I feel a grave disturbance in the Force...
I grew up in the city of Madison, Alabama. For those unfamiliar, Madison is one of the largest and wealthiest suburbs of Huntsville (and I use the term suburb very loosely here, as Huntsville itself is only about 150,000 people strong and the various suburban areas mostly aren't even incorporated cities). As of the 2000 census, the median household income was $63,849 (via Wikipedia), as compared to the national median income of $46,326 in 2005 (also via Wikipedia). My apologies for the different years, that's what I found with minimal effort. However, given that the 2005 numbers will have grown from 2000, the result is probably that the gap is even bigger than shown. The importance is not the exact numbers. Rather, it is to show that Madison is mostly middle to upper class in its basis - definitely in the top 50% of incomes, and probably in the top 35% (generalized, of course).
I don't drive around the area much anymore, as I currently live in Huntsville proper. Madison is usually too far out of the way to be worth the drive - with a few notable exceptions. The nearest grocery store is technically in Madison, although at the very edge of it, as is the nearest Wal-Mart. Since the Wal-Mart also happens to be the nearest place for general shopping, I am there on average about once per week and a half.
The nearest hardware store also happens to be in Madison, albeit clear on the other side. Normally I don't spend a lot of time there, but since I'm getting ready to sell my house, I've been there about once every two weeks on average for most of this year. This forces me to drive across Madison (which is a pain because there really isn't a quick way to do so).
Madison also happens to be a very quickly growing area, and has been for quite some time. So it's common to see new stores appear almost literally overnight, and certainly between my two-week drive throughs.
What aren't common in Madison - or, rather, hasn't been until now - are payday lenders. Yes, I know that payday lenders are everywhere. Still, they are far less common in wealthy areas. The reason for this is rather obviously because wealthy people don't need payday loans. In the last month and a half, however, I have seen two new payday lenders appear in Madison, less than three miles apart.
I find payday lenders to be disturbing to begin with. Although I am generally NOT a fan of government regulation, payday lenders are an area where I believe the government is actually not regulating nearly enough. Easily available credit is, in general, a good thing for an economy. However, the predatory practices of payday lenders very often lead to financial ruin for their customers - the very reason that most wealthy people (who generally get that way because they understand money) avoid them like the plague.
The appearance of these centers in an upper-middle class area is particularly disturbing. It is an indicator to me, albeit an anecdotal one, that some sectors of the economy are on shaky ground. Particularly, it's an indicator that many middle to upper-middle class families are on shaky financial ground, and from a macroeconomic perspective that's particularly troubling. If the upper-middle class is in trouble, where does that leave the lower middle class and the poor?
So here's the important question: is this growth of payday lenders just a local experience, or is it happening across the country? More importantly, what are the deeper causes at work here, and what do they portend for the near to medium term future of our economy?
I don't know the answers to these questions, but I think I'm going to make an effort to find out.
Update: Added to today's OTB Linkfest.
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