Survival Guide for the Working Poor

The poorer you get, the more expensive life gets.

The idea of making a ‘comfortable living’ means so much to a poor person you don’t even know. To make enough income to be comfortable is all there is. It is all we dream about. Being poor is nothing but a constant stream of stresses. Choosing between buying presents for your child’s birthday or eating is but one more extreme example.

Granted, how to make that comfortable living is something of a mystery to most. Some people work themselves to death and never achieve it. Others take every short cut they can find and only dig themselves deeper into poverty. Others are born into situations where the odds of ‘getting out’ are so slim as to not be quantifiable so why even try?

The biggest, harshest reality is simply “it takes money to make money”. Making a comfortable living has been getting harder and harder since the Great Recession. And it doesn’t help there is a growing market in keeping the poor poor.

This article is not meant to be overly political or take on any specific issue. This article is meant to inform about the realities of what it is to be poor in America and how the system has evolved to not only take advantage, but make it more and more difficult to get out of poverty.

Note: This post is ongoing and will be continually updated as I do more research and people share their stories. [Uhg! Rising Taxes!]

Exploitation of the Poor in Education.

Even though taxes for schools all go to a single school district, that, in larger towns and cities, often encompass both affluent, poor and in between neighborhoods, the money is still parceled out depending on each neighborhood school’s tax base. Smaller tax base, less money for the neighborhood school. Public schools in poor neighborhoods are older, in bad repair, and often cannot afford books, computers, or basic school supplies (schools supplies they depend on the poor families in the neighborhood to provide). These schools have a harder time holding on to teachers, especially specialized positions such as TAG, Special Education, Computer Lab, band, and such, which raises the ratio of students per teacher and forces more kids with special needs into classes that can’t support them.

http://slideplayer.com/slide/5765974/

The option to send children out to better schools exists, but the time, logistics, and cost of transporting them can be daunting for poor families. Families with children of different ages who go to different schools puts even more stress, time and expense onto already struggling families. In addition to students not having the same leg up educationally as schools in more affluent neighborhoods, district, state, and federal funding can be reduced or revoked entirely if the neighborhood school fails to produce enough students who can pass standardized tests, putting students even further behind.

Getting a college education used to nearly be a guarantee of getting out of poverty. An education was meant to get you further than your parents. It used to mean a career rather than just a job. A career with upward mobility, benefits, retirement. Enough to support a family, buy a house, and send your own kids to college when they come of age.

The skyrocketing cost of higher education, along with the prevalence of predatory universities, has turned this once sound investment into one’s future into a nightmare of towering debt with no guarantees resulting degrees will increase income or even get graduates jobs that pay living wages. As a matter of fact, more an more people ‘in the know’ are recommending adults do NOT to go back to school (to finish or get a higher degree) because the crushing debt is not worth the meager rise in possible pay.

Used to be you bought a book, used or new, and had the option to sell it back. Or you could check it out of the library in order to make copies (nothing is completely free). Today, however, an increasing number of books can only be had online (think kindle style), they still cost you to buy/read, but with no sell back option. And we are all aware of the grossly inflated cost of college books as it is.

Educational institutes are also preying on the poor in hiring as well as tuition. Adjunct and other lower position professors are often only hired part time or in temporary positions so as not to be eligible for insurance and other benefits. And to keep them from accruing time towards tenure at any given school.

Exploitation of the Poor as its own industry.

The growing number of pawn shops, dollar stores, convenience stores, check cashing stores, small cash loan businesses, and even fast food restaurants are in the business to take advantage of the poor and working poor. In poor neighborhoods these are the only types of businesses that can be found. And not only do they offer low quality goods at higher prices, they also pay low wages to their employees.

Then there is the other side of exploitation of the poor. The promise of escape and the threat of addiction. Living in a poor neighborhood means finding yourself surrounded by liquor stores, discount cigarette stores, and “convenience” stores that sell fried foods and processed carbs.

The lottery.

