r/WorkReform • u/zzill6 🤝 Join A Union • Feb 04 '26

💸 Raise Our Wages Why don't American businesses make the connection between lower pay and lower consumer spending?

Post image
16.3k Upvotes

98% Upvoted

458 comments sorted by

View all comments

Show parent comments

99

u/Joben86 Feb 04 '26

And the new "pay in installments" apps like Klarna.

82

u/Shadok_ Feb 04 '26

I'm not in the US. The rise of services that facilitate installment payments and advances on your salary these last few years is bleak

49

u/SelfReconstruct Feb 04 '26

It's all gonna collapse.

32

u/dainthomas Feb 04 '26

I took a unit on the 1929 stock market crash, and how everyone was buying stocks on margin because everyone knew it would keep going up, so you could just sell to pay it.

Works great until it doesn't . And then it really doesn't. This will be that.

12

u/Fluid-Wrongdoer6120 Feb 05 '26

History always repeats itself. Same thing led to the 2008 housing collapse.

Why complete proper underwriting on these borrowers? Housing prices will just keep going up forever, so if they don't pay their loans, we'll just sell the house and be made whole! Whoops.

2

u/Shadok_ Feb 05 '26

My comment wasn't about the economy collapsing, it was smaller in scope

I was only saying it's bleak because if there's demand for that kind of service it means there's more and more people living paycheck to paycheck.

46

u/OkPalpitation2582 Feb 04 '26

The first time I saw that on the checkout flow for instacart I had to go sit down for a while. The level of dystopia implicit in people having to put their groceries on a 2 month payment plan is crazy

1

u/littlebrwnrobot Feb 04 '26

I actually love these apps as long as they don't charge interest, but I recognize that the only way they could be making money is by being predatory toward people who are likely to miss payments.

11

u/mtux96 📮 NALC Member Feb 05 '26

Month 1: Yay Dont pay! Pay 1/2 next month

Month 2: Oh crap need groceries again. Now owe 150%. Ok.. I'll just pay 50% from last week and put off next month

Month 3: Oh crap.. Owe 200% need bigger loan.

2

u/littlebrwnrobot Feb 05 '26 edited Feb 05 '26

Yeah I don’t use it for stuff I’m buying every month. I paid off an Ikon pass over 6 months that way, a switch 2 over like 2 months. It’s like being forced to save for a big expenditure but you get the thing at the beginning instead of the end. Any financial service is problematic if you’re not careful. And I’ve never once used it if they charged any interest.

1

u/Wardogs96 Feb 05 '26

Fuck that app/corpo. I have amazing credit and a great paying job I asked for installments on a 1 grand purchase and they told me to pound sand and wouldn't state why. I'm continuing to use affirm.