It is mostly the standard fare criticism of the wealth from the left – not suggesting it is justified or not, but standard nonetheless.
However, one brief chapter did stick with me, one entitled “Could You Afford to Be Poor?” [Page 41 in hardcover].
She referenced a 2006 study of the Brookings Institution, which cited the “ghetto tax,” a higher cost of living in low-income urban neighborhoods. Many of the individual examples we all know or could recognize but seeing them together collectively was daunting.
Here is her list
- 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 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 2 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 as wealthier drivers.
- Poorer people pay an average of 1 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 reporters, 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 convenience stores.”
Again, perhaps obvious, but the list as a whole is more troubling, at least for me. The first one and last two are displayed throughout North Philadelphia, in the collection of check-cashing stores, Rent-A-Centers, and corner bodegas, with an occasional Pathmark or Cousin’s.
She writes of the power micro-lending and what it could do for some. One of her suggestions that I must admit hadn’t occurred to me was a reference to her famous book Nickel and Dimed – which I never fully read. She wrote the following:
I chastised a coworker 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 $1,000 – condemned her to paying $40 a night at the Day’s Inn.
Others have referenced inherent health concerns. The initial capital costs of eating healthy – buying utensils, pots, pans and perhaps even materials to store leftovers, as Ehrenreich notes – are far beyond the means of some. It is easy to criticize a McDonald’s-based diet, but the $1 menu seems so much cheaper as a daily investment. These eating trends develop habits of buying from a corner store the greasy meal rather than the supplies to make something larger.
Some other examples she mention are a higher deposit on a phone if you have poorer credit – a likely circumstance and the least of one’s worries then – and much larger long-term health care costs if one is without health insurance – as he will avoid preventative care which, like an apartment down payment or pots and pans, seem to be prohibitive cost.
As she wrote:
What [many] don’t know is that it’s expensive to be poor. In fact, you, the reader of middling income, could probably not afford it.