To me, one of the best example of the high cost of being poor is banking. Either they pay to get their paychecks cashed, or they have a checking account, where they are constantly being nickled and dimed to death with fees, minimum balance fees, overdrafts, atm etc.
Alstein
4100
Postal banking would help with this. I’d let the USPS handle their own checking service, and allow them to run broandband services that ISPs have to allow on their networks, the way earthlink used to.
Don’t you just need a savings account to cash checks at the given bank? You obviously need a checking account to write checks, but that’s less of a necessity.
Usurious loans are definitely a thing, but I think there’s a fair amount regulation to try and curb that. Again, that’s an income thing to me if someone literally needs pay advance loans and such, in terms of addressing the issue.
DoubleG
4102
You need an awareness of these hardships or you literally can’t address poverty or income inequality. How else would you know if your policies would even work? And what’s the point of getting more wealth to the poor if you’re ignoring the systems that are disproportionately taking their wealth away?
CraigM
4103
You obviously have no conception of how banking is inaccessible to many Americans, and the way the fee structures and minimum account balances can be onerous and limiting for them.
DoubleG
4104
You’ve never overdrafted. Spend a couple bucks more than you have in your account and your bank, instead of denying the charge, just adds a $35 dollar fee. You now owe the bank $40. A few years ago, they would sit on your payments and process them in such an order that you could overdraft multiple times, meaning that spending $10 more than you had could leave you $400 in the hole. Now you can’t cash your check without the bank taking all of it.
Why not go somewhere else? Because the banks use ChexSystems, nobody will give you a new account until you pay your original bank. Getting an immediate $400 interest payment on a $10 loan, without even asking for it, is a problem unique to the poor.
Up until recently, you were limited to 3 and then later 6 withdrawals from savings accounts per month., so I don’t think many poor people even think to open a saving account. Much less something like my Charles Schwab checking account, which has almost no fees, and even reimburses you from ATM fees . Lots of poor folks (14% of folks making under 40K) have no banking. So you have spend $20 to cash an $800 bi weekly check. Then you have spend $5 at most banks to get money order to pay your landlord.
Thank god for Walmart, who actually charges reasonable fees.
DoubleG
4106
Look at Dollar General’s stock price:
They’re considered a massive success story, and their business model is just to give the poorest Americans 50% of the product for 60% of the price. If you stick your head in the sand and ignore these vampires then income inequality policies are going to benefit them, too.
How do you overdraft a savings account?
On having a limited number of withdrawals from savings in a month, I’ve never run into this and I’ve had a savings account from when I started delivering newspapers 30+ years ago. Maybe this was the case outside of California?
On using this type of boot index to measure the effectiveness of policy, I have no idea how you do that.
Again, poverty sucks. I just don’t follow how pushing something like a boot index really addresses the causes of poverty, rather than just being an indicator of one of its symptoms.
What would not ignoring Dollar General look like? What laws or regulations are you advocating to address them?
Thrag
4109
Um, you are the person who began with “savings” account. Which kind of illustrates the “what does a banana cost” nature of the comment.
What do poor people need to cash paychecks and pay bills? A savings account is a luxury.
Huh? I used a savings account (without a checking account) in high school as a way to cash checks at the bank without paying fees. The savings account has no minimum balance requirements or risk of overdraft. Not sure what luxury you’re talking about.
Thrag
4112
What year was that?
How many bills were you paying out of it?
I mean, “in high school”.
How much did a banana cost then?
DoubleG
4113
A lot of people can’t simply go get a savings account because they’ve already been locked out of the banking system for overdrafting or writing a bad check. Also, how are these savings account only people paying their bills? If you want to go pay your utility with cash, there’s going to be a fee attached – another example that it’s expensive to be poor.
I’m saying that you can’t fix a problem while selectively ignoring the causes. This isn’t just about getting more money to a group, it’s also about stopping the money from flowing out.
I’ll bite: where can I go to get a savings account with no minimum balance / no tie to another count with minimum balance, no monthly fee and no transaction fee after an arbitrarily low number of ‘free’ monthly transactions?
CraigM
4115
Cool. That’s not true for most people at most banks. I know my first account had a minimum balance, it was definitely the norm.
Banks also have ways of hiding fees. Overdraft protection! So the check won’t clear, but the bank may charge you $20 for the privilege anyhow. Oops that puts you negative, now you get slapped with other fees.
Thrag
4116
That doesn’t also depend on having an associated account with a minimum balance.
Even back in the early 80s that savings account I had with the little blue passbook to store my bar mitzvah and stockboy money only existed because my parents had active checking accounts with the bank.
ShivaX
4118
I hate to link Louie CK for obvious reasons, but the joke is salient.
