Furthermore, there is evidence that while stock values have risen in recent years, overall family wealth has grown very little for the middle class. For one thing, families continue to accumulate debt. And the rise in value of stocks and retirement accounts has been offset by a decline in other kinds of savings, such as the old-fashioned bank account. It is entirely possible for an American family to have both a growing stock portfolio and falling economic security at the same time. Every three years, the Federal Reserve Board issues a Survey of Consumer Finances.
More families now live on the edge of disaster.
From 1983 to 1998, the proportion of American families with zero or even negative net worth actually grew from under 16 percent to 18 percent. This should not be a great surprise to anyone who watches television. Observe all those advertisements for home-equity loans worth more than the value of your house. One trembles to contemplate what would happen in an economic downturn in which jobs are lost and housing values decline. According to Professor Wolff, middle-income families headed by people between the ages of 25 and 54 years had enough financial reserves in 1998 to sustain their normal consumption for only 2.2 months, down from 3. 6 months in 1989.