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Financial markets and the working class in the USA: an empirical investigation of financial stress

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  • Michael J McCormack

Abstract

This paper investigates the relationship between financial stress and the working class in the USA. Employing a financial stress index created from the Survey of Consumer Finances, I show that working class households are nearly twice as likely to be financially stressed than wealthier non-working class households from 1992 to 2016. A possible explanation of this result could be that the financial expropriation of personal income among the working class has the effect of increasing that group’s financial stress relative to wealthier classes. Working class households in the USA have struggled to afford means of subsistence in lieu of lacklustre wage growth and a tattered safety net. Financial expropriation of these households has operated in tandem with this precarity, increasing financial stress in a time of financialised capitalism.

Suggested Citation

  • Michael J McCormack, 2019. "Financial markets and the working class in the USA: an empirical investigation of financial stress," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(4), pages 867-890.
    • Handle: RePEc:oup:cambje:v:43:y:2019:i:4:p:867-890.
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    File URL: http://hdl.handle.net/10.1093/cje/bez018
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    Cited by:

    1. Stefano Di Bucchianico, 2020. "A note on financialization from a Classical-Keynesian standpoint," Department of Economics University of Siena 824, Department of Economics, University of Siena.
    2. Hulya Dagdeviren & Jiayi Balasuriya & Christopher Nicholas, 2022. "Spatial dynamics of post-crisis deleveraging [Financial geography II: financial geographies of housing and real estate]," Journal of Economic Geography, Oxford University Press, vol. 22(6), pages 1225-1246.

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