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The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream
On the eve of the financial crisis, Jacob S. Hacker wrote "the policy book of the year" (E.J. Dionne, Jr., Washington Post), demonstrating and explaining the hidden story of growing economic insecurity. In this fully revised and updated second edition, he brings his powerful expos� of "The Great Risk Shift" up to date with startling new evidence and compelling new ideas. Hacker shows that the safety net was unraveling long before the late-2000s, as more and more economic risk shifted from the broad shoulders of government and business onto the fragile backs of American families. Whether the problem is risky jobs brought on by corporate restructuring and the "gig economy" of contingent work, risky families created by the rising costs and instabilities of parenthood, risky retirement caused by the collapse of traditional guaranteed pensions, or risky health care fueled by skyrocketing costs and unstable coverage-Hacker shows what has changed and why, the ways in which ordinary Americans have been affected, and how we can fight back. Behind the risk shift, he contends, is the "Personal Responsibility Crusade" eagerly embraced by corporate leaders and conservative politicians who speak of an economic nirvana in which Americans are free to choose. But the result, Hacker reveals, has been very a harsh new world of economic insecurity in which far too many Americans are allowed to fall behind. Blending powerful human stories, big-picture analysis, and compelling ideas for reform, this remarkable volume has become a rallying point in the struggle for economic security in an increasingly uncertain world.
261 pages, Kindle Edition
First published August 25, 2006
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October 4, 2011
The Great Risk Shift by Jacob Hacker is a useful and prescient work that sheds light on the panorama of inequality, insecurity, and hardship that confronts millions of workers and their families in the United States. It displays all of the virtues of the liberal approach to policy analysis that the book epitomizes - as well as its limitations.
My studies have made me intimately familiar with the explosion of socioeconomic inequality that has occurred in the U.S. over the last thirty years. Before reading The Great Risk Shift, however, I was not nearly as aware of the depth or the extent of income instability confronting countless workers, even those with relatively high levels of education and skills. Hacker’s discussion of this disturbing phenomenon will allow me to approach questions of socioeconomic inequality with a more fine-grained lens that takes into account the complexities hidden beneath some of the most prominent social indicators such as the unemployment rate and the labor market participation rate.
Hacker should also be applauded for his subtle analysis of the relationship between state and market under neoliberalism. Scholars across the political spectrum tend to equate the neoliberal turn that began in the 1970s with the wholesale withdrawal of the state from economic intervention and the reorganization of the political economy around the free market. But as Hacker convincingly demonstrates, one cannot draw a sharp distinction between state and market because the former creates the legal and political framework within the latter operates. The displacement of traditional pensions by 401(k)s, welfare reform, the establishment of privatized Health Savings Accounts, and all of the other policy innovations pursued by neoliberal politicians from both political parties could only have been accomplished through the deployment of state power on a massive scale. The devotees of what Hacker calls the Personal Responsibility Crusade may speak the language of libertarian anti-statism, but have not hesitated to use government to undermine the social insurance systems bequeathed by the New Deal in order to further their agenda.
While Hacker offers a wealth of detail regarding the vast social and economic dislocations wrought by the great risk shift, like may other analysts who occupy a similar ideological position he fails to offer an effective account of why it ever took place. The neoliberal turn did not occur simply because conservative policy intellectuals and strategists were able to win political leaders to their ideological perspective, as Hacker’s account tends to imply. The ideas and policy innovations proposed by people like Martin Feldstein, Stuart Butler, and Milton Friedman gained a hearing because Keynesian policy was simply not able to adequately manage the political and economic developments it summoned into existence. Hacker does briefly comment on the contribution of increased domestic and international competition toward the decline of the postwar order, and that is an important part of the story. But above all, the neoliberal project sought to reestablish the political, economic, and ideological power of a capitalist class whose dominance was threatened by the growing power of the organized working class and mass social unrest. In the kind of full (or near-full) employment economy that existed in the late 1960s, labor’s workplace and marketplace power vis-a-vis capital vastly increased. Workers used their favorable position to push for ever higher wages and benefits, which cut into corporate profits and contributed to spiraling inflation. In some cases, workers even pushed for a measure of control over the production process itself. Labor discipline broke down throughout the economy, as the late 1960s and early 1970s witnessed the emergence of a major strike wave throughout North America and Western Europe. Many rank-and-file workers rebelled not only against their bosses, but their unions and the peace settlement they concluded with capital during and after World War II. Keynesianism ceased to deliver the goods, and the neoliberals entered the breach to offer intellectual and political support to a newly organized and militant capitalist class, which proceeded to bust unions, reorganize production in ways that undermined worker power, and assert its dominance over the political system through massive lobbying and campaign contributions. The great risk shift is the bitter fruit of this project.
