Could You Afford to be Poor?

There are people, concentrated in the Hamptons and Beverly Hills, who still confuse poverty with the simple life. No cable TV, no altercations with the maid, no summer home maintenance issues – just the basics, like family, sunsets, and walks in the park. What they don’t know is that it’s expensive to be poor. In fact, you, the reader of middling income, could probably not afford it.

A new study from the Brookings Institute documents the “ghetto tax,” or higher cost of living in low-income urban neighborhoods. It comes at you from every direction, from food prices to auto insurance. A few examples from this study, by Matt Fellowes, that covered 12 American cities:

• Poor people are less likely to have bank accounts, which can be expensive for those with low balances, and so they tend to cash their pay checks at check-cashing businesses, which in the cities surveyed, charged $5 to $50 for a $500 check.
• Nationwide, low-income car buyers, defined as people earning less than $30,000 a year, pay two percentage points more for a car loan than more affluent buyers.
• Low-income drivers pay more for car insurance. In New York, Baltimore and Hartford, they pay an average $400 more a year to insure the exact same car and driver risk than wealthier drivers.
• Poorer people pay an average of one percentage point more in mortgage interest.
• They are more likely to buy their furniture and appliances through pricey rent-to-own businesses. In Wisconsin, the study reports, a $200 rent-to-own TV set can cost $700 with the interest included.
• They are less likely to have access to large supermarkets and hence to rely on the far more expensive, and lower quality offerings, of small grocery and convenience stores.

I didn’t live in any ghettoes when I worked on Nickle and Dimed—a trailer park, yes, but no ghetto-- and on my average wage of $7 an hour, or about $14,400 a year, I wasn’t in the market for furniture, a house or a car. But the high cost of poverty was brought home to me within a few days of my entry into the low-wage life, when, slipping into social-worker mode, I chastised a co-worker for living in a motel room when it would be so much cheaper to rent an apartment. Her response: Where would she get the first month’s rent and security deposit it takes to pin down an apartment? The lack of that amount of capital – probably well over $1000 – condemned her to paying $40 a night at the Day’s Inn.

Then there was the problem of sustenance. I had gone into the project imagining myself preparing vast quantities of cheap, nutritious, soups and stews, which I would freeze and heat for dinner each day. But surprise: I didn’t have the proverbial pot to pee in, not to mention spices or Tupperware. A scouting trip to K-Mart established that it would take about a $40 capital investment to get my kitchenette up to speed for the low-wage way of life.

The food situation got only more challenging when I, too, found myself living in a motel. Lacking a fridge and microwave, all my food had to come from the nearest convenience store (hardboiled eggs and banana for breakfast) or, for the big meal of the day, Wendy’s or KFC. I have no nutritional complaints; after all, there is a veggie, or flecks of one, in Wendy’s broccoli and cheese baked potato. The problem was financial. A double cheese burger and fries is lot more expensive than that hypothetical home-made lentil stew.

There are other tolls along the road well-traveled by the working poor. If your credit is lousy, which it is likely to be, you’ll pay a higher deposit for a phone. If you don’t have health insurance, you may end taking that feverish child to an emergency room, and please don’t think of ER’s as socialized medicine for the poor. The average cost of a visit is over $1000, which is over ten times more than what a clinic pediatrician would charge. Or you neglect that hypertension, diabetes or mystery lump until you end up with a $100,000 problem on your hands.

So let’s have a little less talk about how the poor should learn to manage their money, and a little more attention to all the ways that money is being systematically siphoned off. Yes, certain kinds of advice would be helpful: skip the pay-day loans and rent-to-pay furniture, for example. But we need laws in more states to stop predatory practices like $50 charges for check-cashing. Also, think what some micro-credit could do to move families from motels and shelters to apartments. And did I mention a living wage?

If you’re rich, you might want to stay that way. It’s a whole lot cheaper than being poor.