Exploitation of Poor Workers.

Menial jobs that pay ‘under the table’ have always been an issue. These types of jobs traditionally take advantage of teenagers,[undocumented] immigrants, and those working more than one job. Such practices have expanded, however, in more creative ways into other industries due to modern technology. Crowd sourcing for example. This seems like it would be a boon to both consumers and service providers, but in reality it creates a competition to the bottom in what were otherwise highly skilled, and usually decently paid (and almost all creative) professions. Consider this ‘Medium’ as an example... used to be writers would get paid… Crowd sourcing causes professionals to work a lot harder for a lot less or even nothing at all.

Hiring practices in general are more and more blatant about getting more labor for less pay. For example right after the Great Recession hit, there was suddenly a boom in hiring women. That wasn’t a progressive move to create more equality in the workplace, it was because employers knew they could get away with paying women less. For a good year and a half, it became a cost cutting measure to fire men in established positions and replace them with women who not only got paid less because they were new to the job, but also paid a lower starting wage because they were women. Additionally, the federal government offers tax credits to employers who hire minorities including women, giving employers a double incentive to exploit the worker. And because of this “competition” for jobs, workers are willing to take less money then they are worth and work more hours, just to be able to take and keep a job.

Companies still exploit young professionals in unpaid internships even though such a practice is considered illegal.

As more and more states become ‘right to work’, the practice of discontinuing employment for women who become pregnant (or might get pregnant) has increased, as well as for disabled, those with above average medical needs, and employees 5 to15 years short of retirement. Falling far short of other first world countries, the USA grudgingly gives family leave, but only unpaid (employees are still expected to pay for health insurance premiums, deductibles and co-pays even though they have no income coming in).

It is also harder for the poor to get and hold a decent job due to transportation requirements. Very rarely are there any good jobs in the same area as affordable housing, meaning the poor rely heavily on public transportation, which is an added expense, and added time in the course of the day. This also means working parents have to spend more money on day care or after school programs. Staying ‘professional’ in dress is also much more expensive for the working poor. Stores that sell professional attire are far away from poorer neighborhoods (like fresh food) increasing expenses for transportation. The expense to buy such clothes is often beyond their basic income, especially if new at a job. And paying for dry cleaning or laundry services (in cases where they do not own their own washer and dryer) can be intimidatingly expensive as well.

There is also the practice of hiring part timers in order to not have to pay overtime or offer benefits. More job positions than ever pay minimum wage to start and offer raises so small a person could work a lifetime in an industry and never make a living wage. Raises and job growth have stagnated. Before the Great Recession, job growth was around 4%. It is now half that (although it took a jump very recently; not raises, however). Getting ‘salary’ doesn’t mean the same as it once did. ‘Salaries’ in general are lower and there is no more quid pro quo for working extra hours or over time.

Some companies do provide child care and paid family leave, but those benefits exist almost exclusively for higher paid positions only. The lower your wage, the less time and tolerance for being out sick for yourself or for a child. Such intolerance for time off for a sick child effects men and women differently. Women are less likely to be hired if it is found they have children at home (the younger the children, the higher the risk of not being hired), and men are expected to not take time off at all as it is assumed to be their children’s mother’s duty to take time off (if they aren’t already a stay-at-home mom). Because of this prejudice, single parents are effected the most adversely.

Exploitation of the Poor in Banking.

The fees! Fees that largely only impact the poor. Used to be you could get a savings account and put as much or as little as you wanted into it, then sit back and watch it grow. Interest rates for savings accounts have dropped to nearly nothing. And many banks require a minimum amount be in the savings account or they slowly take it all away from you through fees. Say you have the minimum amount in there when you opened the savings account, but, without your being aware (because it was in the fine print or just because), they increase the minimum requirement to over what you have in the account. By the time you realize there is a problem, it could take a lot of money to get the Savings account back up to where it is not hemorrhaging your money. There are also ‘lack of activity’ fees. A relative had put $1,500.00 in a savings account and let it sit. Before he knew it he owed the bank $200.00 and all the money he had in it was gone. All due to ‘lack of activity’ fees. Even the not so poor can easily be ripped off by predatory banking policies.

