A recent diarist (whose diary I am sadly now unable to locate) took a rather grim look at expanding personal debt, which has resulted in the vast difference between wage growth, and the cost of such basics as housing and transportation.
A new LAT article examines another, though related aspect of the financial instability being faced by wage earners, even the relatively well off: the increasingly devastating consequences of such common events as divorce, illness, job loss and death.
The thrust of the article is that though the odds of such events during a family's working life have remained relatively constant over the last 25 years, double the number of families suffering such setbacks now experience a loss of 50% or more of family income.
The result is that families...operate with little margin for economic error. And they can pay a steep price if anything goes wrong. The price grows exponentially if...several things go wrong at once.
more below the fold
Some of the main causes of this increased wage volatility will come as no surprise to kossacks:
Over the last quarter of a century, many safeguards that people once counted on to shield them from financial harm have been weakened or completely lost. These include formal protections such as guaranteed corporate pensions and state and federal unemployment benefits. And they include informal ones, like the loyalty that employers once showed their workers by offering secure jobs with relatively little prospect of long-term layoff.
One thing that struck me was this view of a little discussed (well here at least) safety-net: bankruptcy, filings of which have increased from less than 300,000 in 1980 to 1.58 million this year:
Bankruptcy is one of the oldest economic safety nets that the government provides working people. It was so important in early America that the Constitution specifically authorized Congress to establish laws on the subject.
In effect, bankruptcy limits debtors' losses to the value of most or all of their current belongings, shifting the risk of any greater losses onto creditors. In this way, Abner Lipscomb, a 19th-century Texas Supreme Court justice approvingly noted, people can "commence again, Antaeus-like, with renewed energy and strength and capacity for business."
But even this protection of last resort is under assault by Bushcorp:
Bush administration officials suggest that the rise in bankruptcies reflects profligacy among Americans. They are particularly incensed about Chapter 7 bankruptcies, which let people effectively wipe out their debts after forfeiting most of their assets but not their future earnings. These critics of the law want to change it by making it harder to go bankrupt.
A Chapter 7 filer is a predatory borrower, Assistant Treasury Secretary Wayne A. Abernathy suggested in a speech last year, someone who "in a calculated way borrows as much as he can, with little thought of paying it back, or in some cases, with no intention of paying it back."
But of course moral laxness has nothing to do with it. Wanting to own a decent house in a decent neighborhood has nothing to do with moral laxness. Having one's job outsourced or downsized, or falling ill, or having a spouse die doesn't reflect moral laxness. It means that the debt necessarily incurred to obtain basics has vastly outpaced wages, and when coupled with the job instability in this increasingly Darwinian market economy, the slightest misstep can escalate into a calamitous collapse.
It seems that Bushcorp's assault against any social safety net applies to those for ALL wage earners, not just the poor and working class who are the favorite targets of its (I refuse to say "his", it implies too much humanity in the decision-making process) regressive policies.
Just another show of contempt for those of us who earn by the sweat of our brows, or the quality of our ideas, rather than the dividends of our portfolios. "Ownership Society" indeed.