About whats happening in peoples Financial Lives in the us . We have a ton of data and yet somehow this and managed to give a different kind of insight so the funders really wanted to do that work here. But i think they knew and jonathan knew there could be a local partner so ive always described myself as the local color on the project. But that was my original role. Tell us a little bit about how you were the local color. I work at a place called the centerfire Financial Services innovations and we work on dental health, trying to improve the Financial Health of americans but at the time, we were spending, we were focused on theissue of being under banked. And we were founded out of this idea to get more people dental access and we did a lot of research, we did the First National study of to understand what it meant to be under banked, the public study about that sowhen i joined , my first job was one of the things my bossfirst asked me to do , jennifer toucher who founded it said you figure out what our next leadership is and i said its like rummaging around and she and i had both written the financial diaries on a trip to south africa years before that. So we were inspired by the diaries and it caused me to reach out to jonathan and general collins who had done the book in south africa. And so it made sense that we were, ive been asking questions about this project and trying to figure out if this was the kind of research we might want to do it was a natural phase in some ways. Jonathan, it is so fascinating that you really came to the us after studying bangladesh and a lot of people say poverty in america really isnt real. Are the american core way of life, the middle class, anywhere else in the world and i want to come back to that notion several times during our conversation but i remember when you were a critic i think for my book with luke shafer two dollars a day, someone in that book of course is in extreme poverty in the United States, someone asked you this question. Can you compare us poverty to poverty in thedeveloping world and you said yes. Would you still say that and tell us more. Yes, absolutely. And its a real privilege to come to the us after having spent a lot of time thinking about poverty in a very different situation. When you are doing work in any event, in other cultures, one of the things which is so immediate to see is how much instability there is and also how much illiquidity, its Financial Markets and people are just struggling to put together the resources at the right time so coming in with that mindset made it much easier to come some places where we are working, cincinnati, new york. And see who the same kind of things but that might have been missed by others. You had already in your mind the idea of patching together a living given what youve seen in india and bangladesh. We knew that was the experience of poverty. And i do find the lives of the poor, id read some of your earlier work and i had a sense from your work and other works that that was very much a part of the lives of some families, some communities in the us. But i had just read your work, i think i had a sense of why it played out and how extensive but i came primed to be open to seeing this kind of action, this kind of communities pulling together, people working hard to create Financial Lives despite the odds. But in many ways its the greatest thing and i thank all these great guides, but the way that things are coming in with an open mind and not coming with a lot of knowledge. And this allamerican frame. Because i didnt know very much , a guy i was asking the dumb questions but looking for some of these experiences, how do you do it . The work in bangladesh had been about how do people live on a dollar a day . And here we are asking how do you live on 25 a yearor 30,000 a year or 40,000 a year with kids. That was the start of a fascinating journey with a group of families who let us into their lives back in 1972, the university of michigan originated the survey called town study of interdynamics and expressly to capture what youre describing and the sense of the survey of Income Participation program. What was the gap that you were trying to fill . And maybe it was much more organic than that, i dont want to put too much structure on what sounds like an organic process. Did they say hey jonathan, theres this thing. It wasnt totally addressed. I did manage to get a phd along the way in economics so the ps id and the other surveys were familiar but ive got to say, we went in with our eyes open, without a lot of preconceived notions and we wanted to listen to families and stay with them and track everything they get over the year. Everything they earn and spend. And the other author of the study had interviewed families without much regularity. Week after week. A whole year. So you dont have to recall more than just a few days. You kind of catch things in real time. It didnt always work out that way. That was the way it was the plan but it was afterwards where rachel and i would, you know how it is. You have all these amazing authorities and then you want to tell a broad story about what you saw and thats when i went back to the ps id and started trying to understand where the gaps were. What the biases were that came from collecting this data. And asking certain kind of questions. And asking certain kinds of questions so it was by accident that without during the identifying gap and that this is what were going to look for, we just wanted to understand. And i think that turned out to be a very powerful mistake. That might have been everything. Lisa, tell us about the nuts and bolts of this thing, not the sort of how many people you talk to for how long but what it was really like to have these conversations with these families in such an intense way over a years time. We had 10 researchers who were in four different locations. So first of all, just hiring the right people mattered. And i think right in that moment i had in my preconceptions questions because i had a certain image of what that person would look like, what we thought we were hiring. The researchers