Collective Risk Shift: Commodifying Social Inequalities with Risky Healthcare, Risky Retirement, and Risky Credentialing

The Mass Transformation of Other People’s Risk Into Profit” reminded me of Tressie McMillan Cottom’s writing on “risk shift” in “Lower Ed”, “Where Platform Capitalism and Racial Capitalism Meet”, and “The University and the Company Man”.

Lower Ed refers to credential expansion created by structural changes in how we work, unequal group access to favorable higher education schemes, and the risk shift of job training, from states and companies to individuals and families, exclusively for profit.

Yale political scientist Jacob S. Hacker says the new economy marks both an economic change and an ideological change, each characterized by the “great risk shift” of corporate responsibility to workers and families.

Source: Lower Ed: The Troubling Rise of For-Profit Colleges in the New Economy | The New Press

The so-called 1099 workforce represents a collective risk shift from firms to individuals (Cottom 2017; Hacker 2008) that extends beyond employees to obfuscating the idea of employee altogether. Digital technologies abet that risk shift through the sociopolitical regime of platform capture. That platform capture effectively transforms workers into independent contractors.

Source: Where Platform Capitalism and Racial Capitalism Meet: The Sociology of Race and Racism in the Digital Society

In his 2006 book, The Great Risk Shift, Jacob Hacker explores “the new economic insecurity and the decline of the American dream” by measuring the shift of risk from corporations to individuals. He focuses on three trends: the erosion of company-paid pensions, the declining value of corporate-subsidized health benefits, and the use of layoffs to manage company bottom lines. To take the example of pensions: the National Institute on Retirement Security reports that in 1975, 88 percent of private sector employees had a pension plan wherein the company guaranteed benefits, but by 2005 that number was 33 percent. Rather than eating the cost of the company man’s inevitable aging, the private sector shifted the costs of old age onto individual workers, replacing pensions with individual worker-funded investment accounts like 401(k)s and the security of the organization with the volatility of the stock market.

In The Two Income Trap: Why Middle Class Parents are Going Broke, Elizabeth Warren and Amelia Warren Tyagi describe how this shift of risk to workers has changed our family lives, with rising child care and education costs driving middle-class families into economic crisis. The continuing downward pressure on wages has made things look even worse today than in 2004, when the book was first published: Warren and Tyagi didn’t consider the extra costs borne by families paying not only for their children’s tuition but their own further education, in order to stop the decline in their wages.

For the rest of us, the prescription for insecurity is more college, but colleges do not know what work to prepare us for. In the 1950s the labor market presented us with a social contract, and higher education responded. But the economic forces that brought us the great risk shift killed the company man. For those of us looking for economic security who are not fortunate or able enough to be fast-tracked into the good jobs, there isn’t much college can do.

Source: The University and the Company Man

We can’t endure the great risk shift, as noted by Sarah Kendzior in “The View from Flyover Country”.

Failure, in an economy of extreme inequalities, is a source of fear. To fail in an expensive city is not to fall but to plummet. In expensive cities, the career ladder comes with a drop-off to hell, where the fiscal punishment for risk gone wrong is more than the average person can endure. As a result, innovation is stifled, conformity encouraged. The creative class becomes the leisure class – or they work to serve their needs, or they abandon their fields entirely.

People go to college because not going to college carries a penalty. College is a purchased loyalty oath to an imagined employer. College shows you are serious enough about your life to risk ruining it early on. College is a promise the economy does not keep – but not going to college promises you will struggle to survive. In an entrenched meritocracy, those who cannot purchase credentials are not only ineligible for most middle-class jobs, but are informed that their plight is the result of poor “choices”. This ignores that the “choice” of college usually requires walking the road of financial ruin to get the reward – a reward of employment that, in this economy, is illusory. Credentialism is economic discrimination disguised as opportunity.

Source: The View from Flyover Country | Sarah Kendzior | Macmillan

“Risky credentialing” is explored by both “The View from Flyover Country” and “Lower Ed”.

