Data, Data, Data

Provost (at Michigan) Teresa Sullivan presented the second paper of the morning, Debt and the Simulation of Social Class. She opened by repeating two conversations she heard while waiting at the airport yesterday. One involved a couple that was concerned that one of their neighbors might lose their home, and might have to file for relief under Chapter 13 of the US Bankruptcy Code. The second conversation involved parents who were discussing their child, a soon-to-be-college graduate, and the amount of student loan debt the child had. This debt level, the parents feared, would effect the type of job their child would be able to have, at least until the loan debt was repaid. She then observed that while debt is clearly on the mind of many people, it’s not a topic that has really concerned most sociologists (other than the ones who are attending the conference!)

Provost Sullivan emphasized that sociologists need to shift their focus from income to a focus on wealth. This is especially important, she notes, given the huge wealth disparities (but increasingly shrinking income disparities) between similar white and black households. She then gave us a sociological view of debt and consumption. Historically, debt was thought to be used to simulate a social class (that you haven’t yet attained), though consumption had to be regulated for some people (like those who file for bankruptcy). Thus, debt and consumption would help folks move up into another social class.

She argues, though, that the data suggest otherwise. People are increasingly going into debt to maintain their current social class (and prevent downward mobility) not to have upward mobility. So, folks borrow to prevent sliding into a lower class. Indeed, for most Americans, debt isn’t used strategically: it’s just used to help folks limp along and make ends meet. Though she has been involved with some of the largest bankruptcy data projects, she emphasized that sociologists haven’t studied debt much partly because of the lack of available data and the cost to collect it. She ended by suggesting that, without greater access to private or propietary data, it’s unlikely that sociologists will focus on debt any time soon.

Later, during the question and answer period, Professor Sullivan elaborated on the problems with collecting US government data and the current push by some to convince the US Census Bureau to stop collecting any personal data. She stressed that she didn’t think that there was some type of conspiracy to suppress data collection. Others in the room were more willing to believe the conspiracy theory, and I must confess that I fall into that group. It’s harder to convince the government to change certain laws, or otherwise provide relief to struggling consumers if you lack data to prove there’s a problem. So, to avoid those pesky requests for consumer reform, it would just be easier to eliminate the data. But, then, maybe I’m just too cynical.

Professor Kevin Leicht, a sociology professor from the Univ. of Iowa, discussed the political consequences of having a society that is constantly in debt (i.e., declines in social capital, personal stress caused by economic insecurity). He then notes the real shift in power away from wage earners and stresses that borrowing largely is serving to replace earnings. The middle-class, especially, is borrowing more and more primarily because the big-ticket items that the middle class buys have increased dramatically (homes in certain neighborhoods, college tuition, child care) and other aspects of their financial lives also have changed (employees now increasingly fund their own pensions). He critically observes that we will loan more middle class workers money (teaser mortgages, no money down loans), but society seems unwilling to lobby to get them actual money in the form of higher wages.

Comments

[Jain]

Is it a uniquely American fear that one's child may be forced to take a high paying job in order to repay an investment in human (or should I say social?) capital?