Predatory Resources: Race, Class, and the Unequal Political Effects of Debt

• In Event: Inequality and the Politics of Consumer Debt and Debt Relief

Abstract

Borrowing has become the American way of life. From credit and debit cards to student, auto, mortgage, or payday loans, most of us rely on financing to pay for everything from a cup of coffee to a college education. On the one hand, access to credit can act as a resource for many, helping Americans to afford daily necessities, to build assets, and to achieve social mobility in the absence of better wages or more robust government social support. On the other hand, access to those resources comes with a steep cost. According to the Federal Reserve, non-mortgage consumer debt currently exceeds 3.8 trillion dollars, up from 2.5 trillion dollars at the onset of the 2008 financial crisis. Americans also owe an additional 15.2 trillion dollars in mortgage debt. And these debt burdens are not distributed equally, with low-income, women, and borrowers of color typically paying a steeper price to borrow. Despite the significance of consumer financing in the lives of ordinary Americans, scholars know very little about how the growth in consumer debt influences people’s politics. Drawing on original survey data collected as part of the 2020 Collaborative Multiracial Post-Election Survey (CMPS), this paper explores how people’s reliance on different forms of debt—both predatory and asset building—shapes their propensity for political engagement. It focuses specifically on how different forms of debt generate disparate political outcomes according to the race and class of borrowers, with some borrowers experiencing demobilizing effects from their predatory debt burdens, while others experience participatory boosts from asset-building resources. Ultimately, the paper sheds additional light on the consequences of an unequal American political economy.

Author

• Mallory E. SoRelle, Duke University