Well bless their poor little hearts

February 21, 2023 11:16 AM

Why does the South have such ugly credit scores? You may already know that airlines are really credit-card rewards companies with a side gig of flying planes. Economists S. Agarwal, A. Presbitero, A. Silva and C. Wix used credit card rewards programs to look more closely at the monetary redistribution that results from credit card rewards use: they showed that poorer users pay for those programs, while wealthier users benefit. Agarwal et al. also noted a geographical distribution of credit that roughly follows the Mason-Dixon line. Andrew Van Dam of the WaPo's Department of Data then took a deeper dive into credit, debt, and health.

Was it race? The data argued it was not:

But when we ran the numbers, the Blackest parts of the South had roughly the same credit scores as the least-Black areas. And their scores were far lower than places with similar Black populations outside the South. So while race may play a role, it’s probably not the defining factor.

Was it rural poverty?

Even some of the South’s biggest, most dynamic cities — think Atlanta or Dallas — have the same below-average credit scores as their more rural Southern neighbors. Within every income bracket, the typical Southerner has a lower credit score than someone who lives in the Northeast, Midwest or West.

I bet you already knew ...

“The reason why credit scores are so low in the South has gotta be connected to medical debt, because that’s the most common type of unpaid bill that people have,” Braga said. And the South, he said, easily has the highest levels of medical debt in the country.

But why is medical debt so concentrated in the South? After all, some Northern states also have higher rates of poorer health, but still good credit.

A clue to the broader answer comes from a recent analysis in the Journal of the American Medical Association, which found that medical debt “became more concentrated in lower-income communities in states that did not expand Medicaid” after key provisions of the Affordable Care Act took effect in 2014.

Southerners were more likely to be behind on medical debt even before the ACA, but the reluctance among the region’s mostly Republican governors to participate in the Medicaid expansion has increased the gaps between the South and the rest of the country.

In states that immediately expanded Medicaid, medical debt was slashed nearly in half between 2013 and 2020. In states that didn’t expand Medicaid, medical debt fell just 10 percent, the JAMA team found. And in low-income communities in those states, debt levels actually rose.

Also worth noting: both medical debt and credit card scores are relatively recent phenomena.

posted by Dashy (23 comments total)

Or perhaps region is an input to the credit-score model.
posted by ExpertWitness at 11:43 AM on February 21, 2023 [8 favorites]

Or perhaps region is an input to the credit-score model.

It would be a decent abstract of medical debt.
posted by ChurchHatesTucker at 12:20 PM on February 21, 2023

To zero in on medical debt just seemed odd to me. Without actually studying it, it makes sense as a component, but the region as a whole carries higher credit-card debt relative to income, and these are the poorest states in the nation. It isn't too much of a stretch to maybe say that there is a correlation between credit scores and areas more heavily affected by income-inequality in general, for all that entails.
posted by ExpertWitness at 12:27 PM on February 21, 2023 [4 favorites]

….and state governments that do their damnest to screw over poor and non-white folks.
posted by zenzenobia at 12:46 PM on February 21, 2023 [9 favorites]

I was going to write a very short version of this same post for a friend's blog but without all the quotes. I live in Texas and I could have told you it was Medicaid/Medicare just from knowing how our lousy politics work. They throw poor kids off Medicaid on a regular basis (I think it's either every 6 months or a year here that you have to reapply for every kid, which is nontrivial work) to keep costs down. It's not a surprise that pushing kids off Medicaid increases medical debt on top of everything else.
posted by gentlyepigrams at 12:56 PM on February 21, 2023 [16 favorites]

Automatic re-enrollment in Medicaid was a pandemic provision that is set to end on March 31, 2023. Argh, for so many people.

Total Medicaid/CHIP enrollment grew to 90.9 million in September 2022 , an increase of 19.8 million or more than 27.9% from enrollment in February 2020

KFF estimates that between 5.3 million and 14.2 million people will lose Medicaid coverage during the 12-month unwinding period

because we all wanted 2019 back so very badly
posted by Dashy at 1:30 PM on February 21, 2023 [7 favorites]

If this is true:
Within every income bracket, the typical Southerner has a lower credit score than someone who lives in the Northeast, Midwest or West.