In building his analytic framework around the category of risk instead of the dynamics of class power, Hacker conflates symptoms with causes and fails to offer a compelling explanation of why the widespread social insecurity he details ever came into existence in the first place. The consequences of this failure are readily apparent in the book’s concluding chapter. He calls on his readers to “get mad” at the powerful interests that have damaged the lives of so many, but spends more time offering personal financial advice than detailing a strategy that could rebuild the power of working people and reverse the great risk shift. Many of the policy proposals Hacker details are certainly worthy of support. But without a sense of political agency or strategy, we’re left to plead ineffectually before a regime that appears to be thoroughly captured by corporate power. This is why Hacker finds the lack of interest by political and corporate leaders in redressing the great risk shift to be so “puzzling,” when the reasons behind their apparent lassitude should be clear as day.
My studies have made me intimately familiar with the explosion of socioeconomic inequality that has occurred in the U.S. over the last thirty years. Before reading The Great Risk Shift, however, I was not nearly as aware of the depth or the extent of income instability confronting countless workers, even those with relatively high levels of education and skills. Hacker’s discussion of this disturbing phenomenon will allow me to approach questions of socioeconomic inequality with a more fine-grained lens that takes into account the complexities hidden beneath some of the most prominent social indicators such as the unemployment rate and the labor market participation rate.
Hacker should also be applauded for his subtle analysis of the relationship between state and market under neoliberalism. Scholars across the political spectrum tend to equate the neoliberal turn that began in the 1970s with the wholesale withdrawal of the state from economic intervention and the reorganization of the political economy around the free market. But as Hacker convincingly demonstrates, one cannot draw a sharp distinction between state and market because the former creates the legal and political framework within the latter operates. The displacement of traditional pensions by 401(k)s, welfare reform, the establishment of privatized Health Savings Accounts, and all of the other policy innovations pursued by neoliberal politicians from both political parties could only have been accomplished through the deployment of state power on a massive scale. The devotees of what Hacker calls the Personal Responsibility Crusade may speak the language of libertarian anti-statism, but have not hesitated to use government to undermine the social insurance systems bequeathed by the New Deal in order to further their agenda.
While Hacker offers a wealth of detail regarding the vast social and economic dislocations wrought by the great risk shift, like may other analysts who occupy a similar ideological position he fails to offer an effective account of why it ever took place. The neoliberal turn did not occur simply because conservative policy intellectuals and strategists were able to win political leaders to their ideological perspective, as Hacker’s account tends to imply. The ideas and policy innovations proposed by people like Martin Feldstein, Stuart Butler, and Milton Friedman gained a hearing because Keynesian policy was simply not able to adequately manage the political and economic developments it summoned into existence. Hacker does briefly comment on the contribution of increased domestic and international competition toward the decline of the postwar order, and that is an important part of the story. But above all, the neoliberal project sought to reestablish the political, economic, and ideological power of a capitalist class whose dominance was threatened by the growing power of the organized working class and mass social unrest. In the kind of full (or near-full) employment economy that existed in the late 1960s, labor’s workplace and marketplace power vis-a-vis capital vastly increased. Workers used their favorable position to push for ever higher wages and benefits, which cut into corporate profits and contributed to spiraling inflation. In some cases, workers even pushed for a measure of control over the production process itself. Labor discipline broke down throughout the economy, as the late 1960s and early 1970s witnessed the emergence of a major strike wave throughout North America and Western Europe. Many rank-and-file workers rebelled not only against their bosses, but their unions and the peace settlement they concluded with capital during and after World War II. Keynesianism ceased to deliver the goods, and the neoliberals entered the breach to offer intellectual and political support to a newly organized and militant capitalist class, which proceeded to bust unions, reorganize production in ways that undermined worker power, and assert its dominance over the political system through massive lobbying and campaign contributions. The great risk shift is the bitter fruit of this project.
In building his analytic framework around the category of risk instead of the dynamics of class power, Hacker conflates symptoms with causes and fails to offer a compelling explanation of why the widespread social insecurity he details ever came into existence in the first place. The consequences of this failure are readily apparent in the book’s concluding chapter. He calls on his readers to “get mad” at the powerful interests that have damaged the lives of so many, but spends more time offering personal financial advice than detailing a strategy that could rebuild the power of working people and reverse the great risk shift. Many of the policy proposals Hacker details are certainly worthy of support. But without a sense of political agency or strategy, we’re left to plead ineffectually before a regime that appears to be thoroughly captured by corporate power. This is why Hacker finds the lack of interest by political and corporate leaders in redressing the great risk shift to be so “puzzling,” when the reasons behind their apparent lassitude should be clear as day.
December 24, 2019
Hacker wrote this book over a decade ago (this is a second edition), and it's even more relevant now in our gig economy. Hacker espouses expanded social insurance programs, a return to pensions and benefits (rather than an over-reliance on 401Ks and the like) and taxing the rich--spreading out economic risks rather than putting it all on workers.