were diverse, people who were interested in the job were a very diverse group. But there was age, background, education, their level of connection to the community that they weregoing to be in researching with , it varied. And that was fascinating right from the beginning. So in each of those researchers were sent out to recruit families and that was the first job. And that was hard. That was longer than we expected and we were asking people to do something onerous, really onerous, they wouldnt meet with us and share everything about your Financial Life so of course we lost. They would say yes so there was a really important motivation issue. We of course new people would say yes, was it about a little bit of money or, i think ultimately people said yes because they wanted to have impact and they wanted to be heard and that was really powerful. Just to be able to have people feel that we were going to be there megaphone. One family that stands out inyour memory , that families individual got to know, then make a bigger impression on me, its so true. That is something powerful right in the beginning and this was one of the ideas we were conscious of as you did the work. We think as humans we can make decisions based on facts and a number of analytics but the stories are incredibly powerful. Weve got personal experiences sitting in somebodys living room changes your mindset in a much different way. So there was these one women that didnt make it into the book but we wrote a profile about who had that place in my mind of a latino woman who had spent her life in social services and really is the american story of upward mobility but had access to great Financial Services over her life, made lucky decisions and when i went to visit her, we had this visual image ofwhat her house was like in her living room. And she had a can of jam she had made, its that kind of sense that changes your mindset. Thats a good story. You know, i reading this book was amazing and i found id like to get your reaction. And reading these things i sort of paused and said oh my goodness. This is terrific. So im going to begin and here, this is a little subtle, its built so stay with me. You begin by actually describing a study using this Income Program participation, your reporting on this study. You say a team of researchers studying Family Welfare assembled data across a 25 year span. Overall, monthtomonth income volatility for families and children was relatively stable in that time but two groups saw substantial changes. Volatility increased for the poorest 10 percent of household and it fell for the richest 10 percent. Thats over the past generation, the gap in income volatility between the poorest and richest grew by 400 percent. Reinforcing divides based on income and wealth and you move on in page 159 so stay with me to make the following statement, 81 percent of those judged poor by annual income had months when they were not poor so thats the second clue to why i think this book is really big. Third, the other america is a little over 50 years old, one of the most important poverty probably ever written, he writes really impressively, popular deceptions of the permanence of poverty and health care are spread, we speak of the poor as ifthey were and ever present and unchanging group. Indeed, the way we can contextualize the poverty problem, the underclass problem or the welfare problem seems to presume the permanent existence of welldefined groups within american society. So i had a conversation with a Foundation President about a year ago and he was asking me to come speak to the board and of course i wrote this book on the rise of extreme poverty that you describe in the developing world and but i dont want you to talk about that book today because our foundation is only interested in studying the working poor. Were not interested in the generational port. So i paused and i want to be respectful but i said oh, then i will be talking about two dollars a day because the extreme poor are in and out of the housing market, 70 percent of children falling into two dollars a day poverty have worked at some point so thats a small piece of this big story thatyou guys are telling. And im thinking and im wondering if you agree that it turns our conceptions of poverty on their head area most, Many Americans are poor for many a year, Many Americans are not poor. And you then find yes, that 86 percent of the volatility and income can be laid at the feet of jobs. Just jobs. So if this seems like a fundamental reconceptualization of poverty in america, and its fundamentally seems that its also, its also a fundamental reconceptualization of whatit means to work. Yes. I think rachel and i really struck by how the families started fitting into the concepts and categories that we are used to or thought we would be trying to fit them into and then as we wrote the book we spent a lot of time going back and reading Michael Harrington and trying to understand where the language came from and where thedisconnects were. We could see a new language which was the health sectors. Much of harrington books is really still an amazing book. I made my students read it last year. Its great, hes a great writer and youre angry at the end and youre ready to act. Its a powerful piece of weather but he does something which is intrinsically at odds with the world that i think rachel and i saw and i think that comes through in your work two dollars a day. And harrington, her book there are the four and we often use this idea of something being invisible. You have to go into the most inner part of the inner cities, the hollows of kentucky. The places which historically and still are places of disadvantage. But thats poverty to him and it reinforced the notion of the poor and the nonpoor. Exactly, despite both. And its striking and the frustration that a lot of people felt disruptively was how that moment in the 1960s could we tolerate so much poverty despite growing wealth in america and i think rachel and i saw is a parallel to that or a question which is how can we tolerate so much insecurity and instability in america despite so