December, 2010The Rockefeller Foundation & Yale University economic security expert Jacob Hacker are pleased today to release “Standing on Shaky Ground: Americans’ Experiences with Economic Insecurity,” the first study to detail how economic insecurity affects the well-being of Americans. The report shows that in the 18 months preceding the fall of 2009, fully 93 percent of households experienced at least one substantial economic shock. Data presented in “Shaky Ground” suggests that economic insecurity has become the rule, not the exception, for many Americans—even in good times.
The innovative survey is a follow-up to the pioneering Economic Security Index (ESI) report of July 2010.
“The Rockefeller Foundation is pleased to continue our legacy of supporting innovative and groundbreaking research that informs the public debate, and with the release of this new data, we have an accurate, albeit painful, look at the impact the economy has had on American households,” said Rockefeller Foundation President Judith Rodin. “As America continues to struggle to rebuild during the current economic crisis, this new research provides us with a clear understanding of just how many American families have been impacted in the last 18 months. It is only when we have an accurate picture can our policy leaders find the solutions that will benefit all going forward.”
“This new report shows the extent to which American families have been rocked by economic shocks whose consequences include not just worry but also real economic hardship,” said Jacob Hacker, Stanley B. Resor Professor of Political Science at Yale University. “This report dashes the notion that economic disruption is limited to lower-income families by revealing that many middle-class and even upper-middle-class families are unable to meet basic economic needs.”
“Shaky Ground” was written by political scientists Jacob S. Hacker and Mark Schlesinger of Yale University and Philipp Rehm of Ohio State University, guided by a technical committee retained to reinforce the intellectual and analytical integrity of the work.
About “Standing on Shaky Ground”
The “Shaky Ground” report draws on two new surveys fielded in the spring and fall of 2009 that paint a comprehensive and sobering portrait of Americans’ experience with economic insecurity and their capacity to cope with economic instability.
Collectively termed the Survey of Economic Risk Perceptions and Insecurity (SERPI), these surveys focus on four domains of economic life: employment, health care, family, and wealth. In each, they identify how often households experience various economic disruptions, how frequently those disruptions coincide across the four domains and persist over time, and what imprint those disruptions leave on Americans’ expectations, concerns, and ability to meet basic economic needs. Because parts of the survey were modeled after a separate 2007 poll, the SERPI also shows how Americans’ outlooks changed in response to the recent economic downturn.
The SERPI was designed to complement the Economic Security Index (ESI), an integrated measure of economic security based on publicly available statistics. The ESI represents the share of Americans who experience a 25 percent or greater year-to-year decline in their available household resources—their income minus their medical costs and debt service—and who lack an adequate financial safety net to cushion the fall. According to the ESI, economic insecurity has worsened since the mid-1980s, with a projected one-in-five Americans experiencing 25 percent or greater losses in 2009.
These repeated snapshots convey a powerful picture of Americans standing on shaky ground, rocked by economic tremors whose consequences include not just worry and anxiety but severe economic hardship.
Key findings from “Shaky Ground”:
Economic shocks were strikingly widespread in 2009.
Americans’ economic insecurity has been growing for years, and it appears to have little diminished since 2009.
Economic instability leads not just to uncertainty but to anxiety and economic hardship. This hardship is experienced not just by those at the bottom of the economic ladder but also by those squarely in the middle class.
Looking forward, Americans appear extremely vulnerable to future economic shocks, in part because of the wearing down of their basic economic “buffers” against economic risks, such as personal wealth and the potential to borrow from family and friends.
Instability is so disruptive because economic shocks frequently persist over time, come clustered together, and occur at roughly the same time in multiple domains (employment, health care, family, and wealth).
About the Economic Security Index (ESI)
“Shaky Ground” is a companion report to the Economic Security Index (ESI). ESI is part of the “Campaign for American Workers” initiative of the Rockefeller Foundation. The initiative strives to improve economic security among American workers and their families, in part by improving knowledge and understanding among policymakers and thought leaders of the dimensions of American economic security.
The ESI was developed over the last three years by political scientist Jacob S. Hacker and a multi-disciplinary research team. Professor Hacker is based at the Institution for Social and Policy Studies at Yale University, which aims to facilitate interdisciplinary inquiry in the social sciences and research into important public policy arenas.
The ESI research team has been guided by a technical committee retained by the Rockefeller Foundation to provide oversight and to reinforce the intellectual and analytical integrity of the work. Chaired by respected economist Henry Aaron of the Brookings Institution, the technical committee is comprised of seven leading experts on economic security:
The ESI and associated reports are the independent intellectual product of the research team and should not be understood to express the views of the Rockefeller Foundation, Yale University or any institutions that hosted or funded the individual members of the team or the technical advisory committee.
About the Rockefeller Foundation
The Rockefeller Foundation fosters innovative solutions to many of the world's most pressing challenges, affirming its mission, since 1913, to "promote the well-being" of humanity. Today, the Foundation works to ensure that more people can tap into the benefits of globalization while strengthening resilience to its risks. Foundation initiatives include efforts to mobilize an agricultural revolution in Sub-Saharan Africa, bolster economic security for American workers, inform equitable, sustainable transportation policies in the United States, ensure access to affordable and high-quality health systems in developing countries, accelerate the impact investing industry's evolution, and develop strategies and services that help vulnerable communities cope with the impacts of climate change. For more information, please visit www.rockefellerfoundation.org.
About the Yale University Institution for Social and Policy Studies
The Institution for Social and Policy Studies (ISPS) strives to facilitate interdisciplinary inquiry in the social sciences and research into important public policy arenas. Recognizing that important social problems cannot be studied adequately by a single discipline, the Yale Corporation established the Institution for Social and Policy Studies in 1968 in order to stimulate interdisciplinary collaboration within the university. Through these activities, ISPS seeks to speak to important social science and policy questions, both in the United States and abroad.
About Jacob Hacker
Jacob S. Hacker, Ph.D., is Stanley Resor Professor of Political Science at Yale University, where he is also a Resident fellow of the Center for the Study of American Politics and the Institution for Social and Policy Studies. An expert on the politics of U.S.health and social policy in cross-national perspective, he is the author of five books, including the influential The Great Risk Shift, as well as numerous journal articles, and a wide range of popular writings on American politics and public policy, with a focus on health and economic security. He is a frequent media commentator, often testifies before Congress, and has promoted ideas—notably, a proposal to create a public health insurance option competing with private health plans—at the center of American political debate. In 2007, Details magazine named him one of 27 “mavericks”—“agents of change who are bending the future to their will.”