No Job, Loads of Debt: Covid Upends Middle-Class Family Finances Reply

The economic impact of the pandemic has been to proletarianize the middle-class and lumpenproletarianize the working class, while further concentrating wealth into the proverbial 1%. Fortunately, the traditional lumpenproletariat has demonstrated the proper response to such events. Keep those pig pens burning and keep those Wal-Marts looted.

By AnnaMaria Andriotis

Wall Street Journal

Until mid-March, Alysse Hopkins earned a comfortable living in Rockland County, N.Y., representing clients in foreclosure cases and personal-injury lawsuits.

In a good year, the 43-year-old lawyer and her husband, Ian Boschen, 41, together brought in about $175,000, the couple said—enough to cover the mortgage, two car leases, student loans, credit cards and assorted costs of raising two daughters in the New York City suburbs.

After the coronavirus halted many foreclosures and closed courts, her work dried up. Unemployment benefits have helped, Ms. Hopkins said, but the family is running low on savings and can’t keep up with $9,000 in monthly debt payments including mortgage installments. “It frustrates me to not be able to earn a living,” she said. “I have a law degree, almost 20 years of practice.”

Millions of Americans have lost jobs during a pandemic that kept restaurants, shops and public institutions closed for months and hit the travel industry hard. While lower-wage workers have borne much of the brunt, the crisis is wreaking a particular kind of havoc on the debt-laden middle class.

Debt didn’t present a major problem before the coronavirus. The job market was booming and median household incomes were rising, allowing families to keep up with payments.

American families with nonhousing debt making over $98,018 a year in pre-tax income owed an average of nearly $92,000 of such debt in 2016. That’s up 32% from 2004, adjusted for inflation, according to an analysis of Federal Reserve data by the Employee Benefit Research Institute, a nonpartisan nonprofit research group.

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