many of us having increasingly disparate lives, there is a divide. And as you call it, the new inequality. Yes, and that is really foundational. And its this number, 86 percent of ups and downs during the year being attached to a single job, thats from the morgan Chase Institute and they did something amazing. They took data from all of their customers and boiled it down so the big data exercise , they found things which were very similar and thats, i gave rachel and me the confidence to write about our 235 which as an economist is a small number and they were even specifically representative but then we could connect it to j. P. Morgan chase, its very striking. One of the pieces of data that really surprised me is the effects of income and Program Participation for governments, they said between 2009 and 2011, it was a bit of an unusual. After the recession but during that period, 10 million americans report during other months of that face but 90 million americans at some point report during that period that a third of america experienced poverty at some moment in that period, often for a shorttime but that means we have to rethink whats going on. And the fifth story that had been done before the recession, there are similar kinds of numbers but it wasnt just recession issues, its a moment of whats going on today. It seems from reading your book that something happened in 1980. We know that in the late 70s were when working mens, those without a College Degree and so on and they been declining ever since but it seems like you know, the recession in a way blinded us to almost fundamental changes in the economy that are going to stay with us and thats going to, i think its undeniably driving these new cycles of despair that are bubbling up in our community so tell me about whats happened. I think you are absolutely right. It is the case that the room that preceded the recession and the recession would have deeper structural changes that had taken place. And what you see when you then peel away those layers is that you were referencing the work has really changed for many people and it is the fact thathaving a fulltime job no longer means that you have a steady income. Say that again. Network does not guarantee steady pay. So one more quote from your book , many, this is page 35. Many households could not count on their jobs to provide a steady income from one month. This is, thats a strong statement. It really is and were used to that for tip workers or people who work on commission so we have that model already in our economy but the fact is its a much bigger phenomenon that people who are selfemployed depend on tips and what you see now is if you work in retail , productivity enhancements means that your boss knows exactly how many people they need on the floor and send people home when they dont need them. My daughter got a job at a little mexico restaurants and poppies restaurant in College Point and she came home and said mom, they told me i was first cut. She thought this was something good. She was the first one sent home because she was the newest employee. Exactly and some of the variation in some jobs are unique. I in college you needed to get saturday night some of the time but you didnt need, you needed also did distribute saturday night among the waitstaff. Exactly. So it was like the best scheduled got friday and sunday but it was, the variations of some of that, you need to run a business and some of that employees need or workers need in order to share in the good days and bad days but what we think has happened is that the extent to which workers are now sharing in the ups and downs with their employers has just magnified and so you no longer are putting it. Its no longer you are buffered by this larger institution and that Expert Institution experiences the ups and downs but you get a steady wage. In some ways you are moving so the financial risk for the employer rather than the other way around. Right, and we are going to it in our book but we are also assuming that risk for the shareholders so it is a really big difference in how work is structured and i think its important to remember that it doesnt have to be that way. It has happened that way but its not inherently the case that manufacturing jobs go to the steadiest and nonmanufacturing jobs dont deliver steady income. Say more about that. Some of it is the course, manufacturing jobs deliver stability and mobility for a few generations of workers because we made policy choices that enable them to do so and because unions had real power when manufacturing first entered our economy it was a disastrous for free jobs, working. I remember. You remember norma rae. And even before that, you learned in grade school about the terrible working conditions and so its a choice, it was achoice to make manufacturing jobs. We could choose to make service jobs good jobs , it would require variation. It would require workers having a different kind of power than they have today but its not inherent to the nature of the job. I want to go a little deeper there. I think thats important. Simply, we sort of assume that employers are asking in economically rational ways. If you talk to employers, their operating by rules of some and they eventually, the market may win out but theres a lot of noise. I remember when Betsy Stevenson was on the council of economic advisers in the Obama Administration she was finding studies that many of these more onerous practices that employees were experiencing were actually costly to the employer. Where does that expression stand out . To what extent is there no going back because theres really an economic, theres an economicrationale . Thats sort of the whole system is just based on this new workplace and to what extent is it really a matter of making choices . Thats a good question. Im trying to pull it apart in different ways. But to take one part and connected to Betsy Stevenson, what some of the most important work that ive seen about whats going on in the workplace is being done by Susan Lambert and his collaborators in chicago, we were just talking to them comparing notes and t