Laura McCloud Department of Sociology and Social Work Pacific Lutheran University

 Debt in 21 st Century America  Discussion of “The Fragile American: Hardship and Financial Troubles in the 21 st Century”  Debt and hardship since the bubble burst  Concern about debt

 Inequality trends  Rising costs  Banking deregulation  Financialization  Individualized risk

Rising costs Everything got more expensive Particularly necessities

BEFORE...AFTER

 Neoliberal economic policy +  An individualistic culture

 The paradox of debt  Weighing in on the “good debt”/”bad debt” debate  Expanding The Fragile Middle Class

 Our understanding of stratification is growing  Understanding financial hardships  Experiencing hardships may be bad luck  Our ability to recover from them is not  Some hardships are worse than others

 What we learn from bankruptcy research  Important class differences  May be eroding  A national view of hardship and financial troubles  Need for a representative, updated test  Multiple financial troubles

 Consumers face a range of financial problems  No clear credit trouble trajectory  Hardship creates financial limitations  Increasing the likelihood of default  Increasing problems with access to credit

 Looking beyond bankruptcy, looking at class  Class shapes how we experience hardship  Middle class more vulnerable than upper class  Lower class also vulnerable  No class is immune from the financial implications of hardships

 2004 Survey of Consumer Finances  Nationally representative  Extensive financial data  Multiple imputation ▪ 5 data sets  N = 4,159 respondents who ever applied for credit

 Financial troubles  Declared bankruptcy  Defaulted on payments  Denied credit  Offered less credit  Hardships  Poor health  Divorced or widowed  Unemployed  Income disruption

Declared bankruptcy Defaulted on paymentsDenied credit Offered less credit Hardship Poor health1.539***3.804***1.469***1.803*** Divorced or widowed1.593*1.290*1.212**1.600 Unemployed1.476***1.911***1.317***1.023 Income disruption1.732***1.935***1.420***0.614*** Social class Middle class2.422*** ***1.104 Upper class1.017*0.331*0.591*1.695*

Declared bankruptcy Defaulted on paymentsDenied credit Offered less credit Poor health5.620***2.291**1.440**0.244 Divorced or widowed2.572*** **0.534 Unemployed **0.000 Income disruption1.157**4.081**2.031***0.000

Declared bankruptcy Defaulted on paymentsDenied credit Offered less credit Poor health1.395***4.541***1.471***2.009*** Divorced or widowed1.468*1.479**1.009*1.717 Unemployed1.779**2.020***1.350**0.911 Income disruption1.903***1.632*1.375**0.616*

Declared bankruptcy Defaulted on paymentsDenied credit Offered less credit Poor health1.595**5.500**1.350***2.744*** Divorced or widowed Unemployed2.529**3.529***1.659**1.971*** Income disruption2.476**2.202**

 Poor health and job loss most associated with financial hardship  The “great risk shift” (Hacker 2006)  The importance of credit in American households

 Economic instability and depression  Credit reform  Credit tightening  Declining credit use

 Cash is king?  Defaults, not delinquencies  Consumer debt as a safety net

 Universal vulnerability to poor health  Changing financial obligations in households  Increasing importance of access  Young adults starting out in the red  Unemployment, underemployment and low- wages