Yet they are in financial distress. This is not poverty. So what is it? As people move up the income ladder, they escape material shortages and consume more. At its core, this relentless drive to spend any money available comes not from a desire to consume more lattes and own nicer cars , but, largely, from the pressure people feel to provide their kids with access to the best schools they can afford purchased, in most cases, not via tuition but via real estate in a specific public-school district.
But where would that show up in this measure? Other existing terms fall short too. But this is an unfortunately narrow framing of a financial crisis whose casualties are so often women.
The failure to put a proper name on this dynamic is a part of a broader failure to understand it—and to see it as a problem at all. How many are earning more? But a measure of income alone completely misses the fact that few are getting off this earn-and-consume hamster wheel, even as they earn more. In the absence of a good understanding of what is going on, people frequently disparage those who are suffering.
We have real poverty to worry about. What is that something that is preventing people from turning their earnings into prosperity? And making more money would certainly help Americans afford better quality goods, housing, services, and so on—all of which are incredibly important. But there is little reason to think that higher wages would enable families to build up a financial cushion that would allow them to sleep easy at night. In fact, even the very richest largely do not put away what economists would consider a healthy retirement savings.
For the vast majority of people, higher wages do not seem to translate into financial security. So it stands to reason that the problem—insofar as it is in any real sense a definable, single problem—is driven by something that is happening on the spending side of the equation. The place to start is by looking at what they are spending their money—and particularly their loans—on.
