"The incomes of American families have grown more unstable over the last generation," said Johns Hopkins University economist Robert A. Moffitt, who along with Boston College economist Peter Gottschalk pioneered techniques for analyzing earnings volatility more than a decade ago.

"All other things equal," added Moffitt, who assisted The Times with its analysis, "rising income instability suggests that families from the working poor to those fairly far up the income distribution are bearing more economic risk."

Protector of Last Resort

It was not always so.

With workers' compensation, welfare, unemployment benefits, Social Security, Medicare, workplace rules, environmental regulations, product liability laws and more, government officials spent most of the 20th century adding to the economic protections that Americans could count on — and reducing the risks they had to tackle alone.

"State and federal lawmakers continually expanded the circle of public risk-management programs … to include workers, the elderly, consumers and, in the end, just about everybody in some form or another," said David A. Moss, a Harvard University economic historian whose book "When All Else Fails" traces Washington's role as a protector of last resort.

Not everyone favored these developments. During the 1935 congressional debate over Social Security, one House member, Republican Charles A. Eaton of New Jersey, fumed: "This is a crazy notion … that somehow … the government of the United States can make it … unnecessary for any of its citizens to face any difficulty, to run any risk."

But so strong was the conviction that working families needed protection, and so firm the consensus that government must help provide it, that leaders of virtually all political stripes sounded as if they were reading from the same script. It would remain this way from the New Deal programs of the 1930s through President Nixon's push for national health insurance and expanded unemployment benefits.

However, by the late 1970s and certainly by Ronald Reagan's election in 1980, new notions began to take hold, ones that turned many an established view about the needs of working Americans on its head.

The sense that something had to change — and that the free market was the answer — was fed by a variety of factors: fear that American business was being overtaken by Japan; concerns that the 1970s bankruptcies of Lockheed Corp., New York City and Chrysler Corp. betrayed some deep flaw in the U.S. economy; the influence of economist Milton Friedman, author George Gilder and Wall Street Journal editor Robert Bartley; and Reagan's sunny conservatism.

"Government is not the solution to our problem," the new president famously declared. "Government is the problem." Safety nets that were designed to help people were now said to be ensnaring them. Economic upheaval that was long thought to hurt people was now praised for sifting winners from losers. Ordinary Americans who were once simply seen as workers were now regarded as entrepreneurs and investors as well.

Along the way, wittingly or not, they became something else too: huge risk takers. Consider:

•  Government used to provide substantial help in coping with joblessness. In the mid-1970s, jobless workers could collect up to 15 months of unemployment compensation. By last December, Congress had pared the program to just six months. Additionally, federal legislation in 1978 and 1986 effectively reduced the value of benefits by making them taxable. And state eligibility restrictions imposed in the late 1970s and early '80s shrank the fraction of the workforce entitled to collect benefits from about one-half to a little more than one-third. Of the 8 million people who were unemployed last month, only 2.9 million were collecting benefits.

•  The minimum wage was once the government's chief means of ensuring that "work pays" — that those willing to head to a job each day would make enough to live on. For decades, Democratic and Republican administrations alike maintained the minimum wage at about half of average hourly earnings in the U.S. But starting in the early 1980s, the minimum wage was allowed to slip. At $5.15, it is now only one-third of average hourly earnings, its lowest level in 50 years.

•  Washington once sought to help people adjust to global competition, industrial restructuring and technological change by offering job training. Twenty-five years ago, the federal government spent $27.3 billion annually (in 2003 dollars) through the Comprehensive Employment and Training Act, or CETA. Even if one doesn't count CETA's "public service" jobs, which were widely criticized as boondoggles, it was still spending $17.1 billion. By contrast, the government now spends about $4.4 billion on CETA's successor, the Workforce Investment Act. "It's largely a place holder," said Anthony P. Carnevale, an authority on education and training who was appointed to major commissions by presidents Reagan and Clinton. "It gives politicians something to point to but doesn't do much good."

•  Welfare was created to protect poor women and children, but starting in the late 1970s a growing chorus of analysts complained that the system had backfired by fostering a culture of dependency. In 1996, President Clinton and a Republican-controlled Congress approved a "work first" law that has cut welfare rolls by one-half and reduced inflation-adjusted welfare spending by at least one-third, or about $10 billion a year. On balance, the changes appear to have benefited people who can find jobs and hold them. But those who can't work or have lost their jobs can often find themselves in far worse shape. Twenty-five years ago in California, a mother of two who depended on welfare collected about $15,000 in cash assistance and food stamps. By last year, a woman in the same circumstances brought in $3,300 less, in inflation-adjusted terms.

"Washington," said Hacker, "has been in a quarter-century-long retreat from what was once one of its primary responsibilities: helping provide economic security."

Upward Striver

Paul Fredo was born in a Pennsylvania coal town called Spangler to a father who lost his mining job to automation; his pension, according to Fredo, to union corruption; and, ultimately, his life to black lung disease. The son was determined to have an easier go of it.

Fredo lifted himself up the way many poor kids do: He joined the military. He spent four years in the Air Force, including a stint in Vietnam, then went on to the University of Pittsburgh, studying accounting at night.