October 15, 2011
Everyone is trying to figure out, in light of the ongoing economic crisis, just what it is that happened to the American economy over the last 30 to 40 years. We can give approximate dates as baselines for many of the trends that lead to the present crisis: in terms of economics, the late 70s and the early 1980s saw a profound mutation in the configuration of the global economy as the United States ceased to be the lone and outsized industrial economy of the postwar world; during the same period, the rise of Neoliberal economic thought and a renaiscent conservative movement provided an intellectual framework for understanding and facilitating that very transformation.
We are now at a point in time from which we can assess a number of these long-term trends with greater clarity than ever before. The slogan of the Occupy Wall Street movement -- "We are the 99%" -- is one early assessment of the period that seems to be coming to a close, emphasizing in a compelling way the dramatic income inequality that has been one conspicuous outcome. There are other measures, too, many of which are well known. American household incomes have remained, on average, flat (despite the shift from single- to dual-earners as women entered the workforce). Rates of social mobility have declined. Levels of household debt have risen, as have corporate savings. Manufacturing has declined in terms of numbers employed and overall revenues, while finance has swollen to be the largest single sector of the American economy, though it has fallen from its pre-crisis height.
Less well-known is a trend that Jacob Hacker suggests underlies and goes far towards tying together many of the others: the "great risk shift." The idea of risk is an actuarial concept, and it is one of the technical and philosophical foundations of programs of "social insurance", or the modern welfare state. The key idea behind social insurance, or insurance of any kind, is that risk is made manageable by spreading it as widely as possible among pools of exposed individuals. The larger the pool, the lower the risk. Where economic risk -- such as sudden loss of income, unexpected or chronic illness, indebtedness, or a shifting market for specialized skills -- was previously born chiefly by governments and private sector employers, the last 30 years have seen a shift of the risk burden from these bodies to individuals.
Hacker's central point is that this shift in risk has resulted in a raft of underreported trends that belie an overall increase in *insecurity*. Bankruptcies are much more common now than they were in 1960; a greater percentage of homes are foreclosed on (the book, published in 2006, does not refer to the subprime crisis), more people are in debt, and what Hacker calls income volatility is higher than before. This last measure is the book's most compelling. A person's chances of falling into poverty are greater now than they have been in over a generation. The opportunity to strike it rich does exist, but the risks that accompany failing to do so are also greater than before. Unemployment insurance, designed in the 1930's, is no longer adequate to the new world of changing technology, part-time work, and long-term unemployment. Medicare undermines itself by covering only the old and infirm (the most expensive insureds), leaving the private sector to cover the young or those who can afford the premiums. There is very little safety net for couples who have to withdraw from the workforce to start families; and the list goes on. Falling through any of the cracks in this patchwork system of social insurance is more and more likely for more and more people.
In short, the burdens of protecting individuals against blind swipes of fate - the obsolescence of a job skill, sickness of a family member - have been unloaded from larger entities more able to absorb the shocks and onto individuals, assigning to them the role of risk managers for their own financial security. This is a rejection of the very idea of insurance - or rather, in parallel with the evolution of the broader economy, its 'financiarization' - the idea of insurance being to distribute risk among a very large group of people so that the costs of ill fortune to any individual are not so great that that person is overwhelmed.
Hacker suggests that the anxiety generated by this assumption of greater risk is behind widespread pessimism about the American economy. It is the experiential, psychological side of the well-known graphs plotting the inequality of income or wealth. It is most likely also the source of the profound sympathy of so many with the Occupy Wall Street protest movement.
We are now at a point in time from which we can assess a number of these long-term trends with greater clarity than ever before. The slogan of the Occupy Wall Street movement -- "We are the 99%" -- is one early assessment of the period that seems to be coming to a close, emphasizing in a compelling way the dramatic income inequality that has been one conspicuous outcome. There are other measures, too, many of which are well known. American household incomes have remained, on average, flat (despite the shift from single- to dual-earners as women entered the workforce). Rates of social mobility have declined. Levels of household debt have risen, as have corporate savings. Manufacturing has declined in terms of numbers employed and overall revenues, while finance has swollen to be the largest single sector of the American economy, though it has fallen from its pre-crisis height.
Less well-known is a trend that Jacob Hacker suggests underlies and goes far towards tying together many of the others: the "great risk shift." The idea of risk is an actuarial concept, and it is one of the technical and philosophical foundations of programs of "social insurance", or the modern welfare state. The key idea behind social insurance, or insurance of any kind, is that risk is made manageable by spreading it as widely as possible among pools of exposed individuals. The larger the pool, the lower the risk. Where economic risk -- such as sudden loss of income, unexpected or chronic illness, indebtedness, or a shifting market for specialized skills -- was previously born chiefly by governments and private sector employers, the last 30 years have seen a shift of the risk burden from these bodies to individuals.
