Tuesday, February 08, 2011

"Economic Security at Risk" study on the US economy

Jacob Hacker and a team of researchers published a paper in July 2010 that provides an important look at the state of the economy for working people in the United States. Despite the recession having been officially over for over a year and a half now, the conditions described in their report, Economic Security at Risk: Findings From the Economic Security Index, haven't improved much if at all for the majority of people.

The economic security index of the title looks at major losses in income, large medical expenses and amounts of liquid savings to construct a measure of insecurity among the population, not based on a survey of feelings of insecurity but based on those measurable factors. The trend is important:

To see beyond short-term economic fluctuations, we statistically calculate the longer term trend in the ESI. Based on this analysis, the ESI has increased by approximately a third from 1985 to 2007. If the projections up to 2009 are included, the ESI increased by almost half (49.9 percent) since 1985. Putting this trend in terms of population, approximately 46 million Americans were counted as insecure in 2007, up from 28 million in 1985.
They also report:

Americans’ level of economic security fluctuates with the general health of the economy. For example, when the business cycle experiences an upturn, Americans’odds of suffering a large fall in income decreases. But this cyclical pattern has been accompanied by a gradual rise in the overall prevalence of economic insecurity in good times as well as in bad. During downturns, economic security has eroded, but between downturns, it has not bounced back to previous levels. The “new normal” in each subsequent economic cycle has featured a higher level of economic insecurity. [my emphasis]
From the standpoint of the neoliberal/deregulation/anti-union/"free market" ideology that has dominated American policy since 1981, this decrease in security and increase in uncertainty is a good thing. Supposedly this will drive more and more people to set up small businesses and become filthy rich. And if you don't, well, you just made "bad choices" and deserve to be poor and live in fear and uncertainty.

In the real world, it's a measure of the miserable failure of the neoliberal program.

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