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What is Happening to the Middle Class in America?
The stock market boomed in the 1990s, but so did personal and family bankruptcy. The number of families filing for bankruptcy has increased by 400% since 1985 and is now more than one million a year. In the last decade, one in ten families have gone through a bankruptcy proceeding.

Why? "Many in the middle class are economically fragile, barely able to maintain their lifestyle." Baby Boomers account for 55% of bankruptcy filings. People filing for bankruptcy are, on the whole, better educated than the general public.

One explanation is that the bankruptcy law is too easy, and that people are filing when they really could pay their debts. The evidence shows that this cannot be true for more than a small percentage of cases. "The great majority ... are overwhelmed by debt they could not possibly pay."

The five leading causes of bankruptcy in middle class families:

(1) Loss of a job. "For the middle-aged middle class, job loss may be tantamount to forced retirement."

(2) Illness, disability and medical bills.

(3) Divorce has serious adverse financial consequences, especially for women.

(4) Owning a home that the family cannot afford. "Many homeowners are struggling harder than ever to hang on to their chief symbol of participation in the middle class," in part because of the dramatic increase in second-mortgage lending over the past decade encouraged by a change in tax policy voted in the 1980s.

(5) Too much credit. There are 12 credits cards per household currently active in America and more than $500 billion in credit card debt. That debt has doubled between 1993 and 1997.

Keep in mind this is the problem we have during boom times. What will it be like if the boom deflates? And, remember that each family going through such a crisis has increased needs for pastoral care and spiritual support.  In fact, these families also represent a significant evangelistic opportunity. When unchurched people face this kind of high-level anxiety they are willing to consider spiritual issues they usually seek to avoid.

Trend Analysis Report - Source: The Fragile Middle Class by Teresa A. Sullivan, Elizabeth Warren and Jay L. Westbrook (2000, Yale University Press).