Hacker's central point is that this shift in risk has resulted in a raft of underreported trends that belie an overall increase in *insecurity*. Bankruptcies are much more common now than they were in 1960; a greater percentage of homes are foreclosed on (the book, published in 2006, does not refer to the subprime crisis), more people are in debt, and what Hacker calls income volatility is higher than before. This last measure is the book's most compelling. A person's chances of falling into poverty are greater now than they have been in over a generation. The opportunity to strike it rich does exist, but the risks that accompany failing to do so are also greater than before. Unemployment insurance, designed in the 1930's, is no longer adequate to the new world of changing technology, part-time work, and long-term unemployment. Medicare undermines itself by covering only the old and infirm (the most expensive insureds), leaving the private sector to cover the young or those who can afford the premiums. There is very little safety net for couples who have to withdraw from the workforce to start families; and the list goes on. Falling through any of the cracks in this patchwork system of social insurance is more and more likely for more and more people.
In short, the burdens of protecting individuals against blind swipes of fate - the obsolescence of a job skill, sickness of a family member - have been unloaded from larger entities more able to absorb the shocks and onto individuals, assigning to them the role of risk managers for their own financial security. This is a rejection of the very idea of insurance - or rather, in parallel with the evolution of the broader economy, its 'financiarization' - the idea of insurance being to distribute risk among a very large group of people so that the costs of ill fortune to any individual are not so great that that person is overwhelmed.
Hacker suggests that the anxiety generated by this assumption of greater risk is behind widespread pessimism about the American economy. It is the experiential, psychological side of the well-known graphs plotting the inequality of income or wealth. It is most likely also the source of the profound sympathy of so many with the Occupy Wall Street protest movement.
December 19, 2014
thin on real data, heavy on cherry picked anecdotal data
To be fair, I can only judge the first quarter of the book. I couldn't convince myself to read beyond that.
The basic premise of the book is that the era of pensions and fully covered healthcare is over and individuals have picked up that responsibility. That's old news. He then proceeds to explain why we should all be terrified. He portrays those of us not in the top income bracket as victims. Sorry, that's not a book for me. I want information that I can use to be successful, not to whine about being a victim.
He uses little actually published data and when he can't find any to support his point, he either picks some anecdotal story or manufacturers his own facts. As an example, he describes how computer programmers have an unemployment rate double the national average and had an average salary of 23.01 per hour. I've been in the industry for decades and the unemployment rate has always been well below average except for a year or so after the dot com crash and the salary range didn't drop nearly that low.
I expected the book to have a political bias but the author goes way beyond my expectations. Fortunately I got it through kindle unlimited and can simply drop it and get a new book that will be more useful.
To be fair, I can only judge the first quarter of the book. I couldn't convince myself to read beyond that.
The basic premise of the book is that the era of pensions and fully covered healthcare is over and individuals have picked up that responsibility. That's old news. He then proceeds to explain why we should all be terrified. He portrays those of us not in the top income bracket as victims. Sorry, that's not a book for me. I want information that I can use to be successful, not to whine about being a victim.
He uses little actually published data and when he can't find any to support his point, he either picks some anecdotal story or manufacturers his own facts. As an example, he describes how computer programmers have an unemployment rate double the national average and had an average salary of 23.01 per hour. I've been in the industry for decades and the unemployment rate has always been well below average except for a year or so after the dot com crash and the salary range didn't drop nearly that low.
I expected the book to have a political bias but the author goes way beyond my expectations. Fortunately I got it through kindle unlimited and can simply drop it and get a new book that will be more useful.
June 14, 2021
This book has put into words the epitome of middle-class existence today: although we are slightly ‘richer’ in income, we also face greater economic risk. Incomes rise and fall more sharply, and a worker's retirement is now completely up to the worker. Although this book is about Americans, most of it is true for Canadians except the entire section on healthcare. We Canadians have a wonderful healthcare system except I would argue we have privatized and outsourced a lot of our healthcare, making it less universal.
Hacker describes an existence for middle class families as that of constant up and downs with no predictable future. Families today face more risks than ever before: buying a new home, gaining new skills, and raising well-educated children and bear the cost when these investments fail. In fact, Hacker proves that income volatility has risen across the higher educated as well as the less educated.
He attributes much of the ‘great risk shift’ (the shifting of responsibility off of the employer and the government and onto the singular family unit or individual) to a shift in attitudes ushered in by the ‘Personal Responsibility Crusade’. It's a ‘…a set of activists, assumptions and initiatives that have come to dominate debates over social policy in recent years.’ (pg 21). It’s this idea that we are better off dealing with economic risk on our own without the interference or expense of wider systems of risk sharing.