Comments

[Autumn953]

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[Robert Hillman]

Robert Hillman
R R # 2 Monkton Ontario
Canada
N0K1P0

singledad of four children
for 12 years
no family
and no one cares
you want to help

anything will be appreciated
we have no van cause it needs fixed
we have no insurance because we have no job

we have no job because we have no van

we have no van cause we didnt have enough money to fix it
when it broke

and the truth is NO ONE CARES
i am a dead beat dad?

I raised them alone
since they were
7 4 2 and three days old
with NO SUPPORT

and where is the public outrage over a man raising four children alone without help?????????

[Carol]

I am one of those poor people. i live without a lot of things. because i cant afford the high rates we have to pay. medical is a big issue. I have none. Can't afford any. My teeth and body are suffering because of it. Thanks for a great post.

[ateo]

Work the system to your advantage by any means possible. That is the guiding principle of my life. I got a job making a very comfortable middle class wage by lying through my teeth about past experiences and skills I did not have.

You've gotta survive by any means possible. Recognize that the rich lie, steal, kill, and do whatever they can to bring about a situation to their advantage. That is why they are rich, they do whatever it takes to get there and stay there.

My advice is lie about your credentials, buy fake degrees online betting your employer won't check out the school, and apply for jobs you aren't qualified for but believe you can fake it well enough to keep the job for at least a couple of months. Low paying jobs are for high school kids and immigrants. Any American should be able to land a job making at least 15 dollars an hour if they are willing to lie to get it.

The choice between lies and dying in the streets/homelessness is a simple one for me. Remember that modern morality is a creation of the elite to protect the elite. Don't be constrained by their rules and you may one day come to the point where you can look one of them directly in the eye and see them for the greedy, ignorant cowards they really are.

If that doesn't work then take low paying jobs periodically and steal cash from the registers (but not in a way that can be proven).

Finally, if none of these things work make sure one of the last things you buy before you are homeless is a hand gun. Take up crime as your profession. Hey, whatever it takes to survive.

[JW]

The whole "poor people can't use banks" thing is absolute B.S.! Every credit union in my area only requires $5 to open an account. I think a lot of people break basic bank rules (like not bouncing checks), and then get PO-ed when they are assessed fees. To feel better about this, they tell themselves that banks are evil institutions who don't trust the poor/minorities/etc.

I think the main rules of how not to be poor are simply:

1. Remember there is a cost for everything. To drop out of high school, you will have to deal with years of near-slavery and struggle. To avoid college, you must pay with years of menial jobs. Want to have illegitimate kids when you have no job skills or education? Your fee is years of worry and resentment. Want to have high-end electronics and new furniture on a shoestring budget? Be prepared to slowly pay 3-5 times what the low-quality stuff is actually worth by renting it. NEED a 20" flat-panel monitor because "those old big ones make you look poor" when you only have $600 for your whole computer? Be prepared to get a sucky CPU (I can't believe how many poor people love LCD monitors at the expense of the rest of their computer).

2. Don't piss people off. Don't get into fights and get hauled off to jail so you lose your job and can't help pay the rent. Don't lie to and cheat your friends so that they are unable or unwilling to help you later. Without a support network, you are at the mercy of a society that is well aware and afraid of your ilk. Apartments need deposits and cash in advance because they know that many low income people make poor decisions like inviting drug addict boyfriends over to punch holes in the walls. The sad part is that these trashy people hurt the folks who become poor by accident.

3. Prioritize -- I can't believe how many poor people I see who have lots of tattoos. WHY? Their body art makes them look trash, and may preclude them from getting good jobs. Tats costs money that should be spent elsewhere, like on a few community college courses. If you are on the street because your house burned down and premium channels were more important than insurance, then you got what you deserved.

The sad reality is that many (not all!) poor people are there because they made a string of bad decisions. To all those who are truly innocent and ended up poor accidentally (I have a few friends like this, whom I help when they need it), I wish you all the luck in the world as you strive for a better life!

Now for the stuff society needs to change...

