The Resource Database contains varying thoughts and arguments about the middle-class, alternative lending, the banking system, and financial literacy. It is a vast, and still growing, resource for anyone who wants to learn more about the changing landscape of many American families and the policies and regulations that shape their lives.
There is so much information, often contradictory, and it begs the question “what can we learn from this?” The simple answer is that we can learn who these people are. We can learn that these individuals are not just borrowers or consumers, but they are families who have struggled to find a footing in a world dominated by statistics and numbers, they are families who have been left behind in the conversation about lending and banking in our country.
Neal Gabler shares his experience of what it means to be middle-class, which includes stories of borrowing money from his children and other family members. Gabler did everything right, according to middle-class standards. He went to college and got a good job, but those indicators did not prepare him for the debt rich lifestyle he found himself in. Lili Holzer-Glier shares her experience of working at a Brooklyn food bank where she found visitors are working-class and middle-class people who have fallen upon difficult times. Alissa Quart writes about middle-class teachers who work for Uber on the weekends and at night just to make ends meet.
These middle-class stories are not singular; you can find these stories of the American middle-class everywhere you look.
Hanging above my desk is an intricate drawing that I often look at to try and understand this topic. It is a web of variables that have led to the middle-class demise. It includes words like ‘The Great Recession’, ‘Housing Crash’, ‘Unemployment’, ‘Policy’, and ‘Middle-Class Desires’. It took me awhile to piece it all together, but all these words are connected and have helped create a new middle-class for America.
The Pew Research Center found that the middle-class were hit the hardest in the decade of the Great Recession, even more so than their lower- and upper-class counterparts. Mean family income declined in all income tiers, but the middle-class also shrunk in size, which indicates people were falling out of the middle-class. Miller and Zwicki urge policy makers to understand who borrowers are of high-cost loans because without these loans where would these people turn to in order to meet their needs, especially since traditional credit is denied to high-cost loan users. Bank overdrafts are often cited for being an alternative to high-cost loans, especially after regulation. Marc Anthony Fusaro researched bounced checks and found that overdraft and bounce check rates are in the four digits, ranging from 1,718% to 6,350% implicit APRs, compared to high-cost loan APRs which are three digits.
We cannot understand the new middle-class without piecing together the policy that affects them, the regulations that can change their lives, the economic instability that did change their lives, and the monumental desires that all middle-class people still want, such as a house in a great school district and college for their children.
The Resource Database can help you by unravelling the web and piecing together the story of the new middle-class.