The Fragile Middle Class: Americans in Debt

The Fragile Middle Class: Americans in Debt

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The Fragile Middle Class 5 out of 5 based on 0 ratings. 1 reviews.
Guest More than 1 year ago
This book discuss the reasons in the increase number of bankrutptcy filings within the last decade. The '90s was a time of great prosperity. Huge technological changes came by. In many ways our community life seems easier with advance in medicine, transportation, communication and the Internet. But reality is very confusing as you read 'The Fragile Middle Class'. Real average income decreased. A higher family income was reached due to the fact that, like never before, there was more than one income in the household. Even with this additional income, many families can barely make it. Consumer debt is rising, more so after a divorce, unexpected medical expenses, job instability and the purchase of a home at any cost. American society has experienced a negative income, collectively people are not saving money. Only the richest 20 percent of the American population has had a real income increase during the last two decades. The use of credit was increasingly easier. Meanwhile the industrial sector dealt with inflation reducing operational cost by reducing payroll and resorting to contracting services. The middle class is subject to periods of adjustment and transition. Once a job is lost debts keep pilling up. Unemployment figures not necessarily reflect the dynamic behind job instability. Credit was used to maintain social status with huge amount of interest charged. Even if consumers could stop incurring in new debt and reducings costs, high interest rates keep debts going up. Lately credit has been easily available to 'higher risk consumers', people who most likely will not be able to pay their debts. The percentage of divorced persons in bankruptcy is bigger than the percentage of divorced persons in the general population. Of this percentage, women with children confront the most difficulties. Family budget full of debts, unstable jobs and all the other factors mentioned keep homes at risk. Between 1996 and 1998 the American middle class paid off 26 billions in credit cards and consumer debts through home equity mortgages. As an attorney for debtors in bankruptcy for over 25 years I recommend this book to understand middle class income instability and the increase in bankruptcy filings.