I really enjoyed the section on Employment. I have felt mostly hopeless as a worker. The work world has quickly transformed into a knowledge and service economy which generally offers lower wages. As a part of the new service economy we welcome part time, erratic and contingent work and with it the growing recognition that no matter how well educated or how well trained we may be, we are not free of the risk of sudden and large economic loss. Workplace security is non existent and contingent work is quickly replacing solid work. For example, Uber drivers are treated as independent contractors and only make about $10/hour. Uber drivers are a type of contingent worker. Outsourcing and automation are not only taking over manufacturing but the retail industry itself. We’ve seen it in our own communities with Walmart’s self check outs.
“Increasingly, outsourcing doesn’t mean moving jobs abroad; it means moving them online.” And with jobs moving online, wages will indeed fall.
I have been thinking about what the recent COVID pandemic has normalized- just that, outsourced labor that is completely online.
Families bear the most risk as a second income is no longer a luxury but a necessity. Wages have gone flat and the cost of raising a family is rising every year. I experience this in my own life. Groceries have increased in cost in just the last 5 years. I make more than I ever have in my lifetime, but the cost of living is so high, I wouldn’t know it.
Education is a big expense. The college diploma has become the equivalent of a high school degree half a century ago and is a prerequisite to a well paying job. Education means big time debt and most students are paying off their loans for a decade after receiving them. Sadly, many of the valuable and costly skills learned in higher education are tied to jobs that could disappear in an instant.
Retirement is essential but employers offer traditional defined- benefit plans less and less due to the absence of unions in the workplace as well as to the dying idea that retirement pensions rewarded employers with loyal and skilled lifetime employees. Now, a large percentage of workers never save enough for retirement. I actually have a good pension, but I worry so much about somehow losing my job and subsequently my pension.
Hacker has spoken to my daily anxiety because I understand that all the economic risk completely rests on my shoulders and social programs like Employment Insurance doesn’t pay the bills and often, people using Employment Insurance benefits end up taking jobs that pay less than their previous ones. The future scares me to be honest. I keep working, training and worrying and hopefully, I don’t have to work throughout my retirement years.
Hacker describes an existence for middle class families as that of constant up and downs with no predictable future. Families today face more risks than ever before: buying a new home, gaining new skills, and raising well-educated children and bear the cost when these investments fail. In fact, Hacker proves that income volatility has risen across the higher educated as well as the less educated.
He attributes much of the ‘great risk shift’ (the shifting of responsibility off of the employer and the government and onto the singular family unit or individual) to a shift in attitudes ushered in by the ‘Personal Responsibility Crusade’. It's a ‘…a set of activists, assumptions and initiatives that have come to dominate debates over social policy in recent years.’ (pg 21). It’s this idea that we are better off dealing with economic risk on our own without the interference or expense of wider systems of risk sharing.
I really enjoyed the section on Employment. I have felt mostly hopeless as a worker. The work world has quickly transformed into a knowledge and service economy which generally offers lower wages. As a part of the new service economy we welcome part time, erratic and contingent work and with it the growing recognition that no matter how well educated or how well trained we may be, we are not free of the risk of sudden and large economic loss. Workplace security is non existent and contingent work is quickly replacing solid work. For example, Uber drivers are treated as independent contractors and only make about $10/hour. Uber drivers are a type of contingent worker. Outsourcing and automation are not only taking over manufacturing but the retail industry itself. We’ve seen it in our own communities with Walmart’s self check outs.
“Increasingly, outsourcing doesn’t mean moving jobs abroad; it means moving them online.” And with jobs moving online, wages will indeed fall.
I have been thinking about what the recent COVID pandemic has normalized- just that, outsourced labor that is completely online.
Families bear the most risk as a second income is no longer a luxury but a necessity. Wages have gone flat and the cost of raising a family is rising every year. I experience this in my own life. Groceries have increased in cost in just the last 5 years. I make more than I ever have in my lifetime, but the cost of living is so high, I wouldn’t know it.
Education is a big expense. The college diploma has become the equivalent of a high school degree half a century ago and is a prerequisite to a well paying job. Education means big time debt and most students are paying off their loans for a decade after receiving them. Sadly, many of the valuable and costly skills learned in higher education are tied to jobs that could disappear in an instant.
Retirement is essential but employers offer traditional defined- benefit plans less and less due to the absence of unions in the workplace as well as to the dying idea that retirement pensions rewarded employers with loyal and skilled lifetime employees. Now, a large percentage of workers never save enough for retirement. I actually have a good pension, but I worry so much about somehow losing my job and subsequently my pension.
Hacker has spoken to my daily anxiety because I understand that all the economic risk completely rests on my shoulders and social programs like Employment Insurance doesn’t pay the bills and often, people using Employment Insurance benefits end up taking jobs that pay less than their previous ones. The future scares me to be honest. I keep working, training and worrying and hopefully, I don’t have to work throughout my retirement years.
