(en) It is expensive to be poor

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Sun, 21 Sep 1997 23:12:12 +0000


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It's Expensive to be Poor

by FAITH R. RHYNE and SHARON J. PEARSON ..

Although there are success stories in which an individual is able to rise out of poverty, often these stories simply serve to distract readers or hearers from the fact that there are millions of people who are finding it virtually impossible to break the cycle of poverty, What follows are examples of how a lot of their money goes to paying costs directly related to poverty itself.

The activity of business cashing in on poverty--currently not well documented-- may be a big one. Whether by accident or whether by design, it appears that corporations and small businesses profit in varying ways.

Profiting from Poverty

Imagine this scenario: A person finally gets a small income but when they go to spend it or protect it they they find out it's "going to cost them." Banking for example. The banking industry seems to have transformed itself from an accessible way in which people can protect their assets and draw interest on their funds, into what more closely resembles a middle-class or upper-class privilege.

For example: Somebody lands a job at McDonald's. "Aha!" this person says, "I've got to put this money in the bank--I'm going to need to cash my paycheck!" Then they find out they'll only get a checking account if "ChexSystems" approves. ChexSystems is an agency to whom all banks report what they consider to be their customers "abusive activity." This abuse can range from bounced checks to fraud. However, it is unclear whether or not a person's financial history comes into play.

Assuming, however, ChexSystems gives the okay for our McDonald's employee to have a checking account, many banks require a minimum deposit of $200. One week's net pay at minimum wage is approximately $l54, so most likely a McDonald's employee wouldn't be able to make the minimum deposit.

However, maybe next week or next month? But now, banking gets really scary. Overdraft fees--a constant threat to low-income people with small bank balances--can run a depositor $l8.50 for one bounced check. Given the circumstances, an individual can conceivably go into debt on overdraft fees alone.

Well, what can a person do if he or she can't cash a check at a bank? Check cashing businesses will do it. For a hefty fee, that is. These businesses can charge as high as 10% of the amount of the check.

Without a checking account, however, how will our employee pay his or her bills? He or she can't buy a money order for food, but they can buy one to pay rent. The combined check cashing fees and money order fees, however, add up to more than the cost of a normal checking account, which is approximately $8 a month.

So, as most muggers know, many poor people carry around a bunch of cash. And muggings or robberies, for that matter, are on the rise across the nation. It is a sad fact, but nonetheless a true one: When people are desperate, the have-nots will steal from--not only the haves--but from each other.

When poverty strikes, many people--if not most people--have in their possession the total sum of material goods they have acquired during their lifetime. A painful and pressing question, therefore, needs an answer: "Where am I going to put all my stuff?!"

Why, a self-storage company, naturally. The average cost of the smallest rental storage space available in Portland--sixteen square feet--is $l9.95 per month. To rent one of these spaces is a momentous decision for a poor person. Especially when a new regulation takes effect in the not too distant future: Miss one payment and six days, kiss your worldly belongings goodbye.

As if all this isn't enough, when you're poor transporting yourself and your stuff requires strategic planning--especially if you're not mobile. The elderly, the disabled, and mothers with children, are the most hard-pressed. Chasing sales to stock up on lower priced groceries is pretty much out of the question without a car--so then there's the challenge of carrying home what you've bought.

If a poor person can scrape up enough bucks for a car, it's going to be an old "Bessie." And because it's old, it's going to cost more to run than a new car: It eats more gas, it's going to break down more often and--the driver is more likely to get more tickets for moving violations.

More trips to big grocery stores to save money, mean more bus fares and a lot of time spent fetching food. As a result, many poor people frequent neighborhood mom and pop stores where, for the "convenience," they often pay nearly twice as much for food.

Poverty is a condition whose roots run much deeper than can be seen at first glance. When an individual first experiences it, there is no way they can anticipate all the hidden costs. For example, low-cost housing.

The cheapest housing available for the "working poor"--people working for minimum wage--is usually a room without a kitchen or bath. This typical room rents for approximately $2l5 a month, but it means sharing a kitchen and bathroom. And, it means frequently replacing stolen food and toilet articles. The rooms are also without telephone service.

A telephone--often a necessity--is a big expense. June 20, The Oregonian reported that the utilities commission announced that U.S. West has been charging consumers too much for their phone service. However, to the poor--who can't afford telephone service deposits--coin phones are even more spendy: four local phone calls a day for 30 days equals $30 a month! (Long distance calls would be even worse.)

The costs of poverty are costs that prevent people from getting ahead or achieving what sociologists call "upward social mobility." Minimum Wage equals $5.50 per hour, or a monthly gross of $880. Less taxes, a minimum wage worker has about $6l6 to cover one person's basic means of survival.