Hacker identifies two major areas where American workers feel these effects: healthcare and retirement. He calls the shift from corporate responsibility for workers through pensions and health insurance to personal responsibility “risky healthcare” and “risky retirement.” To that I would add, “risky credentialing,” or Lower Ed. Declining investment in social insurance programs that, by design, diffused the individual risk of old age or health episodes exacerbates the risks associated with sickness and old age. In the same way, declining investment in public higher education exacerbates the risks associated with labor market shocks. As social insurance policies like healthcare and pensions declined, so too did public investment in higher education. Traditional colleges shifted more of the cost of a credential (or risk) to students and families with more loans and fewer grants offered, even as steep price discounting fought to hold individual costs down.

The risk for changing jobs and moving up the professional ladder has shifted to individual workers across race, class, and gender. That risk makes credentials valuable only insofar as those credentials are easy to start, easy to fit into complex lives, and easy to pay for. For-profit colleges nail that trifecta for millions of people who are similarly vulnerable in this new economy of risk shift, declining job tenure, and insecurity.

Source: Lower Ed: The Troubling Rise of For-Profit Colleges in the New Economy | The New Press

Today, creative industries are structured to minimize the diversity of their participants – economically, racially and ideologically. Credentialism, not creativity, is the passport to entry.

One would suspect that a college student who can pay $22,000 to work 25 hours a week for free in one of the most expensive cities in the world needs little help making connections. But that misconstrues the goal of unpaid internships: transforming personal wealth into professional credentials. For students seeking jobs at certain policy organizations, the way to get one’s foot in the door is to walk the streets paved in gold. In the post-employment economy, jobs are privileges, and the privileged have jobs.

What they are defending is a system in which wealth is passed off as merit, in which credentials are not earned but bought. Aptitude is a quality measured by how much money you can spend on its continual reassessment.

Namely, they have raised the price of the credentials needed to participate in the new meritocracy by such dramatic measures that it locks out a large part of the population while sending nearly everyone else into debt.

Source: The View from Flyover Country | Sarah Kendzior | Macmillan

A broad theme I take away is the commodification of inequality by shifting risk.

Lower Ed is, first and foremost, a set of institutions organized to commodify social inequalities…

Source: Lower Ed: The Troubling Rise of For-Profit Colleges in the New Economy | The New Press

More selections on risk shift from Lower Ed:

we have a labor market where the social contract between workers and the work on which college has previously relied has fundamentally changed and makes more workers vulnerable.

The new economy makes one overriding demand of education: constantly and consistently retrain millions of workers, quickly and at little to no expense for the employer. The new economy is marked by four characteristic changes to the relationships that underpin our social contract: people are frequently changing jobs and employers over their working lifetimes (job mobility); firms place greater reliance on contract, term, and temporary labor (labor flexibility); there is less reliance on employers for income growth and career progression (declining internal labor markets); and workers are shouldering more responsibility for their job training, healthcare, and retirement (risk shift).

Risk shift for those with good jobs means greater competition for less stability but still high status. Risk shift for those with bad jobs means more of the same poor labor market outcomes and fewer ways to work one’s way into a good job.

This risk shift has created an ascendant new work contract that provides fewer buffers to help workers navigate life shocks.

But as one river, these streams flow through a single valley—a time trap where the risk shift of educational costs outstrip social insurance programs like affordable childcare, the viability of investment vehicles like education savings accounts, and employer security like promotions and wage increases. For millions of people, the time trap makes a for-profit college your only practical choice for labor market entry, stability, or mobility.

Now Senator Elizabeth Warren and Amelia Warren Tyagi called this the “middle-class squeeze” in their book The Two-Income Trap. Hacker calls this the “risk shift.” Sociologist Arne Kalleberg, in his book on good jobs and bad jobs, talks about the “hollowed out middle” class jobs.8 Of course, poor people and the working poor have long felt this squeeze, absorbed this risk, and stared down the gulf between themselves and their dreams. Essentially, even those with good jobs don’t feel like those jobs buy the same quality of life as they once did. They are right.

