This is one of those things most folks who've never had to experience economic hard times can never seem to understand. That's not to say everyone living a comfortable life should automatically be written off as callous and uncaring toward those less fortunate than themselves, because that simply isn't true. What I am saying is that even among some of the most compassionate well-to-do, it is still extremely difficult to fully appreciate and understand what it's like to live in complete desperation from day to day, yet still be required to pay proportionately and significantly more for basic services and necessities than wealthier Americans.
To say the least, this is backward. A recently released report from the Brookings Institution says essentially the same thing, but in much more detail and with a considerable amount of backup material. The basic premise of "From Poverty, Opportunity: Putting the Market to Work for Lower Income Families," which can be accessed online at the group's Web site (brook.edu), is that due to such things as credit problems and basic factors related to the areas in which lower-income people are forced to live, these Americans are often trapped in an existence that makes them pay extra for everything, from home mortgages and car insurance to furniture and groceries. Sure it's criminal, but hey, that's America. Them that's got shall have and them that's not shall lose.
To quote from the introduction to the report: "In general, lower-income families tend to pay more for the exact same consumer product than families with higher incomes. For instance, 4.2 million lower-income homeowners that earn less than $30,000 a year pay higher than average prices for their mortgages. About 4.5 million lower-income households pay higher than average prices for auto loans. At least 1.6 million lower-income adults pay excessive fees for furniture, appliances and electronics. And, countless more pay high prices for other necessities, such as basic financial services, groceries and insurance. Together, these extra costs add up to hundreds, sometimes thousands, of dollars unnecessarily spent by lower-income families every year."
According to the report, "more than 4.2 million lower-income homeowners nationwide pay a higher than average APR for their mortgage. In 2004, the average annualized rate of interest on a first mortgage for lower-income households was about 6.9 percent."
As for cars, "the middle 50 percent of lower-income households pay between 6.0 and 11.0 percent interest for their auto loans. That range systematically falls as household income increases."
"Reducing the costs of living for lower-income families by just one percent would add up to over $6.5 billion in new spending power for these families," according to the report. "This would enable lower and modest-income families to save for, and invest in, incoming-growing assets, like homes and retirement savings, or to pay for critical expenses for their children, like education and health care."
I'd be lying if I said I came up the hard way, because I definitely did not. However, that being said, I've definitely had more than a little bit of personal experience with being down on my luck or should I say "financially challenged"? Whatever you want to call it, I know quite a bit more than I want to about what can happen to your life once the money dries up. I'm not real crazy about the idea of recounting all the ups and downs in public for everyone to read and discuss just yet, but I will say that the terms "bankruptcy" and "credit shot to hell" are no longer terms I have to ask someone to clarify for me.
I know all about creditors calling the house all hours of the day and night harassing you and demanding payment no matter how much you try to explain that it's just not there. I even had a creditor once call a neighbor's apartment a neighbor I didn't even know to convince that neighbor to rush upstairs to my apartment, ring the doorbell, and say that someone at this 1-800 number told her to tell me that I needed to call them right away.
I've also had creditors get real ugly on the phone and start asking all sorts of personal questions implying that I was some sort of irresponsible fuck-up who didn't deserve to breathe the same air as good and upstanding folk who paid their bills on time. I remember thinking if that fool only knew what kind of acrobatics I was performing just to keep the lights on and the water running maybe he'd sing a different tune. I thought that for a while until I realized that he couldn't care less what I was going through. He didn't care because he wasn't paid to care. Caring was not his job.
I also have experienced being on unemployment while living in Chicago once upon a time and having to shop at neighborhood markets because they were the ones that accepted food stamps. These were also the markets where the so-called meat for sale looked like it had just been flown in from some Third World country and the bread and crackers were frequently stale.
And if you compared the price of that crap to what the "other half" paid at better stores for much better quality products, it was enough to, as Marvin Gaye once said, make you wanna holler.
I knew for a fact how much cheaper it was in more affluent areas because once I went to a store one that actually took food stamps in a better area to try and find some meat I could actually digest.
When I saw how much cheaper it was I couldn't believe it. I would have shopped there more often except I got tired of the looks (sometimes I think my shame made me imagine them), and the two-bus ride I had to take just to get there. I didn't have a car.
Another example of what less-than-fabulously wealthy folks sometimes have to endure are check-cashing stores. Sure, they can come in handy, especially when you don't have a bank account but need somewhere to cash your paycheck or your government check. The catch, though, as I also found out during my life and times in the Windy City, is that every check you cash is accompanied by a fee you wouldn't have to pay if you had a bank account. I can't remember exactly what the charge was, but it wasn't small. I do remember that. I also seem to remember that the fee went up proportionally on a scale with the size of the check you were cashing.
Today, like most Detroiters who own a home and a car, I don't even want to think about what I pay for car insurance and homeowner's insurance compared to what's being paid by someone in a similar-sized house who lives outside the city limits. My mother lives in a much better neighborhood than mine in Denver and her homeowner's insurance is less than half of what I pay. I think her car insurance is about one-third of mine. Neither of us has any points on our license.
It's easy to believe that folks who are behind on their bills, or who are going through foreclosure, etc., are somehow irresponsible ne'er-do-wells who need to get their acts together. Sometimes that's true. But sometimes life is just a bitch, and when your number gets called, believe me, you'll figure that out.Keith Owens is a Detroit writer, editor and musician. Send comments to firstname.lastname@example.org
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