8th October 2026
Debt is usually presented as a personal problem.
You borrowed the money, so you have to pay it back but if the mortgage is too large, the credit card is running up a balance or the car finance is eating into the monthly budget, the obvious answer seems to be to borrow less.
But a new book raises a much bigger and rather uncomfortable question.
Could our growing dependence on debt actually be changing the way workers behave?
That is the argument explored by economist Giorgos Gouzoulis in Debt and the Future of Workers: Financialization as Exploitation in the 21st Century, published in 2026.
The book argues that debt is not simply something that happens to households because wages are too low or living costs are too high. Debt can also make workers more dependent on keeping their jobs and therefore less willing to risk challenging employers over pay and conditions.
It is an interesting idea because it turns the usual argument about debt on its head.
What happens when the pay packet is already spoken for?
Imagine someone with a mortgage, car finance, credit-card payments, household bills and perhaps other loans.
Their monthly income may look reasonable on paper.
But much of it has already been committed before they buy a loaf of bread or fill the car.
Now imagine that person is unhappy at work.
They believe they are underpaid. They might think their employer is treating them unfairly. They might even agree with colleagues that wages should be higher.
But taking industrial action, changing jobs or risking dismissal becomes considerably more difficult when missing a month's wages could mean missing the mortgage payment.
This is the heart of Gouzoulis's argument.
Debt creates an additional reason to remain employed and therefore, potentially, an additional reason not to take risks at work.
His research has previously examined the relationship between household indebtedness and industrial action in the UK, United States, Japan, South Korea and Sweden. It found evidence consistent with the argument that indebted workers are more reluctant to take industrial action because of the consequences of losing their income.
That does not mean every worker with a mortgage is frightened to ask for a pay rise.
It does mean that debt can become another force influencing the balance of power between employees and employers.
Borrowing can hide a wages problem
There is another part of the argument which may be even more relevant to ordinary households.
What happens when wages do not rise sufficiently to keep up with the cost of living?
One answer is that people cut their spending.
Another is that they borrow.
For a while, borrowing can make the problem less visible.
A family that cannot quite afford its normal standard of living may put something on a credit card. A car can be financed rather than bought outright. A house can be purchased with a much larger mortgage.
The household still appears to be functioning.
But some of tomorrow's income has already been spent.
This is why Gouzoulis describes the growth of household debt as part of a wider process of financialisation.
The book argues that since the late 1970s, rising household debts such as mortgages and student loans have developed alongside reductions in public spending and the greater use of private finance to provide things that households need.
In simple terms, where income or public provision does not cover the cost, credit can fill the gap.
But credit is not free money.
It eventually has to be repaid, usually with interest.
Britain already has a long history of this
Britain's household debt problem is not new.
Household debt rose sharply between the late 1990s and the financial crisis. Debt reached the equivalent of around 157% of household disposable income in 2008.
It has since fallen substantially. By the second quarter of 2026, household debt was around 116.5% of disposable income.
So this is not a story about Britain being at another 2008-style debt peak.
But the pressure has not disappeared.
Bank of England figures show that individuals added £2.5bn of net consumer credit in August 2026. Credit-card borrowing alone accounted for £1.2bn of that increase.
That matters because consumer credit is often used for things which households cannot comfortably afford from their current income.
The mortgage is different — but it still matters
It would be wrong to put a mortgage and an unpaid credit-card bill into exactly the same category.
For most homeowners, a mortgage is also the means of acquiring an asset.
But a mortgage creates a very large fixed financial commitment.
That commitment can influence behaviour.
A worker who owns a house with a large mortgage may be much less willing to risk unemployment than someone without that commitment.
That is particularly important when interest rates rise.
A mortgage that looked manageable when rates were low can become much more demanding when the fixed-rate deal expires.
And this is not merely theoretical. The latest Bank of England figures show mortgage approvals falling in August, while Reuters reported on 8 October that British lenders had reduced the availability of mortgages and other secured household loans for the first time in three years.
Is debt actually keeping wages down?
This is where the book becomes controversial.
It would be far too simple to say that debt causes low wages.
Wages are influenced by productivity, skills, labour supply, globalisation, technology, taxation, union strength and many other factors.
But Gouzoulis asks us to consider whether we have been overlooking an important piece of the puzzle.
If workers become heavily indebted, they may have less freedom to refuse poor conditions.
If enough workers are in that position, their bargaining power may weaken.
And if workers have less bargaining power, there may be less pressure on employers to increase wages.
That creates a potentially unpleasant circle:
Low wage growth → greater borrowing → higher monthly commitments → greater fear of losing income → weaker bargaining power → less pressure for higher wages.
Debt therefore stops being merely a consequence of economic insecurity.
It can become part of the mechanism that maintains it.
There is an even bigger question
Perhaps the most interesting aspect of the argument is what it says about the economy as a whole.
If people increasingly need mortgages, loans and credit to achieve a reasonable standard of living, then the economy becomes increasingly dependent on households having access to credit.
That can make rising house prices appear helpful because homeowners can borrow against increasingly valuable properties.
It can make consumer spending look stronger because people can spend today and repay tomorrow.
And it can make stagnant wages less immediately visible.
But eventually the bill arrives.
Every pound borrowed today is a claim on future income.
That means the question is not simply "How much debt do we have?"
It is also:
"How much of our future income have we already promised to somebody else?"
Debt changes the meaning of a pay rise
Suppose two workers each receive an extra £100 a month.
One has very little debt.
The other has a large mortgage, car finance and credit-card balance.
The £100 means something very different to each of them.
For the heavily indebted worker, the pay rise may simply make it possible to keep up with existing commitments.
That raises another uncomfortable question.
Are some workers actually working harder simply to stand still?
The LSE review of Gouzoulis's book highlights precisely this wider relationship between household financialisation, debt and workers' bargaining power.
The argument is not that borrowing is always bad.
Credit can be enormously useful. A mortgage allows people to buy a home that they could never purchase outright. Student loans can provide access to education. Short-term borrowing can help a household through an unexpected expense.
The danger comes when borrowing becomes the way people routinely compensate for income that is insufficient to meet the cost of living.
So are we borrowing our way into accepting lower wages?
That may be too strong a conclusion.
But it is certainly a question worth asking.
We normally think of wages and debt as two separate subjects.
Your employer pays your wages.
Your bank deals with your mortgage.
Your credit-card company deals with your balance.
But for the household, they all meet in the same place: the monthly bank account.
And that is where the book's argument becomes particularly powerful.
A worker does not experience the economy as a series of separate academic theories.
They experience it as money coming in and money going out.
If too much of tomorrow's income has already been committed to paying for yesterday's spending, the freedom to make choices today becomes smaller.
Perhaps the real debt trap is not simply owing money.
It is reaching the point where you can no longer afford to say no.
The LSE Review of Books article about the book can be read here:
[url=//blogs.lse.ac.uk/lsereviewofbooks/2026/09/28/book-review-debt-and-the-future-of-workers-financialisation-as-exploitation-giorgos-gouzoulis/]Debt and the Future of Workers – LSE Review of Books[/url]