May 16, 2022
Could have been shorter. Lots of examples of individual people. Book is a bit dated. Would like to see some of the stats be updated for 2022 and the Affordable Care Act and the change sto it have impacted things. Would also liked to have seen more on what to do to make changes to the risk problem.
The Great Risk Shift is the story of how a myriad of risks that were once managed and pooled by government and private corporations have been shifted onto workers and their families—and how this has created both real hardship for millions and growing anxiety for millions more.
Economic inequality may stir up our envy as we ogle the BMWs and McMansions of our richer neighbors, but the prospect of economic insecurity— of being laid off, or losing health coverage, or having a serious illness befall a family member— stirs up our anxiety.
The search for economic security is, in large part, a reflection of a basic human desire for protection against losing what one already has.
But in the emergency room, faced with a decision on whether or not to hospitalize their son as his ear infection worsened, the Meschkes did not feel much in control. “I realized that I neither had the bargaining power nor mental capacity,” confided Meschke, who teaches courses in financial management and investment. “If you’re negotiating a car, you can always say, ‘I’ll walk off the lot.’ If your one-year-old kid has an IV in his arm, you don’t have the same situation.”
“When the offshoring of services truly hits (and it will stretch out over several decades), it is likely to deliver a much greater shock to the U.S. economy than the offshoring of manufacturing did…. Every job that is (or could be) defined largely by the use of computers and telephones will be vulnerable."
most of us still strongly believe in the idea of upward economic mobility, whatever the statistics tell us about the reality.
economic security is a cornerstone of economic opportunity. Like businesses, people invest in the future when they have basic protection against the greatest downside risks of their choices.
Today, Americans feel a loss of control over the circumstances that govern and shape their lives, and they are turning inward as a result, taking to heart the clear message of recent trends that they are on their own in the insecure new world of work and family. This is a threat to our nation’s future, and to the vision of America that generations of Americans have held dear.
The Great Risk Shift is the story of how a myriad of risks that were once managed and pooled by government and private corporations have been shifted onto workers and their families—and how this has created both real hardship for millions and growing anxiety for millions more.
Economic inequality may stir up our envy as we ogle the BMWs and McMansions of our richer neighbors, but the prospect of economic insecurity— of being laid off, or losing health coverage, or having a serious illness befall a family member— stirs up our anxiety.
The search for economic security is, in large part, a reflection of a basic human desire for protection against losing what one already has.
But in the emergency room, faced with a decision on whether or not to hospitalize their son as his ear infection worsened, the Meschkes did not feel much in control. “I realized that I neither had the bargaining power nor mental capacity,” confided Meschke, who teaches courses in financial management and investment. “If you’re negotiating a car, you can always say, ‘I’ll walk off the lot.’ If your one-year-old kid has an IV in his arm, you don’t have the same situation.”
“When the offshoring of services truly hits (and it will stretch out over several decades), it is likely to deliver a much greater shock to the U.S. economy than the offshoring of manufacturing did…. Every job that is (or could be) defined largely by the use of computers and telephones will be vulnerable."
most of us still strongly believe in the idea of upward economic mobility, whatever the statistics tell us about the reality.
economic security is a cornerstone of economic opportunity. Like businesses, people invest in the future when they have basic protection against the greatest downside risks of their choices.
Today, Americans feel a loss of control over the circumstances that govern and shape their lives, and they are turning inward as a result, taking to heart the clear message of recent trends that they are on their own in the insecure new world of work and family. This is a threat to our nation’s future, and to the vision of America that generations of Americans have held dear.
July 10, 2019
This is a wonderful academic book by a sociologist, using his data, research and research findings from others to explain how American attitudes have shifted in the last 50 years or so and how dangerous the world is for most of us. Jobs are now risky; a century ago, a person had a job for life in many cases. Now with layoffs, technology, down-sizing, no job is secure. Retirement and health care costs are also more risky than our parents experienced. Few organizations now provide retirement monies to match the workers' portion of retirement monies. The same is true of health care - more and more, organizations are not providing health care insurance, leaving individuals to pay for it alone. Many people can manage to pay for their health care and retirement, until a crisis occurs. Where there is a very sick child, when cancer or some awful disease occurs, when an adult child has to return home because of any issue, the family funds simply do not extend far enough. People go into debt, have their homes foreclosed, and live hand to mouth because the average American does not have savings to cover long periods of disaster. Most of what Hacker writes is true and the average reader can deal with it. This book becomes special because it points all the areas of risk that the average American is facing today. Risks that were once carried by organizations or the government are now shifted to individuals. Put it all together and bam! A slap to the face. This is a superb book. Well worth reading.
April 5, 2020
Important book that chronicles how the U.S. has systematically shifted the risk away from government and private corporations and onto individual citizens. The reason why individuals feel so insecure despite modest gains in wealth over the past decades is that they have no safety net for when there are sudden dips in their income or major unplanned expenses, especially related to healthcare. Reading this book during COVID-19 certainly added a layer of timeliness to a book on a topic that was already urgent for the public to address. Now we are certainly experiencing one of those black swan events as a collective and the holes to the safety net have never been more apparent.
