Risky Business

The hot book of last year among populist-leaning liberals was Jacob Hacker's The Great Risk Shift, which argued that income volatility has gone way, way up for most middle-class Americans in the long era of GOP dominance. A lot of smart people I know were skeptical about his claim, and now there's some pretty comprehensive data from the Congressional Budget Office report suggesting that individual income volatility hasn't gone up since the 1970s.

Hacker defends his argument here; Tyler Cowen isn't impressed by Hacker's defense, to say the least. What's interesting to me, though, is that Hacker's argument now rests on the contention that even if individual income hasn't become more volatile, family income has, and family income is what we should care about. That's a perfectly plausible point of view: Given the changes in family structure over the last thirty years, you would expect greater volatility, some of it from benign factors (the income swing that comes when a woman eaves and then re-enters the workforce, say) and some of it from darker trends, like rising illegitimacy and the growing divorce divide. And you'd expect working-class Americans, in particular, to be hardest hit by this family-related volatility, since they have much higher rates of divorce and single parenthood than the well-off and well-educated.

But the subtitle of Hacker's book, you'll note, isn't "How The Sexual Revolution Created Higher Levels of Risk For American Families and What To Do About It." It's "The Assault on American Jobs, Families, Health Care, and Retirement - And How You Can Fight Back." In other words, he's taking data that would seem to support the socially conservative contention that changing family structure has had a lot of negative externalities for vulnerable Americans, and using it to claim that 1) Republicans have shredded the safety net and 2) we need a much, much stronger one than what we currently have. The first point is at best debatable - if our safety net is shredded, then why aren't individuals experiencing more income volatility too? - and the second point just amounts to the rather predictable liberal claim that a bigger welfare state is the answer to increasing family breakdown.

I'm skating rather quickly over a very complex terrain, admittedly, and I should also note that I actually agree with a few of Hacker's policy prescriptions, if memory serves (I don't have the book in front of me). I just think that he's taking a narrative that, if true, provides a lot of grist for social conservatives and claiming, somewhat simplistically, that it vindicates a rather conventional liberal worldview.