Then I'm not sure I agree. Best as I can tell about medical debt, and someone please correct if this is newer data (I can't see the WP article):

" A recent Census Bureau analysis on medical debt at the household level found 17% of households owed medical debt in 2019. " , with a median of $500.

"Approximately 16 million people (6% of adults) in the U.S. owe over $1,000 in medical debt and 3 million people (1% of adults) owe medical debt of more than $10,000. "

So there is no way medical debt is high enough, or common enough, to lower credit scores across all income profiles across the south.

Also, the stat from the other paper "Are Income and Credit Scores Highly Correlated?" is kind of bad too, and I guess hinges on what you consider 'highly correlated'. But their own charts shown that the highest credit score low income working people can reasonably achieve is about 870 out of 1000, while median incomes can achieve 950, and high income can achieve perfect 1000, and far more upper income have a score above 800 than any other income group, which they sort of mask due to their terrible charts. So fine, yes there are 2.5% of lower income unicorns who have a perfect score, but that probably has to do with variable income from year over year or income variability or inheritance ie: other sources of income beyond earned income. So you may not be able to perfectly estimate income based on score, but you can certainly estimate score based on income.
posted by The_Vegetables at 1:31 PM on February 21, 2023 [3 favorites]

Gift link
posted by zenzenobia at 1:36 PM on February 21, 2023 [3 favorites]

But why is medical debt so concentrated in the South?

Dunno but Business Insider identified 13 regions of the US, one of which is the Stroke Belt. Guess where it is.
posted by Rash at 1:44 PM on February 21, 2023 [3 favorites]

The pandemic is not over.

Doing things like stopping automatic Medicaid enrollment ensure that the pandemic will never be over.

"Cutting costs" in cases like this always means pushing those costs onto citizens. In the case of Medicaid it's pushing costs onto the citizens least able to bear them.

I had hoped, during lockdown, that the pandemic would lead to a resurgence of public awareness and community spirit, that mutual aid could receive public support and supplant means-tested abuse, but it looks like I and the other uprooted beat-down poorfolk will just have to keep Biden our time.
posted by Rev. Irreverent Revenant at 2:48 PM on February 21, 2023 [20 favorites]

From the map, it looks like Medicaid expansion isn't the full story, since Kentucky, West Virginia, Oklahoma, Arkansas, and Louisiana (which all expanded Medicaid at some point, some of them immediately after the ACA allowed it) don't look that different from the rest of the South. But I'm willing to bet there are other policies that make people more likely to get into medical debt in the region.

I'd also be curious to see how the benefits of boosting your credit score vary from place to place, though this would probably vary by other demographic factors as well. Some benefits of high scores like access to, well, credit, including those credit card rewards and signup bonuses, are probably basically the same across the country. But I would bet that the range of credit score that makes it hard to get jobs, housing, etc.—and which employers and landlords look at credit at all—varies from place to place.
posted by smelendez at 2:58 PM on February 21, 2023

" A recent Census Bureau analysis on medical debt at the household level found 17% of households owed medical debt in 2019. " , with a median of $500.

To add to this, 31% of US households have a car payment, and the median used car payment is $500 a month, which dwarfs medical debt. And a quick googling shows that car payments are pretty high in the south too, though the data is not really in a format to say they are marginally higher than other regions. But they aren't dramatically lower, given the the generally lower incomes/ lower cost of living /sorry public transit / various economic signaling of car ownership.


I'd go so far as to surmise that (given the article above about credit cards) that poor people in the south are literally subsidizing wealthier people everywhere, at least in terms of finance interest rates.

