Wage slave, debt slave
This article has its roots in an article I wrote some time ago that used the terms wage slave and debt peonage--terms that some people objected to. Those making free choices aren't slaves, they said, even if their poor choices result in a hard life. There's some truth to that. But there's also some truth to the notion that our system makes it easy--almost automatic--for people to trap themselves.
I've thought about it a lot since then, and found that the terms still resonate with me. It's true that the system makes people complicit in the process that traps them, but that fact doesn't make it okay. It seems to me that the system is designed, whether consciously or not, specifically to get people locked into it.
(The article where I used the terms, by the way, was this one: Self-sufficiency, self-reliance, and freedom.)
It starts with student loans--available to any student, pretty much without regard to whether their course of study will give them the skills and certifications that will produce an income to support the debt load.
Students with parents who are both generous and affluent can escape. (I largely did.) Students who are both unusually smart and unusually wise, or else are lucky enough to get very good, thoughtful advice, can escape. But most students come out of college with debts that lock them into the money economy. They have no choice but to earn enough money to pay off that debt--on top of the money they need to support themselves, of course. Even bankruptcy won't free them.
Which isn't to say that student loans are evil. For many poor students who couldn't otherwise afford to get an education, they're a marvelous tool--something that can break generational poverty and let people aspire to some of the great things that can follow on from education.
But for too many people, student loans are a default choice that they make--often before they've even graduated from high school--without even imagining that there are alternatives.
And that's just the beginning of it. The default path is to graduate from college and then get a job to pay off the student loan (and pay living expenses). The wise graduate might know that it'd be a good idea to get that loan paid off quickly, but that's still likely to take a decade. It's not practical to put your life on hold until then, so you proceed with all the ordinary aspects of living your life: getting married, having kids, buying a house--with the attendant mortgage.
Mortgages are no more evil than student loans. If you buy a house that's well within your means, a mortgage can be cheaper than renting.
But just like a student loan, a mortgage traps you in the money economy--you have to earn enough money to make that mortgage payment (and your student loan, and all the other costs of supporting your family), or else you lose your house.
I won't even talk about credit card debt.
This all works fine for most people, but it fails badly for some--for people who can't find work or lose their job or become disabled. It fails less badly for others--people whose degree prepared them for work that they enjoy, but that doesn't pay well enough to both support them and get them out of debt, or for people whose work pays well enough but that they don't enjoy. Overall, I'd say it fails to some extent for lots of people.
There are all kinds of ways to support yourself besides working at a regular job. You can be self-employed, you can do freelance work, you can be a writer or an artist, you can grow your own food and make the things you need. Most of those ways won't support you at a middle-class standard of living, but they're an option. Except that they aren't an option to most people, because most people are in debt. And most people in debt can't cover their cash expenses any other way than by working at a regular job--those other options, although they can provide enough to eke out a meager existence, don't generate enough cash to do that and make the monthly payments.
The way out
In the end, debt and wages work together to trap the overwhelming majority of people.
It's hardly an airtight trap. You can buy your way out if you earn good money: Keep your expenses low, pay off those debts, get enough savings that you don't need to borrow again, start making some investments.... That path to financial independence is well known to anyone who reads financial blogs.
But it's a path that most high school students don't learn about. Most people only begin to understand when it's too late--after some young kid (i.e. them at age 17), guided by well-meaning but under-thoughtful parents, guidance counselors, and college admission advisors, have set them on the path to being locked into employment by wages and debt. Once you're there, it's a long hard slog to switch back to the path to financial independence.
One thing I'm sad about is that so many people who have managed to find the path to freedom have so little sympathy for the people who went badly astray. Granted, those who have just begun to find their way will be in the midst of difficult striving, but it somehow seems to me that should give people more empathy with those who, following the default advice, headed down the path of debt. In fact, though, it seems to give them less.
There's nothing wrong with debt and there's nothing wrong with wages. But I think the system we have now is pernicious. It makes sure that everyone starts out with a load of debt to trap them into working for wages at exactly the moment that they might otherwise be exploring other possibilities, and keeps them there until family obligations and a promising career make it hard to escape.
It's not impossible to escape. Wise Bread is full of advice, both tactical and strategic, for finding the path out of the debt and wage trap. Better if you never get trapped in the first place, but who among us has such luck? Who among us was smart enough or lucky enough or well-advised enough as teenagers to find the path to financial independence early? Too few.