Posted 825 days ago

Preparing the Middle Class For Life in Uncertain Times

by Penny Carothers and Tom Sine, Mustard Seed Associates



Anticipating New Challenges Facing the Middle Class
Bill Stevens has worked very hard to adjust back to life in the US after returning from the war in Iraq. But now Bill and his wife Beth are having an even harder time adjusting to losing their home in the recent mortgage meltdown. CNN reports 112% increase in home foreclosure rates in the first 3 months of 2008.

Despite all the discussion about whether the US is experiencing a recession or is headed for one, Americans are feeling the effects. People in Britain and Australia are beginning to feel the impact of American economic troubles too. It is essential that middle-class Christians realize that following Jesus in uncertain times requires that we both reduce our vulnerability and increase our capability for compassionate response. Let’s look at some of the concerning economic trends that are putting growing pressure on many of our lives.

Confronting rising inflation
The newest threat in many countries is global inflation. Most of us feel it most acutely at the gas pump, but our grocery bills are increasing at concerning rate too. The rising costs of food and fuel is hitting the working poor hardest, but many in the middle class are struggling as well. Experts say that the era of cheap food is over, which will have the greatest effect on those living in poverty locally and globally. Some economists are very concerned that if oil suddenly soars to $200 a barrel it could trigger run away inflation.

Confronting soaring debt
Fueled by ever-rising levels of credit, Americans have been on a long shopping spree, buying huge quantities of consumer goods out of China and running up record credit card debt. According to Newsweek, household debt (including mortgages) in 2007 totaled $14.4 trillion, or 139% of personal disposable income. Seven years prior, those figures were $7.4 trillion and 103% of income. That’s an average of $112,043 for mortgages, car loans, credit cards and all other debt combined. If we compare these levels against consumer spending in 1980, we see that the difference accounts for $1 trillion in higher spending on consumer goods and services. The authors of Up to Our Eyeballs: How Shady Lenders and Failed Economic Policies Are Drowning Americans in Debt contend that “Americans are borrowing more because incomes have failed to keep up with the cost of healthcare, housing and other basic needs.” ¹ Also as a result of globalization many of the good paying manufacturing jobs have gone abroad and many in the middle class are discovering, like the working poor, that jobs in the service industry simply do not pay a living wage.

But many Americans, Brits and Australians are experiencing soaring debt because we have been seduced by images of lavish lifestyles to spend more than we make. In fact, residents in the US and in other Western countries are running negative savings rates, which simply is not sustainable.

American consumer confidence has kept the global economy booming. This recent downturn in the US economy has caused American consumer confidence to tumble to its lowest level in 28 years.² Those in the middle class are feeling much more economic uncertainty everywhere.

Confronting the great risk shift
To make matters worse, in this highly competitive global economy, both businesses and governments are seeking to reduce their economic drag by cutting back benefit programs to both the poor and middle class. For example, in the US we are seeing businesses seriously reducing or ending pension and healthcare benefit programs. In the future, we are likely to see the growing erosion of the safety net for many in the middle class, increasing vulnerability during economic downturns.

Implications for the Middle Class
The reality is that the middle class in not only the US, but also Australia, New Zealand and the UK, are struggling with swelling personal debt, declining savings and growing inflation. Frankly, this new global economy seems to have made many of us more vulnerable already. Stop and think. What happens if inflation soars or we slide into a recession? Quite simply, many middle-class Christians will be so busy trying to avoid being pulled down by huge personal debt that we will not be available to help our poorest or most vulnerable neighbors whose very survival will likely be at stake. Therefore, if we are serious about faithfully following Jesus in uncertain times, middle-class churches need to seriously reduce economic vulnerability and increase the capacity for compassionate response.

Creating new possibilities

Reducing vulnerability and increasing the capacity for compassionate response
We can reduce our vulnerability by 1) getting out of debt as rapidly as possible, 2) seriously reducing our consumer spending, and 3) perhaps moving to a less expensive dwelling and selling vehicles or items that we may not need. If we can significantly reduce both our levels of debt and how much we spend on our own lives, then we have the opportunity to free more money or time to help economically empower our most vulnerable neighbors, both in our own communities and in other parts of the world. In other words, if we can significantly reduce our vulnerability, it will increase our availability to those at the margins both in times of stability and in times of economic crisis.

Creating ways to reduce our vulnerability
Janet and Bob were only paying interest on their $23,000 credit card debt and not making a dent on the principle. They made a commitment to reduce their debt to a point at which they could pay it off each month and stop paying interest. It took serious sacrifice, cutting back on lattes and wardrobe spending for 18 months. When they achieved their goal, they had an out of debt party with their friends.

Brent, Sharie and their two kids decided to not only reduce their vulnerability but to increase their availability to help others. They sold their four-bedroom house in Grand Rapids and bought a smaller three-bedroom house. As a result of downscaling they cut their mortgage payments by almost half. They then used a generous portion of the money they saved to help others in need.

We encourage churches to create courses for members to learn how to follow Jesus by learning to be more responsible stewards. Reducing our debt and simplifying our lives increases availability to express God’s love to others in uncertain times. We also encourage churches to develop Economic Crisis Preparedness Resources not only to assist their members, but also the vulnerable in their communities in times of economic downturn. While we have found a number of denominations and churches that have created Disaster Preparedness Resources we haven’t found any resources for Economic Crisis Preparedness. If you find some, let us know.

Creating sustainability with economic and agricultural cooperatives
Andrew Jones (aka Tall Skinny Kiwi) and his family and friends in the Orkney Islands in Scotland just launched The Sorting Room with abundant hot chai and helium balloons. The Sorting Room is a birthing place for new local businesses and economic cooperatives for the purpose of creating a more sustainable community. They also provide a small performance space, a reading area, a small arts library, printing equipment, art courses and the first free wifi space in the community. There is also space for local artists or businesses to sell their wares to increase the local economy.

On the Isle of Eigg, also in Scotland, the community has just gotten off their dependency to imported diesel fuel to generate electricity. The Island now creates its own electricity out of sustainable sources. They use a combination of solar panels, wind turbines, and a hydroelectric generator, all located strategically on the island. They are linked through a single grid with storage batteries to provide a back-up. This was the first of a series of cooperative ventures in which residents worked together to improve the quality of their lives.³

YouthGROW is an agricultural/economic cooperative in Massachusetts. The cooperative hired 14 teens who grew 750 pounds of organic produce on an abandoned lot. The project provided high quality produce to an urban community, restaurants and those at the margins while providing income for the teenagers.

We at the Mustard Seed House grow about 40% of our produce on our urban lot. Mustard Seed Associates is going to begin offering resources on creating sustainable lives, families and communities by creating agricultural and economic cooperatives.

We encourage churches to re-imagine how to follow Jesus in uncertain times by becoming birthing centers to create new sustainable agricultural and economic cooperatives in your local communities. Imagine how we could help those in our communities, particularly the marginalized, to create more sustainable and lifestyles in tough times and stable times.

1. Jose Garcia, James Lardner and Cindy Zeldin, Up to Our Eyeballs: How Shady Lenders and Failed Economic Policies Are Drowning Americans in Debt, quoted by Michelle Singletary, “The Color of Money,” The Boston Globe, May 4, 2008, accessed May 30, 2008 here.
2. “Lowest Reading Since 1980 For Consumer Confidence,” The New York Times, May 17, 2008, accessed May 30, 2008 here.
3. Emilie Boyer King, “An Island of Self-Sufficiency,” The Christian Science Monitor, March 27, 2008, p. 13.

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