Wednesday, January 16, 2013


Safety Nets

American Career Institutes, a for-profit higher ed chain that specialized in computer-based career-oriented majors, just closed abruptly.  It had campuses in Maryland and Massachusetts, including one in Springfield, which is HCC’s largest feeder city.  

The non-credit side of the college is taking a look at its offerings to see what it can provide to the students who were stranded.  If there’s a way to “teach out” a program so that they can walk away with something to show for their efforts, that could minimize the damage.

We provide a safety net when experiments fail.  Nobody else does that.  As such, we enable experiments to happen in the first place.  Only the public sector is capable of doing that reliably.

This is the glaring hole in American political discourse.  We talk about risk and safety as if they were somehow mutually exclusive.  We forget that safety can enable risk-taking.

I was reminded of that a few days ago, in a discussion with a Canadian colleague.  We have similar senses of humor, so we got to talking about The Kids In The Hall, SCTV, and national styles of humor.  (For my money, “Brain Candy” is a neglected classic of dark, dark, dark comedy.)  She offered the theory that Canada punches above its weight culturally because its social safety net -- health care most conspicuously -- makes it possible for people to take chances on creative careers.  As a result, they get Holly Cole, and we’re left with Adam Sandler.  

It’s not a perfect theory -- we aren’t exactly saddled with a shortage of actors -- but it does address something I’ve seen before.  I’ve known plenty of people who stick with jobs they don’t particularly like specifically for the benefits, so their spouses could try startups.  Having one spouse ensure that nothing catastrophic happened made it possible for the other one to go out on a limb.  No benefits, no risk-taking.

Yes, there’s such a thing as too much security.  I had to smile at the article earlier this week that showed that college students whose parents pay their entire way get lower grades than students who work at least part-time.  If things are just a little too pat, it can be easy to get distracted.  

But even that security is often illusory.  Life tenure, for example, is only as secure as the institution that offers it.  Pensions are only as secure as the states that guarantee them want them to be.  At some point, risk as a fact of life will assert itself.  It can’t not.

So yes, we’ll help the students stranded by the latest for-profit to fold.  It’s what we do.  It may not be maximally efficient in isolation, but it’s the kind of thing that makes real progress possible.  Sometimes it’s worth connecting those dots explicitly.

While I disagree with the specific point about Canada punching above its weight culturally (quick name a great Canadian film that's not "Strange Brew"), I do think that a robust safety net does make entrepreneurial risk taking more likely because people can afford to take the risk of starting a business without having to worry about losing health insurance or other benefits.

I used to have a state government job where this dynamic was apparent: the secretaries in the agency were fairly low paid, but had very good benefits. 3/4 of the secretaries in my officer were married to husbands who had their own small contracting or (vaguely) construction related business. They made much more than their wives made, but had no independent health benefits of their own
Same experience as Peter W, but would extend it to spouses of both genders.
Swedish friend of mine says that the reason Swedes see capitalism as liberating is because if they don't like their jobs they can quit and start their own company – and they can do this because they don't have to worry about starving or getting sick because of the social safety net.

His view of America was that the ordinary worker with a house and family couldn't afford to quit because their families would suffer too much if they did.
Gleemonex. "We kicked penicillin's ASS!" Cancer Boy.

"Brain Candy" is a triumph of cinema.

Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?