Checking accounts are worse. Some banks practice a, uh, creative way of putting payments and deposits through. At the end of the day they put all payments through from largest to smallest. Doesn’t matter when the payments were made throughout the day. This way they get the maximum amount of fees they can get. Say you end up overdrawing by $10 at the end of the day. You know you did. It was an emergency and you figure you can handle one overdraft fee. Except you don’t get one overdraft fee, you get three or more. Because of the way they juggled your payments, instead of getting one fee for that one $40 over payment you knew you made, they move earlier payments for $5 and $.99 to after your over payment so as to get another two $30+ fees against you. A then $16 overdraft can cost you almost $100 in fees. Oh, and if you put a deposit in before you made that over payment to cover it, well that didn’t help because they put all deposits through AFTER all the payments and then from smallest to largest. Again, to maximize fees. These kinds of bank shenanigans (predatory bank operations) aren’t totally legal, so if you suspect your bank is doing that to you, REPORT THEM (and find a reputable credit union).

Automatic payments and deposits are becoming more of a demand and less of an option. They’ve even tied interest rates to them. And then banks can ‘approve’ an automatic deposit whenever they want. Your company may put direct deposits through on Thursday, but you may not see your money until Monday, even when it is promised to be in your account Friday morning.

Additionally there is a huge disparity between payments vs refunds. Say you use your debit/credit card to pay for something you think is $69.00, but when you see the slip to sign, it’s $669.00. You know you only have $200.00 in your account, but because you have a decent relationship with your bank, they approved it anyway, overdrawing you by almost $500.00. You immediately have the service provider cancel the transaction, but it is already too late. Even if that $669.00 is on hold, it will still incur a fee. And even though you had the person you were paying cancel the transaction, that can take up to three days. If this happens later in the week, your account will remain overdrawn until the following Monday at the earliest. Depending on your bank, they can charge you a fee for every day it is overdrawn. And, of course, you can’t use your account until the cancellation has gone through. If you don’t have savings to cover the overdraw, and/or you have other payments and needs that need to be addressed in that time, this kind of ‘error’ can be an extreme hardship. Possibly an error that could take months, if ever, to bounce back from. Now most banks will work with you concerning such errors from trying to push the cancellation through within a day (with the appropriate paperwork) to forgiving fees during the time it takes for the cancellation to clear and your account is in the black again.

Ever seen that ‘change jar’ option thru your bank? Where they round up to the nearest dollar and deposit that into your savings account? Yeah, don’t do that if you live check to check, if you overdraw, they automatically withdraw whatever change you may have accumulated and then charge you a fee for doing so. If you overdraw by $5, they’ll transfer the $2 you’ve earned through change jar, then charge you a $10 transfer fee. Now you are overdrawn $13 instead of $5 and you still get charged the $30+ fee so you are now down almost $55.

Banks and Credit Unions institute all sorts of weird fees and penalties to punish you for overdrawing. For example ‘mobile banking’. An awesome innovation, but with caveats. First off doing a mobile deposit will result in a hold on the deposit no matter what (when depositing in person, holds can be negotiated depending on time at the bank, issuer of the check, and so on). Average of five business days usually. If, however, you have overdrawn recently, they will penalize you by revoking your ability to deposit a check via your mobile phone for sometimes up to six months. Six months without an overdraft, that is. For people who work for themselves, this is especially problematic. And the whole reason to do a mobile deposit in the first place is to help mitigate overdrafts. If you’ve moved, or your branch has closed and you don’t have time to drive to another, mobile banking seems like a life saver… except, as with most bank ‘perks’, it comes with its own set of drawbacks.

