4 Ways the Poor Get Screwed That Everyone Takes for Granted

[marmar]

AlterNet / By William Hogeland

4 Ways the Poor Get Screwed That Everyone Takes for Granted
Even if we're not in the 1%, lots of us still benefit every day from policies that burden the less financially fortunate.

November 11, 2011 |


I'm not in the 1%. At the lower end of what I think of as the upper middle class, I nevertheless take daily advantage of a raft of systems intended to ensure that people who have less money than I do pay more than I do. Since my economic advantages result from public policy, it's fair to call them taxes, levied on people least able to afford them and applied upward for the benefit of people like me. Since the glory days of feudalism are long over, and we don't like to revel in high position, matters are arranged to keep me and people like me from noticing the systemic nature of our economic advantage.

Here, therefore, are four quotidian things we deal with half-consciously every day that move money upward and keep it there:

1. ATMs. Some readers have reason to think the lowest amount that can be withdrawn from an ATM is a twenty-dollar bill. Others have reason to know that in less privileged parts of town, ATM companies set the machines to dispense ten-dollar bills, with ads calling attention to the fact. The reason is fairly obvious: many people's balances and obligations don't permit them to withdraw $20 at one time, and ATM companies and storeowners don't want to miss out on collecting fees in such a large -- and these days, and in those neighborhoods, such a growing -- population.

The up-front fee for withdrawing $10 is the same as the up-front fee for withdrawing other amounts. That gives me a distinct, recurring financial advantage over less well-off neighbors. This morning, for example, on my way to the subway, I withdrew $120 at a local ATM, paying $1.75 on the transaction -- around 1.5%, a reasonable fee for the convenience. I usually take out as much cash as I can when using an ATM not at my bank. It saves money. And if I keep a certain balance in my account, I pay no transaction fee to my own bank for using the ATM. ..............(more)

The complete piece is at: http://www.alternet.org/economy/153043/4_ways_the_poor_get_screwed_that_everyone_takes_for_granted/

[Laelth]

1. k&r for the truth. n/t

-Laelth

[Fumesucker]

2. +1

[reggie the dog]

3. i hate atm fees

they dont exist in france, i have never paid one here, i would go back to just taking out cash to avoid them

when i come to the states i try to bring my money in cash, take dollars directly from my bank here in france

fuck paying the atm that limits my withdrawl to 300 or 500 dollars when i want to take out 1000 or 2000 (money for all of vacation all at once)

[ParkieDem]

4. I don't.

There are several banks that don't charge them, including credit unions, and many will reimburse you for the fees other banks charge you for using their ATMs.

I don't mind the banks competing in this area.

[RebelOne]

6. Well, so far, Bank of America has not charged me any ATM fees. n/t

[sammytko]

7. uSAA bank is open to everyone not just military. They reimburse ATM fees.

[Mark Baker]

5. I didn't know you had to pay for ATMs in the US

We generally don't in the UK. Not that that makes a difference to the point here - indeed it's worse, as the poor are far more likely to have to use the small number of ATMs that do charge.

Generally over here ATMs run by banks are free, while many of those in convenience stores charge.
Round the corner from me - in a fairly affluent area - there are three convenience stores competing, and all of them have free ATMs. Poorer areas are more likely to have just the one shop within a reasonable walking distance, so if that shop has an ATM it will probably charge.

(Unless it's owned by the Co-op, as quite a few are. As the name suggests, the Co-op is a co-op, and therefore isn't out to rip off its customers).

[aikoaiko]

8. you don't have to. You do when you don't use one from your bank or a supermarket

I haven't used received an ATM charge in years because I get cash from my banks ATM or the supermarket where they don't charge a fee for "cash back".

[WildNovember]

13. A lot of poor people don't have a "bank". Because they're too transient,

because they don't have enough money, ID, permanent address to open an account or keep a minimum balance, because they don't have transportation to get to the bank, because they weren't enculturated into the use of a bank, etc.

And I don't really understand what you mean by supermarket. Do supermarkets case paychecks or state checks in your area? They sure don't in mine.

[aikoaiko]

19. What you say is true about the poor and banks, but the OP presumed enough $ for bank use by the poor

At my supermarkets, if you wish to get cash out of your bank account you can use your bank/debit card to pay for your groceries and additional cash back.

You can also cash checks, but not for free ($3 at Kroger for example).

[DaveJ]

9. I never understood the whole ATM fee problem

What lame-o banks charge for ATM withdrawals? I know BofA and Chase don't charge, and they are lame. Third party ATMs charge a fee, but I would never use one of those. Using some gas station ATM is really something someone "in a bind" or "less informed" would do, not a factor of economic privileged.

Same with monthly train tickets. I buy a monthly train ticket which is the cheapest, not because I'm rich, just because it is needed for my job. That is not a matter of economic privileged.

[Kat45]

31. Banks charge you an ATM fee if you're not a customer of said bank..

I always drive to my own bank's ATM so I won't get charged, even though there are other banks closer to my house.

[booley]

10. first one I am not so sure about

My area isnt' exactly high class and all the ATMs have a minimum of 20.

Most just go to walgreens or the grocery story where they dont' charge for debit.