Source: Lower Ed: The Troubling Rise of For-Profit Colleges in the New Economy | The New Press

Tech Ethics, Roaming Autodidacts, and the White-Male Effect

The internet’s “condition of harm” and its direct relation to risk is structural. The tech industry – from venture capitalists to engineers to creative visionaries – is known for its strike-it-rich Wild West individualistic ethos, swaggering risk-taking, and persistent homogeneity. Some of this may be a direct result of the industry’s whiteness and maleness. For more than two decades, studies have found that a specific subset of men, in the U.S. mostly white, with higher status and a strong belief in individual efficacy, are prone to accept new technologies with greater alacrity while minimizing their potential threats – a phenomenon researchers have called the “white-male effect,” a form of cognition that protects status. In the words of one study, the findings expose “a host of new practical and moral challenges for reconciling the rational regulation of risk with democratic decision making.”

Source: The Risk Makers. The nuclear, auto, and food industries… | by Catherine Buni and Soraya Chemaly | Sep, 2020 | OneZero

That reminds me of Tressie McMillan Cottom’s observations on “roaming autodidacts”.

A roaming autodidact is a self-motivated, able learner that is simultaneously embedded in technocratic futures and disembedded from place, culture, history, and markets. The roaming autodidact is almost always conceived as western, white, educated and male. As a result of designing for the roaming autodidact, we end up with a platform that understands learners as white and male, measuring learners’ task efficiencies against an unarticulated norm of western male whiteness. It is not an affirmative exclusion of poor students or bilingual learners or black students or older students, but it need not be affirmative to be effective. Looking across this literature, our imagined educational futures are a lot like science fiction movies: there’s a conspicuous absence of brown people and women.

Source: Black Cyberfeminism: Intersectionality, Institutions and Digital Sociology by Tressie McMillan Cottom :: SSRN

I very much resemble the roaming autodidact. Tech and open source are full of us. It took longer than I’d like to admit for me to recognize the white-male effect in my own thinking. “A form of cognition that protects status” is an apt summary, especially for roaming autodidacts who’ve lived and believe the meritocracy myth.

See also:

The Segregationist Discourse

Again, how did the traditional segregationist discourse, trimmed of a few unacceptable phrases, become the dominant discourse in American society by the 1980’s?

Source: The Christian and Critical Race Theory, Part 2: The Segregationist Discourse and Civil Rights Retrenchment : The Front Porch

Selections from “White Flight: Atlanta and the Making of Modern Conservatism”, “The Christian and Critical Race Theory, Part 2: The Segregationist Discourse and Civil Rights”, and “Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America” on segregationist discourse:

If we truly seek to understand segregationists—not to excuse or absolve them, but to understand them—then we must first understand how they understood themselves. … [L]ike all people, they did not think of themselves in terms of what they opposed but rather in terms of what they supported. The conventional wisdom has held that they were only fighting against the rights of others. But, in their own minds, segregationists were instead fighting for rights of their own—such as the “right” to select their neighbors, their employees, and their children’s classmates, the “right” to do as they pleased with their private property and personal businesses, and, perhaps most important, the “right” to remain free from what they saw as dangerous encroachments by the federal government. To be sure, all of these positive “rights” were grounded in a negative system of discrimination and racism. In the minds of segregationists, however, such rights existed all the same. Indeed, from their perspective, it was clearly they who defended individual freedom, while the “so-called civil rights activists” aligned themselves with a powerful central state, demanded increased governmental regulation of local affairs, and waged a sustained assault on the individual economic, social, and political prerogatives of others. The true goal of desegregation, these white southerners insisted, was not to end the system of racial oppression in the South, but to install a new system that oppressed them instead. As this study demonstrates, southern whites fundamentally understood their support of segregation as a defense of their own liberties, rather than a denial of others’. (White Flight, p. 9)

Source: White Flight: Atlanta and the Making of Modern Conservatism (Politics and Society in Modern America (89)) (9780691133867): Kruse, Kevin M.