1. The government needs to realize just how expensive it actually is to live in most parts of this country. Just because some mobile home park in the middle-of-nowhere rents for $200 a month doesn't mean that every low income person can live there. Most poor folks have a REALLY hard time just paying rent! With no public transportation, poor people need private vehicles and the ability to handle the expenses that go with them. The poverty line is set way too low.

2. Children need to be taught about the dangers of being poor, and the ways to get there. In lower income areas, they may go home to witness their parents' bad decisions and begin to glorify or justify them. They go hunting with the larger-than-necessesary assortment of guns that replaced their college savings. They need to know that while Uncle Ted's 15 dirt bikes are cool, he will be paying for them for many, many more years than he should (I saw a 15-year payment plan on a motorcycle the other day!). I know that teaching children that their parents are bad is something the Nazis did, but they weren't wrong about everything. These bastards made fun of me in elementary and middle school for having a 19" TV. What did I get in return? My single-parent paid off our nice house in only 20 years, and even paid off my dad's equity from the divorce settlement. My TV was small, but nobody in a Rent-a-Center truck would ever come to take it away!

--Just my two cents and flame invitation...

[Miracle]

The evil word is GREED. Politicians, Corporations at the expense of the poor/middle class. How much money does one really need to live comfortably? You drive down the street and see the homeless and hungry; Your at the grocery watching a single mother put something back because she doesn't haven't enough money; You watch as people do without medical treatment or medications...When you think of a $25,000,000.00 (Twenty Five Million) space trip do you wonder how that money could have helped many in our country. If you figure housing prices in my area for a decent home at $80,000.00. That space trip would have housed 313 people. Or what about the $75,000.00 paid for William Shatners kidney stone?
Let me share with everyone that today I spoke with over 12 organizations/agencies in an attempt to find help for my parents. Their home is infested with black mold. There is NOT one agency or government source that helps with this type of situation. So as my parents sit and breathe in this toxic cancerous air, the big businesses continue to become richer and richer at our expense.
Miracle

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[Anon]

Thrift-shopping working food stamp mom:

You claim to be poor yet you have a computer with an internet connection and the leisure time to troll the internets. I call bs.

[Mamid]

We got cut off of welfare this month (and next cheque) because hubby made too much money in May and June. Doesn't matter that he was working mandatory overtime or that he got three cheques in June (bi-weekly cheques total 26, not 24 in a year). If it wasn't for my disability status, we would be up shit creek and have to reapply for the entire kit and caboodle again. He's no longer on Mandatory Overtime and so his income is dropping like a stone. But until Welfare catches up, we're up shit creak for stuff like rent.
And it isn't a matter of budgetting either. How many of you live paycheque to paycheque? That's what we do too. But the way I was treating talking to the workers on the phone is that it was as if they expected me to not spend the money as it comes in and instead save it for a month or three before spending it on such things as rent, bills, food. I had an anxiety attack dealing with them yesterday.

With luck, when I put my next stub back in, we'll get back on full benefits. But until then, I don't know where our rent money is coming from. My budget is down to the penny. I even save all my pennies including the ones that I find when I'm out and about. Just to make sure my kids don't go without.

Shopping at goodwill is a joke. Have you actually looked at the clothing? Salvation Army staples their tags to the clothing. This leaves little holes that make the clothing unwearable for business settings. But if I want to buy anything that would be good for a business setting, I need to fork out the money or all I'm buying is something that needs to be replaced in a few months. Goodwill is really hit or miss.

[philip tadros]

good read:)

[Kim Siever]

"Poor people are less likely to have bank accounts, which can be expensive for those with low balances"

You're serious? I have a bank account with no monthly fees. Of course, I pay 50¢ per transaction. But that's fine with me. Given their cheapest package is $3.50, I get to use 7 transactions per month before it would be worth it to get a package. Which is fine because I rarely even have 1 transaction per month.

"Nationwide, low-income car buyers, defined as people earning less than $30,000 a year, pay two percentage points more for a car loan than more affluent buyers."

Then don't buy a car you can't afford. My first car was given to me, I paid $200 for the 2nd and $500 for the 3rd (which we borrowed from my parents and paid back in installments). It's only after 16 years as an adult that I am finally able to afford vehicle payments.