Is this not the case outside Saint Louis?

[smokey nj]

16. Some ATMs in my area have a $10 minimum.

[Bluenorthwest]

18. The only ATMs w/ $10 bills I have seen are in NY and NJ

Never seen that elsewhere, would love it, don't have it.

[xxqqqzme]

22. At 1 of the 3 ATMs at my cedit union

you can get multiples of 5s. It is the only place I have ever seen ATM dispensing 5s. Every credit union branch has at least one ATM that does this.

[booley]

29. It doesn't seem like this is common

the only ATM that I have seen that gives less then 20 i sa southwest bank that gives 5s.

But that's for their customers so they aren't being charged.

[smokey nj]

30. The ATMs in my area that dispense $10 dollar bills dispense them to everybody.

[The Straight Story]

21. Around here it is hard to find some ATM's that are set up by specific banks

Most the close places are third party ones.

If you need to go 5-6 miles to use your bank atm and need to wait for 45 minutes to catch the bus just to withdraw money it is worth the $2.50 they charge.

And since some folks can't get bank accounts (based on credit rating - and yes some here DO check) they get things like NetSpend cards, and there are no ATM's for that bank so you are always using 3rd part.

--On UE? You might be getting a card from US bank. We do have US Bank but finding one is not all that easy (in my zip code there are only a handful, and out in the sticks you are lucky to find one).

[Manifestor_of_Light]

11. don't forget payday loan places.

And rent-to-own places.

I know a lady who is getting an Amana washer and dryer set for $1800 over two years.

And layaway fees.

[Ken Burch]

15. Ah yes, those "payday loan" places...

in 2004, I was in Astoria, Oregon, to get my lifeboatmen's ticket for my job on the ferry. On my way to the class one day, I saw a payday loan place...set up RIGHT NEXT DOOR to an center for people living on their own with mental and physical challenges...adults with Down's Syndrome, I'm guessing, and possibly also people with TBI. I felt myself shaking with rage at the thought of how badly that payday loan place must have ripped some of those people off.

[a2liberal]

12. Sorry, that article has way too many

incorrect things and logic fails for me to take it seriously. I don't deny that the poor do have some systematic disadvantages, but when I see myself shaking my head at every other sentence it's hard to take it seriously. Others have already explained some of the problems, so I won't get into it too much unless someone asks me to.

[jtuck004]

14. I'm asking. Go ahead. /nt

[redqueen]

17. I used to naively think

that middle class people would pick up on these things, and stop siding with the rich on matters of policy as a result.

[redqueen]

20. And there are many other ways in addition to these four.

:kick:

[Nye Bevan]

23. One he missed- mortgage interest is tax-deductible, but not rent.

Can't get much more regressive than that. But a lot of DUers benefit from the mortgage deduction, so you won't see many threads complaining about this injustice.

[Ilsa]

24. The standard deduction is sltill better than itemizing for most people.

We have paid on our home for 14 years, but for the last ten years, the standard deduction is better than itemizing. If the house was ak rent house, we could take more deductions on it, like homeowners interest, etc.

A person might need to have a lot of interest expense to meet the threshold for itemizing.

[Nye Bevan]

25. Right. So it tends to benefit the rich.

Buy a million dollar home, you get a tax break on the mortgage.

Rent a $600 per month apartment, you get nothing.

[dembotoz]

26. Classic book--The Poor pay more--read it maybe 30-35 years ago

true then and true now.

4 examples? truth is more like 4 million examples.

insurance, heath care, groceries, list goes on and on.

[ejpoeta]

27. exactly. groceries...... there's a big one.

If you look at the unit price you will see that most times if you buy the bigger amount of something, you will pay less overall even though you pay more up front. When I was poor (and I am not much better off now), I would have to buy the smaller amount. So I would pay more in the end because I couldn't afford to buy the larger amount.

Another thing is propane. We have propane, though we have only our stove now as propane and a backup furnace that is propane. We are cash only customers. This means we have to have the money up front. We also are charged more than someone who is not cash only. They come and top it off for them. Not us. We were paying a lot more than those other people. Still would be too if we had to fill it all the time.

Driving a car. When you are poor you are most likely not going to be able to get credit to get a new or decent used car. I am lucky that my husband can fix things and is a pretty good judge of a decent car. But older cars get worse gas mileage and tend to break down a lot. So he would have to go fix the car. He'd go to the junk yard and find parts. He missed a week of work once because he had to drive his own vehicle and it broke down. We were so broke back then.... On paper he made 40k, but in reality it had been more like 8k after all the gas he had to put in the car. We would overdraft every two weeks just to make sure he had gas in the car to work.

[demigoddess]

28. the ones that tick me off are the reverse mortgages and

the "let us buy your annuity and give you cash" ads on tv. A reverse mortgage is nothing more than a home equity loan, and I would bet they charge higher interest rates over the much longer period so they make tons of money off of it. Especially the ones that advertise reverse mortgages to pay off your present mortgage. And the ads that offer to buy your annuity or such is nothing more than some money you get by giving up a whole bunch of more money that you would have gotten. They make these things seem like a good deal but they really are just financial vampirism by the people with money bleeding people who don't have much money.