they go on the campaign trail, candidates are asked about off-shoring, layoffs, and wages. Despite the strong U.S. economy and near full employment, middle class anxiety is real.

Hardly a day goes by that some Democratic candidate doesn’t speak about the struggles of the middle class family in the age of globalization.Democrats campaigned last November on responding to working family angst through a minimum wage increase. Republicans often respond that they would help at-risk workers through job skills, yet they lack specifics.

If they believe skills are the answer, it’s… more

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.

Future for Los Angeles Middle Class is Uncertain

Articles — Fri, 13 Apr 2007 17:12:00 -0400

You may remember the ruckus that arose a couple of years ago when a local Spanish-language television station, Channel 62, put up a billboard publicizing its newscasts. Next to the words "Los Angeles," the abbreviation "CA" was crossed out and "Mexico" written in its stead.

Many reacted angrily, saying the sign was glorifying illegal immigration. Others accused the complainers of being racist xenophobes and maintained that the ad was simply celebrating the region’s Latino flavor.

Whatever you thought of the promotion, I’m here to tell you: We are, in at least one sense, perilously close to becoming Los Angeles, Mexico.

I am… more

Is Success Killing South Koreans?

Articles — Sun, 11 Mar 2007 17:31:00 -0400

Three weeks ago, 39-year-old Hyang Sun Lee of Fullerton allegedly tried to set her three children and husband ablaze after she doused them with lighter fluid while they slept. Though she didn’t succeed, police said, within the last year, three other Korean immigrant parents in Southern California did.

News reports invariably point to economic hardship and the difficulties of immigrant adjustment as the source of the parents’ despair. And clearly they were factors. But real answers to these incidents are more likely to be found 6,000 miles from Los Angeles, in Seoul.

Although family murder-suicides are rare in South Korea, the… more

A Town That Wants Illegal Immigrants

Articles — Sun, 11 Feb 2007 04:32:00 -0500

Lindsay, Calif. -- The immigration debate can get pretty sloppy and emotional in the abstract, but not here in this Central Valley town that can’t afford to let simplistic rhetoric overshadow facts. Last month’s devastating citrus freeze has put Lindsay, population 11,185, in dire economic straits; but its pragmatic response to the crisis sets an example for the rest of the nation.

The packing houses here in the heart of California’s citrus belt are generally hopping the first week of February. In a normal year, the two LoBue Bros. plants would be open 50 to 60 hours a week, employing 230… more

Jacob Hacker's Testimony Before the House Ways and Means Committee on the Economic Challenges Facing Middle Class Families

adminn — Wed, 31 Jan 2007 17:38:00 -0500

A Fair Way to Shrink the Wealth Gap

Articles — Wed, 24 Jan 2007 20:26:00 -0500

SEATTLE & SAN FRANCISCO -- The new Democratic-led Congress has already made great strides on its ambitious legislative agenda. From hiking the minimum wage to cutting interest rates on student loans, Democrats have won impressive bipartisan support for their legislative goals.

Not included on the agenda, however, is any proposal designed to address what may be the most fundamental problem facing America right now: an alarmingly high degree of inequality.

Currently the top 10 percent of income earners in the US own 70 percent of the wealth, and the wealthiest 5 percent own more than the bottom 95 percent, according to a… more

The New Economic Insecurity -- And What Can Be Done About It

Articles — Wed, 17 Jan 2007 03:56:00 -0500

Over the past generation, the economic risks American families face have increased substantially. Yet public programs have largely failed to adapt to these new and newly intensified risks, and private workplace benefits have eroded. As a result, Americans increasingly find themselves on an economic tightrope, without an adequate safety net if, as is ever more likely, they lose their footing. This tightrope both creates anxiety about the future and causes hardship when families do lose their balance. But importantly, it also threatens opportunity by making it more difficult for families to feel sufficiently secure to look confidently toward the future… more