Cut Adrift

The emotional story behind our troubling economic statistics.

Cut Adrift

Everyone knows that economic inequality is on the rise in the U.S., thanks in part to a decline in the availability of well-paying jobs with benefits. And we’re all aware how managing risk has shifted from the government and employers to individuals and their families, leaving Americans to provide for their own retirement and pay for some (or all) of their health care, while also adjusting to the rapidly increasing cost of higher education. What people don’t often hear about is the emotional and psychological impact these fundamental economic changes have had on their fellow Americans, as the economic inequality/insecurity story is typically illustrated using little more than black-and-white statistics.

In “Cut Adrift: Families in Insecure Times” (University of California Press), Marianne Cooper, a sociologist at the Clayman Institute for Gender Research at Stanford University, highlights the anxiety Americans are feeling in the face of long-term economic challenges. As part of her research, Cooper interviewed more than fifty families (ranging from affluent to poor) to determine how they are coping with insecurity. One of her core conclusions is that the way people respond, which differs by social class, ends up fueling inequality. “Affluent families try to create an economic firewall between their family and this insecurity. In contrast, middle class and working class families come to feel that they can’t change much about their situation so they lower their expectations,” Cooper says.

In the following Failure Interview, Cooper explains how Americans are “not just pulling apart economically, we are pulling apart emotionally. As the rich push for more—because they think they need more in order to be secure—and everyone else tries to acclimate to greater insecurity, we are making inequality worse. We are so focused on our own individual coping mechanisms that we aren’t coming together with a collective will to stop it.”

Why did you write “Cut Adrift”?
I felt like a major part of what is happening in our society was being left out of the discussion about inequality and insecurity. It’s a story largely told through statistics and graphs, but the personal story of the people who live out these trends in their everyday lives is not being included. I wanted to put a human face on it.

Also, there are a lot of sociologists and economists who have looked at inequality and many who have looked at economic insecurity, but they don’t talk about how the two are related. There is actually an inequality of security. When you lay income and wealth inequality on top of insecurity that’s what you get. What it means is that middle and working class families are not only more likely to experience financial hardship, but when they do, they have fewer resources at their disposal to weather that economic storm.

In contrast, affluent families—in addition to not facing as much economic insecurity and uncertainty—have more resources at their disposal to get through it. So it’s not just that we have an inequality of wealth and income, it’s also that we have inequality in terms of our exposure to risk and insecurity.

It would be one thing if we had high inequality but everyone had security. That would look much different than what we have right now, where we have high inequality and people who are experiencing tremendous insecurity. That’s another issue: How much of this insecurity is also reinforcing inequality? When middle class families experience a layoff or a pay cut, and then in their next job they are earning less, that’s part of what is creating inequality. These forces are in a big feedback loop.

Why do people feel insecure?
It depends, which was also a big discovery. When I started I didn’t realize I had a working definition of what security should mean to people. But I did and I think we all have a sense of what a “good life” is, especially people in public policy or scholars in sociology or economics. Maybe if you have a job with a good paying wage and benefits and you live in a nice community you feel secure. That’s a factual definition of security.

But when you start talking to people about security and insecurity there is this subjective dimension to what it means and what it looks like. That’s the part that really surprised me, because when I went out and started talking to poor and working class people, they didn’t always feel as insecure as the facts might lead us to think. I learned that facts and feelings don’t always move together in the ways we expect them to. I found affluent people who were highly anxious about their financial futures, when on paper you would think they didn’t have anything to worry about.

I learned over time that we work on our definitions of security and insecurity when we are struggling so that we can cope with our situation. One of the people I interviewed, Laura Delgado, makes the situation she is facing much more tolerable by saying, “It’s not that bad. It’s not as bad as the Great Depression. It’s not as bad as this friend of mine who lost her eight-year-old son to cancer.” She tries to change her attitude about security to make things seem not so bad.

On the other hand, I profiled affluent families like Paul and Brooke Mah, and even though Paul has assets of well over a million dollars, he is still not satisfied and wants to keep pushing for more. He says for him to have real financial security he would have to have ten million dollars. So we get these subjective, personal takes on inequality that cause us to question looking at this solely from an objective perspective. 

