The Fragile Middle Class: Americans in Debt [Hardcover]

Teresa A. Sullivan (Author), Elizabeth Warren (Author), Jay Lawrence Westbrook (Author)

Book Description

Publication Date: March 11, 2000

Since 1997, the number of American families filing for federal bankruptcy annually has exceeded one million. By most measures, those who file are members of the middle class - a group that has long provided stability and vitality for the American economic system. This raises the troubling question: why, during the most remarkable period of prosperity in our history, are unprecedented numbers of Americans encountering such serious financial trouble? The authors of this important book analyse court records and demographic data on thousands of bankruptcy cases, as well as debtors' own poignant accounts of the reasons for their bankruptcies. For many middle-class Americans, the findings show, financial stability is fragile - almost any setback can be disastrous. The erosion of job stability, divorce and family instability, the visible and invisible costs of medical care, the burden of home ownership, and the staggering weight of consumer debt financed with plastic combine to threaten the financial security of growing numbers of middle-class families. The authors view the bankruptcy process in the light of changing cultural and economic factors and consider what this may signify for the future of a large, secure, and dynamic middle class.

Editorial Reviews

From Publishers Weekly

A sizable portion of the U.S. middle class--far more than pundits acknowledge--teeters on the brink of economic failure, according to this fascinating, alarming study. Noting that personal bankruptcies have hit record levels (more than one million American households file for them each year), the authors (As We Forgive Our Debtors) zero in on middle-class vulnerability through a detailed survey of 2,452 people across the nation who filed for bankruptcy during the 1990s. Included in their sample are teachers, accountants, computer engineers, sales clerks, executives, entrepreneurs, doctors and dentists--solidly middle-class folk who fell into financial disaster. Employment problems (layoffs, "skidding" to a lower-paying job, part-time work) were the biggest factor, as was the overuse of credit cards. Respondents also cited unpayable medical bills, loss of income from illness or accident, the financial burden on single-adult households that result from divorce and home buyers purchasing more than they could afford. Illustrated with tables and graphs, this crisply written report is occasionally dry, but many readers will identify with the down-to-earth case histories. A good number of the profiled personal-bankruptcy filers are full of regret, self-blame and humiliation, contradicting the popular perception that filing is an easy way out of one's economic woes. While the authors offer no comprehensive solutions to this societal malaise, their chilling diagnosis of middle-class affliction demonstrates that we all may be only a job loss, medical problem or credit card indulgence away from the downward spiral leading to bankruptcy. (May)
Copyright 2000 Reed Business Information, Inc.

From Library Journal

Following up the authors' 1989 As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America, winner of the American Bar Association Silver Gavel Award, this book considers the middle class in terms of bankruptcy. The authors seek to discover why so many families are in economic trouble. They note that while Americans during the 1990s lived in a time of prolonged economic prosperity, there was, paradoxically, a 340 percent increase in the rate of personal economic failure between 1981 and 1999. Using a 1991 study of 16 federal bankruptcy districts in five states, the authors find that, like "proverbial canaries in the mine shaft," the bankruptcies highlight five key stresses that America's middle class experiences today: unemployment, credit card and personal debt, sickness and injury, family problems, and the high cost of home ownership. Clear in purpose, this important work is highly recommended for academic and larger public libraries.
-Norman B. Hutcherson, Kern Cty. Lib., Bakersfield, CA
Copyright 2000 Reed Business Information, Inc.

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Product Details

• Hardcover: 400 pages
• Publisher: Yale University Press (March 11, 2000)
• Language: English
• ISBN-10: 0300079605
• ISBN-13: 978-0300079609
• Product Dimensions: 9.5 x 6.4 x 1.3 inches
• Shipping Weight: 1.7 pounds
• Average Customer Review: 4.6 out of 5 stars  See all reviews (13 customer reviews)
• Amazon Best Sellers Rank: #933,094 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

33 of 34 people found the following review helpful:

5.0 out of 5 stars Lessons from the '90s, July 15, 2000

By 

J.L. Acevedo-Colon, Esq. (Territory of Puerto Rico, USA) - See all my reviews

This review is from: The Fragile Middle Class: Americans in Debt (Hardcover)

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.

41 of 45 people found the following review helpful:

5.0 out of 5 stars Not Only Fragile but Vulnerable, October 10, 2000

By 

Thomas J. Yerbich (Anchorage, AK USA) - See all my reviews

This review is from: The Fragile Middle Class: Americans in Debt (Hardcover)

As a 20-year bankruptcy practitioner,I believe this book is a "must read" for any one whose income is less than seven-figure. It could happen to you! The factors leading to bankruptcy are varied, but have a common thread: an over extension of credit and a "hiccup" in life that makes it unduly burdensome or impossible to shoulder the debt. The seductive siren call of "For everything else there is MasterCard" and "VISA, everywhere you want to be" or "nothing down, no interest, and no payments for a year" is for many irresistible. Credit cards can be very convenient but also, as the authors point out, hazardous to one's economic health. Credit cards should come with a warning similar to the Surgeon General's warning for tobacco. While the explosion in bankruptcy filings during the past decade is fairly spread over the various age groups, it is the under 30 group that is the most vulnerable in the future. With almost limitless student loan availablility and multiple multi-purpose credit cards, i.e., VISA and MasterCard (even to high schoolers), the ability to incur indebtedness far beyond any reasonable realistic expectation of ability to repay is pandemic. When a person can leave college saddled with $50,000 or more in student loan obligations and incur an additional $50,000, or more, in "small bite at a time" debt in the span of less than 5 years, it does not take much of a "hiccup" in life to bring the house of cards down. As the authors so well illustrate, consumer finance education and teaching fiscal discipline at the high school level is an absolute must. Those who practice "immediate gratification," like Humpty Dumpty, are headed for a major fall and bankruptcy can not put them back together again.

25 of 26 people found the following review helpful:

5.0 out of 5 stars Wake-up Call for Women and the Middle Class, May 31, 2000

By A Customer

This review is from: The Fragile Middle Class: Americans in Debt (Hardcover)

This is an important book for women to read. It explores how our seemingly-secure middle class lifestyles may be shattered by a job loss or a serious accident or illness. The authors explain how credit card debt makes families particularly at risk. The most disturbing chapter to me was the description of what happens to women following divorce. The authors show that a divorced woman has a 300% greater chance of filing for bankruptcy than her married sister. Can it be, as the authors say, that a woman's economic success is still largely dependent on marrying--and staying married?

This book made me think about social class mobility in a different way. The authors study middle class people on their way down. They show how people with good educations and in decent jobs can have their lives turned upside down by a layoff, a job transfer, an illness, an accident, or a divorce. According to the authors, more than a million families each year are going to the bankruptcy courts for protection.

The book is well-written, lively and sometimes witty. A good, but disturbing, read.