Neal Gabler, writing in The Atlantic, begins his essay with this disturbing statistic from a survey conducted by the Federal Reserve Board. The survey asked respondents how they would pay for a $400 emergency. They found that 47 percent of respondents said they would cover the expense by borrowing or selling something. In other words, they could not come up with the $400 any other way.
Gabler asks: Who knew? He then answers that he knew, because he is one of that 47 percent. He said he knows what it is like to swallow his pride and constantly dun people to pay him so he can pay others. He knows what it is like to dread going to the mailbox because it usually has more new bills and rarely a check to pay for them. He knows what it is like to tell his daughter that he may not be able to pay for her wedding.
His point is you wouldn’t know this by looking at him. You could look at his resume as a writer and conclude he was doing fine. He is in the middle-class (even upper middle class) with five books and hundreds of articles to his name. That is why he wrote about what he calls, “the secret shame of middle-class Americans.”
One financial psychologist says that you are “more likely to hear from your buddy that he is on Viagra than that he has credit-card problems.” To struggle financially is a source of shame. The only protection is silence.
Another study concluded that nearly half of American adults are “financially fragile” and are “living close to the financial edge.” And it is worth mentioning that this is not just a liquidity problem: that they don’t have enough ready cash in their checking and savings account. Median net worth has dropped significantly.
The lesson here for everyone from politicians to employers is this. When we say that American workers are hurting, it is actually much worse then we might suspect.