It’s the net worth, stupid. Recently, Kevin Drum has written several posts wondering why U.S.-ians are so cranky about the economy when, based on the statistics he cites, things seem to be doing pretty well. Well, here’s a simple table that might explain a lot:
If your net worth is less than it was fifteen years ago, this might be a source of discontent. Not only do you have less stuff, but, as importantly, you have less security. And this seems to have much to do with increased debt (boldface mine):
What has increased significantly is debt. The survey shows that:
•Three-quarters of U.S. families owed money in 1998 and 2013, but the median amount climbed 30%, to $60,400.
•Two-thirds of working-class households had debt in both years, while the median amount jumped 48%, to $21,300.
•Among lower-class households, debt jumped 68% to $10,600. The percentage of families with debt also rose, from 47.3% in 1998 to 52.1% in 2013.
•Increases were less dramatic for the middle class. About 80% had debt in either year, but the amount rose 9%, to $39,900.
The culprit isn’t credit card debt, by the way. The percentage of families owing on their cards shrank, sometimes dramatically, in every income bracket. What rose is mortgage and installment loan debt. When you don’t have savings to pay for homes and cars and college, you take on more debt.
Basically, people are having to borrow more to remain in the middle class.
Yet we wonder why there is anger.