Subtract $2l5 for rent, $46 for a bus pass, $60 for check cashing, $30 for telephone calls, $2.50 for three money orders, and maybe $l0 for clothing and toilet articles, and $l9.95 for storage; this leaves a minimum wage earner $62.25 to last the entire month for food and any other costs and losses not listed here.

Now Imagine a single mother with one child working at minimum wage and the scenario becomes even more desperate. Day Care costs can run as high as $360 a month for a pre-school age child and $210 for day care before and after school.

Privatization: "Profits in the Misery Business"

May 23, l997 The Toronto Star printed a story called "Profits in the misery business" by Kathleen Kenna--Toronto Star Washington Bureau. After reading a Help Wanted ad, Kenna reported that, according to privatization opponents, corporations are "itching to run the Texas welfare system, but they're just in it for a quick buck."

The ad read: "AUSTIN, TEXAS - HELP WANTED: Private workers needed to revamp state welfare system. Contract worth $2.8 billion over five years. Must be willing to computerize current files; interview new applicants; and take political heat for replacing l3,000 public service workers."

Citing "fragmented service," Texas spokesperson for the state's human services department, Charles Stuart, was quoted as having said, "We've needed to do this for a very long time."

Kenna writes that, since President Clinton gave up "six decades of federal power over welfare" to the states last August, Texas had been "itching" to post that Help Wanted ad. And, according to the writer, some pretty large corporations are wanting to apply: IBM, Unisys, Lockheed Martin and a Chicago accounting firm, Anderson Consulting.

Texas hopes privatization will lead to integrating 20 social service programs, including Medicaid, food stamps and welfare. However, privatization is opposed by an "alliance of 22 of the state's largest churches, social welfare agencies, civil rights groups and organizations for immigrants, refugees and the disabled.

Alliance movers and shakers have asked President Clinton, "How a for-profit firm that lobbies and makes campaign contributions to politicians can be held accountable to the public for meeting the needs of the poor and disadvantaged."

Recently, Lynn McCray, organizing coordinator of the Texas State Employees Union, said, "When Texans apply for welfare or other state aid, they're in a time of crisis--when they're most miserable. It's not right to make a profit off people's misery."

It's doubtful, however, if business will ever admit to making a profit on the misery of the poor. Instead, they will probably simply cite "rising costs of helping the poor" as their explanation for top-heavy expenditures.

No welfare--no jobs

To many poor people the days of the "Bootstrap Approach"--written about by the likes of Horatio Algier--is gone. More affluent Americans, however, still believe the poor in the U.S. can pull themselves up by their bootstraps and don't seem to recognize the effect this false expectation is having on the poor.

Take Welfare Reform, for example. This is the naive idea that if you take away welfare from the so-called able-bodied poor, they'll go to work. A recent story in The Oregonian , "Top firms unwilling to hire those on welfare" (5-26-97) appears to be debunking that popular notion though, and doing so despite equally naive notions that America is experiencing an "economic boom."

The costs of poverty are immense and are not simply of a financial nature. The effects of social ostracization and criticism can be just as disempowering as financial hardship. The poor are more likely to experience chronic depression than the economically well off--and--they are more likely to become victims of violent crime.

The "Other" Cost

Human beings--no matter their economic class--always pay a human cost by simply staying alive. Often life hurts, and there is no-thing to make up for it. Familiy systems, however, appear to come the closest.

Failure to experience acceptance and comfort from a family group seems to be a loss that crosses all economic barriers. But, for the poor, it is perhaps felt more keenly and needed more desperately.

Despite volumes of research on homelessness and poverty in the U.S. and despite novels and movies that romanticize the pain, non-poor people seem to persist in asking why other people are homeless, why they can't get out of their poverty and where is the support of their families.

People in Portland who have fallen on hard times, hard enough to become homeless, tell the same story of family and friendship, they say, "When you don't have anything going for you, everyone treats you differently than when things were going great."

In the animal kingdom it's not an unusual occurance for a family or pack to kill a member who is "inferior" in some way. The runt, for example, usually has the hardest struggle to survive. Most people living on the streets say, "It's no different for homeless square pegs."

Rejection and ostracization of an individual or a group based upon economics--or any other condition that doesn't fit a certain mold or ideal--is classism, pure but not simple. Not simple, because entire industries--prison systems, non-profits and certain businesses--depend upon the poor staying poor in order to reap their profits.

It is expensive to be poor. The poor are exploited in the marketplace, libeled and slandered in the press, pimped for drugs and sex, denied civil liberties and unfairly incarcerated. Clearly, the cost is too high. And only time will tell how long they're going to take it.

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