Interest rates altogether are a catch 22. When borrowing to buy something, like a car or home, interest goes up the poorer, riskier you are. Whereas interest rates for savings accounts, retirement and such go down the less you are worth or make. The lower on the economic scale you are, the more collateral you have to have to get a loan.

If you do choose to forego a bank to deposit your check into, then you have to pay a fee to have your checks cashed. And not having a solid banking history adversely effects your credit rating.

Working for a bank also has its risks. Recently it has been found out that banks have taken life insurance policies out on their employees, and issued fake loans in their employee’s names. Regulations against such practices have been slow to be passed.

Exploitation through Credit

The whole idea of credit thru credit cards was invented to bilk the poor. As inflation and the cost of living started to outpace wages, credit cards were designed to bridge the gap. You can’t walk across the campus of a continuing education establishment without someone shoving a credit card application into your hand. The point being to get you reliant upon credit early. Today Credit cards are used in lieu of standard small loans. They are now a legal form of secondary identification. You also can’t stay in most Hotels/Motels without a credit card because they require a credit card for possible damages. Debit cards are also credit cards.

If you lose your job or end up with a costly emergency of some sort, before long you find yourself paying rent with credit. It’s all downhill from there.

http://hill-kleerup.org/blog/2015/09/08/the-high-cost-of-being-poor-in-the-united-states.html

Forgotten by Government Leaders

Flint, Michigan, is the poster child here. Where citizens are forced to pay for public services they can’t even use. Especially if they have children because there are laws in place that require you to have basic utility services, including water, or risk your children being removed and put in foster care. They can’t sell their homes because there are regulations in place that make it illegal to sell a home with known water issues… even when the fault lies with the city and not the home owner. The poor are often caught in such ‘catch 22s’.

The housing crash is another example where poorer people were targeted for high risk loans before the crash, and then lost their homes to predatory lenders afterwards. Even though it has been proven in courts of law that banks did indeed prey on at-risk, poorer home buyers, it was not the banks who lost their homes and their good credit ratings.

Poor neighborhoods have less industry, fewer conveniences like grocery and department stores, restaurants, and other types of businesses. This means people have to travel out, often far out, of their neighborhoods in order to work or shop. The cost to do so is often overwhelming. Public transportation can take hours which makes it harder to hold down two or more jobs. And transporting groceries for a large family via bus is pretty much impossible.

If you are lucky enough to own a car, that helps, but there are factors that make that a larger financial hardship than if you lived in a more affluent neighborhood. The cost of gas becomes a problem because services and jobs are so far out. Poor neighborhoods get less money for road repairs, creating shabbier driving conditions which result in greater wear and tear on vehicles. Repair shops (reliable ones) of any kind are often far away resulting in less chance there is courtesy pick up or drop off, or even the use of a loaner vehicle. And such shops with flexible, evening or weekend hours to accommodate people who can’t take time off, are non-existent. Signs are either so old they’ve faded to the point they can no longer be made out, or they’ve been downed and not replaced. Regardless, people are still expected to follow them, readable or existing or not.

Because grocery stores with fresh foods are farther away, and healthier food is often way more expensive, studies show that overweight poor people are almost always malnourished. That poor diet leads to more health issues which they also cannot address because of lack of health insurance or poor standards of healthcare near their neighborhoods. The average life span of someone who is poor is drastically less than the average. The poorer you are, the lower that life expectancy gets. Along with bad nutrition, poor healthcare (and dental care), is also a fact that poor workers are stuck working jobs that are harder on the body, have less or no insurance, and have high accident rates or death on the job.

This means that the average poor worker and their family seldom get to take advantage of social security paid in during their lifetime.

https://opinionator.blogs.nytimes.com/2013/03/09/in-the-south-and-west-a-tax-on-being-poor/?_r=0

The biggest problem for the poor is that only those with money can afford to put it and time into politics to sway government leaders and elected officials into not passing regulations and laws that would help make the lives of the poor less expensive. Or at least stop the legal exploitation of the poor through the various ways I’ve gone into great detail about above so far.

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