How Women Go Bankrupt

As the world struggles to emerge from the economic near-collapse of last fall, there is one sub-group that has slid below the waterline in record numbers: formerly middle-class women. A new report shows that a million American middle-class women will find themselves in bankruptcy court this year. This is more women than will “graduate from college, receive a diagnosis of cancer, or file for divorce,” according to the economist Elizabeth Warren . Their plight, symptomatic in many ways of the plight of women around the world, holds lessons for us all.

These bankrupt women are better educated than their male counterparts: most have some college; and more than half own their own homes. What tipped them from middle-class lifestyles to incomes just above the poverty line were likely to have been one or all of three factors. Two are economic, and, for many women, the third may be emotional.

First, these women tend to be awash in debt. Just about everyone spent above their means in the recent bubble, but middle-class women have a special relationship to debt. Many of them have jobs that require them to dip into credit lines just to stay afloat. But others have been successfully targeted by luxury-goods manufacturers and credit-card companies, which benefit from the way that mass culture ties certain kinds of consumerism – the latest designer clothes, this season’s “it” bag, the right highlighting, and even the trendiest sports car – into a narrative of successful femininity.

Nor is this pressure confined to the United States. New middle classes are emerging globally, and magazines like Cosmopolitan and Vogue are targeting newly middle-class women in India and China – many of them part of a generation with its own disposable income for the first time ever in their family histories – with the very same luxury goods.