I want to make a distinction between two groups of people:
- Group A has the liquidity and borrowing power.
- Group B has minimal liquidity and borrowing power.
The term "credit rating" implies it's in the traditional financial network, whereas I'm referring to loans among friends, and the ability for that peer group to fulfill an obligation.
The most relevant term I can come up with is that each social network has a different "Economic Plasticity".
The basis for this question is a recent NPR broadcast where a researcher was looking at the public records of collection agencies, and in particular the addresses to which those collection notices were sent. He noticed that collection notices were sent largely to neighborhoods with a minority population. Knowing that collections are traded like sub-prime mortgages, and that there is likely no inherent racism in this, he was nevertheless able to find a common thread:
Non-minority/white populations who were more connected to friends and family were more able to help with surprise expenses such as car issues, funeral expenses, and accidents. On the other hand, minority populations would struggle to withstand those momentary hardships even if they exhausted the resources of their peer network;
The cumulative economic penalties (late fees, interest rates, etc) create a system where the oppressed stay oppressed, and the financially endowed stay endowed.
Not mentioned in this broadcast were the wealthy risk takers, who collectively make bad decisions that could see them end up in a similar situation where they are unable to borrow from friends.
I intend to create a chart, that shows this "economic plasticity" among groups of people. Any better term is appreciated
In a world where financial inequality is the leading topic of these times, I think this term would be useful in gaining perspective, and perhaps, compassion for those who suffer from this plight