"They are more likely to buy their furniture and appliances through pricey rent-to-own businesses."

Huh. I'm not poor, but I haven't had to pay for a single item of furniture. Granted they're all used, relatively old, and don't match.

"Saving for retirement--wealthy are allowed to write off from their taxable income contributions to retirement plans. The poor pay these taxes, and have no ability to save for retirement."

Except of course, the poor pay far fewer taxes than the wealthy, thanks to a tax bracket system and a percentage-based income tax.

[Robin Leslie]

Poverty is systemic violence, for poverty, as we now know from economic and sociological studies, is functional to market capitalism, as in modernizing pauperism (and dysfunctional to Western Christian morality)it is in a word, collective violence. To be poor in the United States and the United Kingdom is to walk in a living death, for lack of income is only part of the collective pathology of poverty.
Poor persons are the target of bad treatment by
government institutions and corporate business, they receive 'goods' but these 'goods' are bad goods. They die from precipitate illnesses that are not adequately and promptly relieved, they are disproportionately incarcerated by a corrupt 'justice' system, and they are socially stigmatised and driven into
marginalised ghettos and run-down housing estates!
The wealthy and the precariously indebted middle-classes receive good goods and good treatment, in health, recreation, education, justice, and social well-being. This modern notion of charity, of delivering bad or second-hand treatment to the poor, is called ILTH, and is wholly distinct from the medieval
principle of charity or caritas, which entailed institutional and personal obligations to the poor. The poor were manifestations of the suffering Christ. With market fundamentalism and the attack on religion by
secular fundamentalism, by hapless liberal nihilists and narcissists, the Kingdom of God has been totally erased by the kingdom of the bourgeois anti-Christ. Nowhere is this more paradoxical than in the United States and the United Kingdom where there is a continuous moral rant by the private tyrannies of business and political parties. The MARKET is the sacrificial mechanism of a fanatical capitalism! Meanwhile the deep and daily afflictions of poor persons crucifies us all!

[adjustable]

Vanity is not a valid reason for cosmetic plastic surgery

[allnewaccs]

arranged marriages should be, should not be outlawed

[Christen]

Do not imagine that your experience is representative experience.

Do not imagine that everyone can live the way you lived in college, or the way you live now.

Do not imagine that your "matters of principle" are relevant to the grocery store employee who breaks his spine while biking to work -- do you expect him to choose between his life and "playing the consumerist, capitalist game" that is health care in the United States?

Do not imagine that he, or the 80% of persons declaring bankruptcy in this country who have done so because of medical bills, have no principles or do not know the difference between "need" and "want."

Do not imagine that poor people always have the option of moving somewhere things will be easier for them (for instance, to the proximity of a dental school providing pro bono care, or to a place where it is possible to live without a car).

Do not imagine that all health problems can be prevented by "eating healthfully."
Everybody dies of something, sometime -- and that, by the way, is not free either. Do not imagine that it is not possible to be permanently ruined by a single catastrophic event, medical or otherwise: even those with "common sense" find this to be the case all the time. I, for instance, lacked common sense enough to contract a life-threatening, if extremely common, internal infection when I was a college student with no health insurance. It still haunts my credit, which limits my employability, which limits my ability to do anything about the debt. Too bad I had the lack of common sense to get into that mess.

In short, n'chee, bully for you that your situation works -- but do not imagine your good fortune is universal.

[Jeniffer]

There are too many, not enough handicapped parking spaces in our city

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[Maine Treatment Centers]

Very interesting.

[Rita]

If any poor person has read through all these posts, I have an idea. No-one should have to pay the full price for their prescriptions. There's a discount card at www.rxdrugcard.com that saves you money at the drugstore and costs only $4.95 a month for the whole family.

[Chris S.]

That's all I'm saying. You stop playing the consumerist, capitalist game, things are way easier.

EXACTLY! I didn't learn this until recent years. Of course going broke helped bring the lesson home.