February 11, 2019
I’ve been making just this argument for years. I would argue that the scope of the problem is even larger than the author suggests. This is an important argument and continues to have great relevance. Yes, and the arguments by the proponents of the risk shift are often more moral than economic, compassionate, or logical. Yes, moral hazard is a real phenomenon, but highly over used by those on the right. A very simple and quick read.
August 1, 2021
Great read, although slightly out of date as it was written prior to the introduction of Obamacare.
The author demonstrates how american families are experiencing greater economic risk, eg volatility in incomes, and documents the shortcomings of current agreements in addressing this fact.
He proposes a range of interesting policy responses, such as the establishment of "universal insurance ", intended to provide straightforward guarantees of basic economic security.
The author demonstrates how american families are experiencing greater economic risk, eg volatility in incomes, and documents the shortcomings of current agreements in addressing this fact.
He proposes a range of interesting policy responses, such as the establishment of "universal insurance ", intended to provide straightforward guarantees of basic economic security.
September 1, 2021
I tried to not be too postmodernist while reading this 15 years after it was published, but the last chapter's focus on what you can do to protect yourself from the personal responsibility crusade was too incongruous for me. There's a lot of good info in this book, but it only hints at the real problem and never actually denounces capitalism. The solution to our problems is apparently...more capitalism.
July 11, 2018
It was kind of interesting, if also kind of depressing, to read this sort of assessment of the state of the American economy coming from before the Great Recession--the book was written in 2006--which, of course, made many of the issues Hacker talks about even more severe.
December 23, 2019
Written in 2006 it's interesting to note these issues continue exactly the same way 13 years later.
January 13, 2024
Very good book about how the attack on government has grown the risks that everyday Americans face, from healthcare, to job security, and financial stability.
August 30, 2024
A shorter work that still offers plenty of detail on what ails the modern U.S. economy.
August 2, 2025
If only we had heeded this call to action, we'd be in a very, very different place as a society. Sad to read 20 years too late, but still consider this an edifying read.
September 17, 2023
blurb
Behind the risk shift, he contends, is the 'Personal Responsibility Crusade' eagerly embraced by corporate leaders and conservative politicians who speak of an economic nirvana in which Americans are free to choose.
But the result, Hacker reveals, has been very different: a harsh new world of economic insecurity in which far too many Americans are free to lose.
Blending powerful human stories, big-picture analysis, and compelling ideas for reform, this remarkable volume has become a rallying point in the struggle for economic security in an increasingly uncertain world.
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Hacker offers up a new foundation for economic security. This is an important book.
Robert B. Reich, former U.S. Secretary of Labor
Amazone
Interesting approach to the transformation of American society
10/10
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.
Luis Franco
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Our shared risk/security
8/10
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.
H. Rao
January 27, 2017
Economic statistics show America is better off than it’s ever been, yet an increasing number of American’s feel that they’re in a more precarious situation than they have ever been.
Using qualitative and quantitative research, Jacob Hacker’s The Great Risk Shift: The Assault on American Jobs, Families, Health Care and Retirement and How You Can Fight Back suggests that such concerns are hardly unfounded. Americans are, in fact, increasingly being forced to do more with less in numerous including paying for healthcare and financing retirement. All this occurring amid a job-market that has far less job-security that previous generations had. Hacker proposes some solutions, such as unemployment insurance, that might help mitigate the instability increasing numbers of people in the United States face.
The Great Risk Shift is an intriguing and provocative read that uses real world data to realistic conclusions and solutions, as opposed to some of the other works on this subject that pretend that the world of the previous generations (i.e. job security and good benefits) can be brought back. This book is a worthwhile read for anyone interested in income inequality or other relevant areas of economic policy.
Using qualitative and quantitative research, Jacob Hacker’s The Great Risk Shift: The Assault on American Jobs, Families, Health Care and Retirement and How You Can Fight Back suggests that such concerns are hardly unfounded. Americans are, in fact, increasingly being forced to do more with less in numerous including paying for healthcare and financing retirement. All this occurring amid a job-market that has far less job-security that previous generations had. Hacker proposes some solutions, such as unemployment insurance, that might help mitigate the instability increasing numbers of people in the United States face.
The Great Risk Shift is an intriguing and provocative read that uses real world data to realistic conclusions and solutions, as opposed to some of the other works on this subject that pretend that the world of the previous generations (i.e. job security and good benefits) can be brought back. This book is a worthwhile read for anyone interested in income inequality or other relevant areas of economic policy.