Someone else would need to explain why, though again, lower incomes, violent weather, and higher percents of minorities (especially blacks) could be reasons.
posted by The_Vegetables at 3:04 PM on February 21, 2023 [7 favorites]

Dashy, I think this is a good post, but the title’s kinda mean. “Bless [ ] heart” can mean a lot of things, but often it conveys genial contempt or lightweight scorn, and here it reads to me like a bit of “ha ha Southern poors.” You may have meant nothing like that, but I mention it because no one has, and anti-South stuff often passes unmentioned here.
posted by cupcakeninja at 3:58 PM on February 21, 2023 [24 favorites]

Is it known what health risks other than stroke are highest risk here? How does this info correlate with these regions' occupations, including miners and oil workers and other high labor physical jobs? Also, subtle factors like long-term impact of hurricane/hurricane rebuild efforts might play in at some point; that's a lot of manual labor, mental stress, and mold/health exposures.
posted by beaning at 4:52 PM on February 21, 2023 [2 favorites]

And agreeing with those commenting that medical debt ties into credit card debt and poor credit scores because these communities lack the necessary insurance coverage and so are using credit cards to provide for themselves and other family members.
posted by beaning at 4:54 PM on February 21, 2023 [1 favorite]

I wrote the title to reflect the inhumane scorn that southern Republican politicians seem to have for their constituents.

That's where this all goes back to in my opinion. They hate liberals and Obama so deeply that expanding Medicare is poisonous anathema, and the less fortunate just pay and pay and pay, in intertwined ways.

I deeply apologize if it is taken any other way.
posted by Dashy at 5:06 PM on February 21, 2023 [28 favorites]

Duly noted! Thank you for explaining; that makes sense. I've been living in the South for ~15 years now, and have definitely seen that dynamic at play with neighbors, people at the grocery store, etc.
posted by cupcakeninja at 5:26 PM on February 21, 2023 [6 favorites]

Being poor is damned expensive!
posted by nofundy at 4:27 AM on February 22, 2023 [4 favorites]

Is it known what health risks other than stroke are highest risk here?

I live in Nashville. From observation, I would suggest smoking is a factor, and the lack of walkable areas. People are more sedentary here, I think, in part because of the necessity to use a car to get places and in part because it's just uncomfortably hot for several months of the year.

I also know we have a higher rate of various cancers (I work for oncologists) - a lot of doctors refer to the "Cancer Belt." People use snuff and chewing tobacco, HPV rates are higher (HPV is related to a lot of cancers), and access to healthcare is lower. I don't know that this is the case but I also suspect we get exposed to more chemicals because of our regulation-averse state governments.
posted by joannemerriam at 8:28 AM on February 22, 2023 [7 favorites]

I wonder about the need for cars, too.

If you're poor in NYC or Philadelphia then you can probably get by without a car. If you're poor in Raleigh or Charlotte or Atlanta, you probably need a car to have even minimal access to jobs and errands. And if you're poor, there's a decent chance you're financing a car that you bought at one of the scummiest "no credit, bad credit, no problem" dealerships.

Being poor is expensive (and credit-damaging) on a large number of axes, but surely one of the big ones is "you can't get to work or buy groceries unless you buy this thing that costs several thousand dollars, and maybe you can get away with buying a cheap one or maybe you'll spend another several thousand dollars on repairs."
posted by Jeanne at 9:03 AM on February 22, 2023 [6 favorites]

The South is the primary locus of the negative health effects of environmental racism the U.S. — via capitulation to the greed of mostly Northern-based banks & corporations — has allowed to fester since industrialization. Somehow the Northeast has come to believe the wealth it has accumulated somehow happened without the oppression generally present when a population is divided into haves and have-nots, bless their rich little hearts.
posted by Press Butt.on to Check at 9:25 AM on February 22, 2023 [5 favorites]

The Southeastern US has the highest maternal and infant mortality rates.

Also the kidney stone belt
posted by hydropsyche at 4:47 PM on February 22, 2023

There is a rooted mindset about escaping debt that is prevalent in the South.

A few weeks ago, a youth pastor from my Oklahoma days told me a story about a discussion he led with a group of teenagers. He asked his students: “If it was conclusive that cellphones were killing honeybees, would you stop using them?” Most said no. “I think the scientists will figure it out,” said one student, “but really, who cares if there are honeybees? This world is coming to an end anyway. We’ll all be raptured.”
posted by Brian B. at 11:20 AM on February 23, 2023 [1 favorite]