How much are people driven by expectations?
Expectations are malleable. The deeper question is: Where are these expectations coming from and how do we change our expectations to cope with the realities we face?  Among affluent families the expectation is that they need to provide for their children and set them up so they have financial security. And they also need to provide for themselves in their retirement, and when you run those calculations it’s a huge price tag. So those expectations are coming from a reading of what’s changed in our society—what people need to have in order to be secure—and doing a calculation of what it costs to set one’s family up for that. When you have multi-millionaires in your social universe that changes your sense of what you have.

But at the middle and below people have let go of certain expectations. They let go of their dreams and goals because things outside of their control—like a layoff or uninsured health care emergency—come along and blow it for them. What I found is that people have stopped hoping for more. They have become so beaten down that they have stopped hoping, because when things are out of your control, having really firm expectations about security is almost painful because you can’t live up to those expectations. If you hold onto the idea that you have to send your kids to college and pay for it in the midst of downward mobility that creates a lot of angst. So over time people start to adjust these expectations and they say, “It isn’t so bad if my kid goes to community college.” And those things might not be a big shift. But then you get down to people like Laura Delgado who was saying things to me like, “Having nothing is not always a bad thing.” And when her heat got turned off, she would say, “It’s not so bad. It’s like I’m camping with my kids.” So expectations are not firm and fixed. You have to have definitions and feelings about security that can change over time, and that’s what enables you to cope with very difficult circumstances.

What do we need to do to stop—and ultimately reverse—this trend in inequality?
The first thing is that people need to understand that it doesn’t need to be this way. A lot of people feel like there is nothing to be done, but there is a lot we can do. We need to have a conversation about values and the values that created a middle class in this country and the values we need to return to. A lot of times when people experience insecurity they experience it as a personal failing, like they’ve done something wrong. It’s not that people have done something wrong, it’s that our policies have failed us. If we change the policies that ushered in this age of insecurity, we can usher ourselves out. But it takes a rethinking of morals and values about what we owe each other as Americans.

From my perspective, economic security is the foundation of economic opportunity. It’s things like living wages, affordable health care, affordable child care and affordable college educations. When you look at what happened after World War II, the GI Bill sent millions of people to college, and not only paid for college tuition, but paid to support dependents while you were getting an education. That is something that Americans can’t even imagine today—a support system like that. Federal and governmental policies enabled people to translate working hard into moving up.

But there was also a social contract between employers and employees based on mutual protections and mutual loyalties where companies paid good wages and offered good benefits and in return workers worked really hard and helped build the company. Together, that created not only economic growth but shared economic growth. Over the last 30 or 40 years, the people who are reaping most of the rewards are companies and the executives. It is not being shared with the average worker, and that’s a fundamental change from how things were post-World War II.

So a lot of this is about policy and the moral and ideological viewpoint underneath policy. It used to be we believed we were better off if we stood together in good times and bad. And that began to unravel and it became more about everyone being on their own, which is why you hear phrases like free-agent nation. We’re getting to a point where a very strong case can be made that that way of organizing our society and organizing our relationship between employers and employees is not sustainable. And if we want long-term economic growth we are going to have to think about how we can all share and all move up.

Is the American Dream a thing of the past? Are people still dreaming?
I think it’s just a dream and that’s because the people I profiled were letting go of their dreams. Instead of looking up and dreaming, people are looking down and figuring out how to cope and survive. And we are seeing that in surveys. It used to be that the American Dream was to own a home and move up the class ladder. Now what we are seeing is that Americans are more concerned about holding onto what they have. The desire to own a home has been replaced by the desire to be debt-free and have financial stability. We are seeing these personal, subjective changes in what the American Dream looks like.

There is a whole psychology that underlies the American Dream and my sense from the data out there and from talking to families is that the belief that if I work hard I will move up has fallen by the wayside. People are nervous about what the new rules of the game are. They are working hard but it’s not translating into what they thought it would.

Are you optimistic about the future?
The good news is that people are talking about inequality and the hollowing out of the middle class. There is a growing sense that we are not on the right track. A recent poll found that a historic proportion of people lacked confidence that their children’s generation would do better than their own. When these feelings begin to become the norm and are shared by a lot of people then that’s when a real conversation can start about how to fix things.

But these are big problems and we need big changes and big solutions. And we need a lot of innovation in how we provide security for families. There is a fierce battle about the role of government in providing security and we saw that debate with the Affordable Care Act. So I am optimistic but there is a long road ahead of us. There is a lot to lose by not addressing this from a societal stability perspective and a national competitiveness advantage perspective. My hope is that we actually start figuring it out and addressing it.