February 14, 2011
This little book documents the movements both in government and industry to shift health care, retirement savings, and employment risks from society at large to the individual. Illuminates the dark side of the "ownership society" as people who hit hard times are funneled toward bankruptcy or worse--when previously unions, corporations, or government might have helped alleviate the risk. It is a good book but not much I didn't already know. Robert Reich's Supercapitalism: The Transformation of Business, Democracy, and Everyday Life is a more in-depth analysis of why these trends exist--the competitive pressures of globalization make it impossible to rely on the private sector the way we used to. It is really necessary to do more reading to understand these socioeconomic forces that have a lot of effect on our lives.
April 16, 2012
I'm not the kind of person who normally reads books about economics or politics. It's depressing and takes a lot of brain power to focus on and I like to use reading as a way to relax. Reading about economic downturns is not really good relaxation material. I had to read this book for school, however, and I have to say, I really enjoyed it. It's an interesting take on economic indicators and I appreciate the longitudinal rather than "snapshot" point of view. It's full of statistics, which some people might not like, but I love because I'm a nerd. It is really, really troubling, until you get to the conclusion, which offers a fairly comprehensive plan for how to get out of this mess we have in the US. Looking at his website, there are much more detailed plans and I find his analysis pretty convincing. Never thought I'd give a book about economics 4 stars, but I feel like I really do know more than I knew when I started and it wasn't at all painful to get through.
August 19, 2021
This book explains a lot of what we saw happening in the world of work during the 1980's and 1990's regarding pensions and health care. The book is kinda depressing and sad because of the risk shifted to ordinary working folks. I mean really; how is the average person supposed to effectively monitor and invest their 401k money wisely. We are not going to become financial wizards. So, some of us use a financial advisor and cross our fingers. And the myth of putting health care in our hands - laughable. Medical is far too complex and we don't have that many options or ability to "shop around". I was hoping the author would provide some advise to folks who know carry this risk. He does offer suggestions but they are all based on government policy and I am just not optimistic the political landscape will change that much. I wish someone would address how the average person can effectively navigate this minefield of shifted risk.
April 12, 2010
Almost more statistics than you can digest. Still Hacker makes a compelling argument that American families are being made to shoulder more and more of the risks in our economy.
From the change from defined benefit pension plans to 401k and from "full coverage" medical plans to high deductible plans with Health Savings Accounts (HSAs), to the riskiness of two income households that cannot even maintain a "middle class" lifestyle anymore, Hacker shares alarming trends in American economic life for families.
In the future we face privatized Social Security and likely the demise of Medicare. Not a happy or secure prospect.
From the change from defined benefit pension plans to 401k and from "full coverage" medical plans to high deductible plans with Health Savings Accounts (HSAs), to the riskiness of two income households that cannot even maintain a "middle class" lifestyle anymore, Hacker shares alarming trends in American economic life for families.
In the future we face privatized Social Security and likely the demise of Medicare. Not a happy or secure prospect.
April 23, 2024
As a student of political science, this book was absolutely rewarding to read. Most impressive is how Hacker ties together many different struggles within our lives into one diagnosable problem. When a concept has a name, it is must easier to address. Also, the is digestible and easy to read which I see as one of it’s strengths. This book is accessible to ordinary Americans, not just those well versed in public policy. Overall, this book was impressive and enlightening. I would recommend to anyone looking to understand government programs and how they impact our lives.
December 8, 2007
Interesting book documenting the shift in social welfare policy toward the conservative idea of "personal responsibility". The author looks at this attack on poor and working people and the erosion of benefits as beginning with Reagan's domestic policy and bnefitting corporate interest. Supposedly at the end he outlines what people can do to fight back, but I haven't finished it yet.
February 11, 2009
I am just madly and totally in love with Jacob Hacker (as in, his writings and ideas lol -- he was my prof for two classes at Yale). They truly make you look at the world anew, and greatly help your own thought process grow and develop. Incredibly smart, well-research, discerning, relevant and the man actually cares deeply about these subjects. Fantastic!!!
June 12, 2011
After reading this book I have to wonder if the Rep Conservatives ever get their way and remove all the safety nets (while creating the gaping chasm) why would any private citizen need to pay taxes? They will be receiving very little in return for their taxes. Okay not a review but a political critique. Also looking from the outside in, Canada in this case.
January 4, 2020
Interesting approach to the transformation of American society
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
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
November 20, 2009
I read it in part. He makes clear the responsibilities placed upon low income families which they cannot handle alone. Insurance is needed, as in social security. Only the rich can afford to play the market and win or lose.
April 24, 2021
A brilliant summation and analysis of a horrific force ripping at the fabric of the social contract. Summed up so many things I've worried about, seemingly on my own, in such a short, hard-hitting work. Excellent stuff.
July 5, 2023
Fairly surface level analysis of some big economic issues. Hacker covers some important topics, but it's not exactly groundbreaking, and I had to slowly trudge through some chapters as I'd already read up on a lot of the topics prior.
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