Youth and Experiences of Debt
David Farrugia, Julia Cook, Kate Senior, Steven Threadgold, Julia Coffey, Kate Davies, Barrie Shannon and Adriana Haro
This seminar presents preliminary findings from the FEDUA funded research program ‘Regional youth in precarious times: Work, wellbeing and debt’ and is presented as part of the Newcastle Youth Studies Network seminar series. This program explores the relationship between work, wellbeing and debt for young people living in precarious social and economic conditions in Newcastle and the Hunter. Youth in the Hunter region face intersecting forms of marginality stemming from their regional location, narrowing labour markets and increasing indebtedness. In 2019 the Hunter region was identified as a ‘hotspot’ of high youth un/underemployment in New South Wales which is being heightened by the rise of the so-called ‘gig-economy’ and recent pandemic. Economic precarity has led to a steady increase in rates of problem debt amongst young people. These conditions constitute a new and intensifying intersection of unemployment and indebtedness with consequences for young people’s wellbeing and relationship to the economy. The seminar will present findings from ethnographic research on the apps and spaces used by short term debt services, and from interviews and participatory research with young people about their experiences of debt.
Buy Now Pay Later Financial Products: a new generation of consumer credit?
Consumer uptake of buy now pay later (BNPL) financial products such as AfterPay and Zip Pay has surged since they entered the market en masse in the mid-2010s. This is especially the case in Australia, where BNPL transactions increased by 90% between the 2017-2018 and 2018-2019 financial years (ASIC, 2020). Emerging research and commentary have focused predominantly on the regulatory challenges posed by the BNPL industry. In this presentation, we seek to shift the discussion of BNPL financial products from its sole focus on regulatory issues by putting forward a socio-cultural reading of the rise of these products. Specifically, we focus on how the development of BNPL financial products can be understood in the context of the ‘new adulthood’ (Wyn et al., 2020), during which contemporary young adults are subject to rising expectations of educational attainment, inaccessible and casualised labour markets, highly competitive property markets, and shifting cultural points of reference.
How Indebtedness is Reshaping Youth and Adulthood
This presentation will explore the meanings young people attribute to different forms of credit and debt, and thereby how credit and debt is reshaping the distinction between youth and adulthood. Contemporary youth are increasingly required or encouraged to take loans. HECS debts have increased dramatically over the last decade and young people are also at the centre of a crisis of consumer credit, being the group most likely to be classified as ‘over-indebted’ through their use of credit cards or services such as ‘AfterPay’. In this context, this paper will explore two different forms of credit: those that are understood as an ‘investment’ in a future adulthood, and those that are understood as a ‘failure’ of unsustainable consumption. The paper will therefore show that the structure of credit and debt technologies is now woven into the way that young people make sense of what it means to be young and how they define adulthood. The structure of debt has thereby become fundamental to how youth and adulthood are lived in contemporary Australia.
The Gamification of Debt
The young people in our research had definitions of what are good and bad debts and made distinctions between the way debt feels between using credit cards and Buy Now Pay Later (BNPL) services. An important aspect of this affective distinction is in how BNPL apps utilise the affordances and customs of more sociocultural platforms such as Pinterest, Spotify and Facebook. These include storified ‘on this day’ reminders, anniversary pop ups, waiting time indicators and symbolic rewards. This gamification is a form of affective modulation, with various rewards, notifications, and reminders of previous purchases are often understood by our participants as being a form of entrapment, or at least encouragement to spend more money using the service, but they see benefits of this despite those negative possibilities. The online and automated design of BNPL and app-based loan services closely relate to how young people engage with information generally live their lives, more so than credit cards and banks. Our participants are reflexively aware of this but debt itself is largely seen as a necessity in the precarious financial existence of youth in late capitalism. Debt it is rendered an inevitable occurrence that needs to be negotiated for having an acceptable life in the present and to be able to plan for the future.