Via: The Christian and Critical Race Theory, Part 2: The Segregationist Discourse and Civil Rights Retrenchment : The Front Porch

I’ve always found Alabama Governor George Wallace’s 1963 Inaugural Address particularly instructive. Delivered soon after Dr. King moved his operations from Albany to Birmingham, and just a couple months after the mass White riot following the court ordered enrollment of James Meredith in the University of Mississippi, Wallace’s address is a near perfect summary of the traditional segregationist discourse, captured all in one well-articulated speech.

He begins with a theme, consistent with Kruse’s suggestion above, that marks the speech from beginning to end: the struggle against integration was a struggle for freedom.

An easily identifiable list of themes quickly emerges as one listens to the speech, including states’ rights and federalism (the Confederate apologist’s mainstay), free enterprise, freedom of association, the primacy of private property, meritocracy as the goal of the Founders, and the presumption that all opposition is actually communism, tyranny, immorality, and atheism.

Last, as can be seen in the quotes above, segregationists did not consider themselves racists; they loved the “Negro” and wished the best for him—again, according to their own self-assessment. As Wallace stated in a 1968 Meet the Press interview, “Well, of course I don’t know what your definition of racism is. But I’m certainly not a racist.”

These principles, inherited from the Confederacy and refined in the fires of “forced” integration, have proven to be potent political ideals. Simply remove explicit references to “segregation” and much of this ideology predominates to this very day. In his 1964presidential bid, Barry Goldwater won every Deep South state by running on these very principles-as a Republican. Richard Nixon took these principles national in his own 1968presidential victory, though losing the Deep South to Governor Wallace (running third party) alone. But by 1972, Nixon had secured the whole of the South with this rhetoric, in his second term victory.

Finally, we come to the eight-year administration of President Ronald Reagan (1981-1989)-the very era in which Critical Race Theory was born. Reagan’s “new conservative” movement hearkened directly back to the campaign of Barry Goldwater, taking Nixon’s conservatism to the next level. Not only did Reagan champion the law and order movement beyond any that had gone before, but he perfected the rhetoric of Southern segregationists like George Wallace. (I’d argue that, with only a handful of deletions, Wallace’s entire Inaugural Address could have been delivered by Ronald Reagan, and quite probably was delivered multiple times in aggregate over the course of his political career.) Every theme discussed above-states’ rights, federalism, radically free enterprise, freedom of association, increased privatization, the mythic view of American meritocracy, and opposition to public assistance, all couched in the polemics of anti-communism and civil religion-were the bases of his fabulously successful 1980 and 1984 campaigns. And, for the most part, these themes were successfully cast in the “race neutral” language of “equal protection under the law” and “color-blindness,” solidifying a new post-civil rights era compromise, viz., the commitment to an idealized formal equality absent the goal of substantive equality.

Source: The Christian and Critical Race Theory, Part 2: The Segregationist Discourse and Civil Rights Retrenchment : The Front Porch

But take a longer view—follow the story forward to the second decade of the twenty-first century—and a different picture emerges, one that is both a testament to Buchanan’s intellectual powers and, at the same time, the utterly chilling story of the ideological origins of the single most powerful and least understood threat to democracy today: the attempt by the billionaire-backed radical right to undo democratic governance.

For what becomes clear as the story moves forward decade by decade is that a quest that began as a quiet attempt to prevent the state of Virginia from having to meet national democratic standards of fair treatment and equal protection under the law would, some sixty years later, become the veritable opposite of itself: a stealth bid to reverse-engineer all of America, at both the state and the national levels, back to the political economy and oligarchic governance of midcentury Virginia, minus the segregation.

For all its fine phrases, what this cause really seeks is a return to oligarchy, to a world in which both economic and effective political power are to be concentrated in the hands of a few.

And from the start, as Calhoun’s calculations illustrate, the notion of unwarranted federal intervention has been inseparable from a desire to maintain white racial as well as class dominance. Not surprisingly, then, but with devastating consequences all around, attacks on federal power pitched to nonelites have almost always tapped white racial anxiety, whether overtly or with coded language.

Source: Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America (pp. xvii, xxxiv, 11)

See also:

The Long Southern Strategy and the Legacy of White Supremacy in American Christianity