It Is Different – Middle Class Homelessness and Unemployment
Sharon L. Secor
April 09, 2009
During the past couple of years, there has been the occasional news story about the increase in middle class homelessness, often reported more as an anachronism than as a real trend. However, with the significant increase in unemployment, middle class homelessness is being treated in a much more serious fashion. Some advocate groups point to this and say that it is because the middle class are more socially valued than the poor, so their problems mean more to the public. While there is some truth to that, the primary reason that middle class homelessness garners so much more attention is because it is more frightening, it offers a more dire assessment about the health and direction of the economy as a whole.
Unemployment is reaching record levels, and that is even with the numbers manipulation performed by the government to prevent social organization or unrest, depending on which side of the fence you're on. Many states are seeing double digit unemployment, though the national rate hasn't – officially – reached those heights. The people affected by the current wave of unemployment is a little out of the norm, perhaps because there are so many less manufacturers left in America. Unlike past recessions, in which the brunt of the unemployment fell upon workers in the manufacturing industries, today we see more middle class lay-offs, in addition to the expected service industry staff reductions.
The middle class lifestyle of today is based on debt to a much higher degree than in times past. According to an article published on March 30, 2009, in the Chicago Sun Times, "increasingly, the middle class has taken on debt to pay its bills -- a move that is causing major problems now. While debt once equaled about half of income -- someone making $75,000 owed an average of $34,000 in 1983 -- today the average debt on the same salary would be nearly $90,000, the Pew report found. That debt grew 162 percent in the last two decades."
In an interesting report on consumer debt released in February, 2009, it was noted that "debt levels have risen the fastest for middle class families. Since the 1980s, income levels have grown for middle class families, but not at a rate equal to that of wealthier families. And because their income levels tend to be high enough to offer greater access to credit, middle income families have been more likely than poor families to accumulate a large amount of debt. The debt-to-income ratio for middle class families is higher than that of lower income families (who have less access to credit) and higher than that of upper income families (who have more income and are more easily able to pay off debt)."
Thus, the modern middle class, in many ways, is less prepared to deal with significant fluctuations in the overall economy, such as we are experiencing now. Burdened by debt – mortgages, auto loans, credit card debt, personal loans of various sorts, and assorted other types of consumer debt – many in the middle class today lack the fiscal flexibility necessary to ride out bad financial times. Living so close to the edge – heavy debt and minimal, if any, personal savings – means that a big blow, such as the loss of a job, can set the entire situation tumbling over the edge and out of control.
People prefer to view themselves as middle class, even if they are, by the numbers, not. That's because to do otherwise would be to admit to what has long been a disgrace in America, being poor. Perhaps it was that push not to seem poor combined with a few generations of separation from real hardship and actually working physically hard for everything – food, shelter, clothing, etc. – and the expectation of instant gratification that crept into the culture as the hardship generations put forth so much effort to see that their children never had to experience their own struggles that helped to create the unbelievable amount of debt we have today. Poor people, in many people's mind, are not them and they don't feel their struggles in the same way that they do when they see middle class homelessness, unemployment, etc. When it happens to the middle class, they have to face the fear that it can happen to them.
Of course, those in the highest income levels and those in political and social power don't like to see middle class struggle in any great amount, either. For different reasons, naturally. That's because if the middle class suffers too much, there could be uprisings, tax revolts, and even revolution. Of course, there is a tipping point that has to be reached before that, one in which enough of a percentage of the middle class shifts from being afraid of losing what they have to being angry that they may lose or already have lost their lifestyles.
Middle class homelessness, foreclosures, and unemployment do garner headlines and media attention. Perhaps critics have a point when they say it gains a great deal more media interest when it is the middle class suffering such things. However, I think that that difference goes beyond the value culturally assigned to members of a particular socio-economic class, and has more to do with what middle class financial trouble means to the rest of society and what its historic relevance has been in the development of nations and political change.
Unemployment is reaching record levels, and that is even with the numbers manipulation performed by the government to prevent social organization or unrest, depending on which side of the fence you're on. Many states are seeing double digit unemployment, though the national rate hasn't – officially – reached those heights. The people affected by the current wave of unemployment is a little out of the norm, perhaps because there are so many less manufacturers left in America. Unlike past recessions, in which the brunt of the unemployment fell upon workers in the manufacturing industries, today we see more middle class lay-offs, in addition to the expected service industry staff reductions.
The middle class lifestyle of today is based on debt to a much higher degree than in times past. According to an article published on March 30, 2009, in the Chicago Sun Times, "increasingly, the middle class has taken on debt to pay its bills -- a move that is causing major problems now. While debt once equaled about half of income -- someone making $75,000 owed an average of $34,000 in 1983 -- today the average debt on the same salary would be nearly $90,000, the Pew report found. That debt grew 162 percent in the last two decades."
In an interesting report on consumer debt released in February, 2009, it was noted that "debt levels have risen the fastest for middle class families. Since the 1980s, income levels have grown for middle class families, but not at a rate equal to that of wealthier families. And because their income levels tend to be high enough to offer greater access to credit, middle income families have been more likely than poor families to accumulate a large amount of debt. The debt-to-income ratio for middle class families is higher than that of lower income families (who have less access to credit) and higher than that of upper income families (who have more income and are more easily able to pay off debt)."
Thus, the modern middle class, in many ways, is less prepared to deal with significant fluctuations in the overall economy, such as we are experiencing now. Burdened by debt – mortgages, auto loans, credit card debt, personal loans of various sorts, and assorted other types of consumer debt – many in the middle class today lack the fiscal flexibility necessary to ride out bad financial times. Living so close to the edge – heavy debt and minimal, if any, personal savings – means that a big blow, such as the loss of a job, can set the entire situation tumbling over the edge and out of control.
People prefer to view themselves as middle class, even if they are, by the numbers, not. That's because to do otherwise would be to admit to what has long been a disgrace in America, being poor. Perhaps it was that push not to seem poor combined with a few generations of separation from real hardship and actually working physically hard for everything – food, shelter, clothing, etc. – and the expectation of instant gratification that crept into the culture as the hardship generations put forth so much effort to see that their children never had to experience their own struggles that helped to create the unbelievable amount of debt we have today. Poor people, in many people's mind, are not them and they don't feel their struggles in the same way that they do when they see middle class homelessness, unemployment, etc. When it happens to the middle class, they have to face the fear that it can happen to them.
Of course, those in the highest income levels and those in political and social power don't like to see middle class struggle in any great amount, either. For different reasons, naturally. That's because if the middle class suffers too much, there could be uprisings, tax revolts, and even revolution. Of course, there is a tipping point that has to be reached before that, one in which enough of a percentage of the middle class shifts from being afraid of losing what they have to being angry that they may lose or already have lost their lifestyles.
Middle class homelessness, foreclosures, and unemployment do garner headlines and media attention. Perhaps critics have a point when they say it gains a great deal more media interest when it is the middle class suffering such things. However, I think that that difference goes beyond the value culturally assigned to members of a particular socio-economic class, and has more to do with what middle class financial trouble means to the rest of society and what its historic relevance has been in the development of nations and political change.
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